Question
Bob's Burger is looking at a new patty system with an installed cost of $510,000. This cost will be depreciated straight-line to zero over the
Bob's Burger is looking at a new patty system with an installed cost of $510,000. This cost will be depreciated straight-line to zero over the projects five-year life, at the end of which the patty system can be scrapped for $79,000. The patty system will save the firm $152,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $31,500. If the tax rate is 21 percent and the discount rate is 9 percent, what is the NPV of this project? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Please show all of your work so that I can learn how to find each value.
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