Question
Cori's Dog House is considering the installation of a new computerized pressure cooker for hot dogs. The cooker will increase sales by $9,900 per year
Cori's Dog House is considering the installation of a new computerized pressure cooker for hot dogs. The cooker will increase sales by $9,900 per year and will cut annual operating costs by $13,500. The new system will also prompt a $3,400 increase in net working capital. The system will cost $47,400 to purchase and install. This system is expected to have a 4-year life and will be depreciated to zero using straight-line depreciation and have no salvage value. The tax rate is 21 percent and the required return is 11 percent. What is the NPV of purchasing the pressure cooker?
NPV =
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