Question
Cori's Meats is looking at a new sausage system with an installed cost of $475,000. This cost will be depreciated straight-line to zero over the
Cori's Meats is looking at a new sausage system with an installed cost of $475,000. This cost will be depreciated straight-line to zero over the projects five-year life, at the end of which the sausage system can be scrapped for $69,000. The sausage system will save the firm $215,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $28,000. If the tax rate is 21 percent and the discount rate is 8 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.)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started