Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Dog Up ! Franks is looking at a new sausage system with an installed cost of $ 3 8 5 , 0 0 0 .

Dog Up! Franks is looking at a new sausage system with an installed cost of $385,000. 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 $60,000. The sausage system will save the firm $135,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $35,000. If the tax rate is 21 percent and the discount rate is 10 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.)Dog Up! Franks is looking at a new sausage system with an installed cost of $385,000.
This cost will be depreciated straight-line to zero over the project's five-year life, at the
end of which the sausage system can be scrapped for $60,000. The sausage system will
save the firm $135,000 per year in pretax operating costs, and the system requires an
initial investment in net working capital of $35,000. If the tax rate is 21 percent and the
discount rate is 10 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.)
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Finance questions

Question

Everyone upstairs (receive, receives) mail before we do.

Answered: 1 week ago

Question

LO23.2 Discuss the extent and sources of income inequality.

Answered: 1 week ago