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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 withan installed cost of $385,000. This cost will be depreciated straight-line to zero overthe 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 operatingcosts, 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 ofthis project? calculate Aftertax salvage value
Sell equipment
Taxes
Aftertax cash flow
Costs
Depreciation
EBT
Taxes
Net income
OCF
Capital spending
Net working capital
Total cash flow
NPV

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