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 $ 6 6 5 , 0 0 0 .

Dog Up! Franks is looking at a new sausage system with an installed cost of $665,000. This cost will be depreciated straight-line to zero over the projects 5-year life, at the end of which the sausage system can be scrapped for $87,000. The sausage system will save the firm $187,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $39,000.
What is the aftertax salvage value of the equipment?
Note: Do not round intermediate calculations and round your answer to the nearest whole number, e.g.,32.
What is the annual operating cash flow?
Note: Do not round intermediate calculations and round your answer to the nearest whole number, e.g.,32.
If the tax rate is 22 percent and the discount rate is 10 percent, what is the NPV of this project?

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

Step: 3

blur-text-image

Ace Your Homework with AI

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

Get Started

Recommended Textbook for

Advanced Finance

Authors: Michael Fardon

1st Edition

1872962319, 1872962173, 978-1872962313, 978-1872962177

More Books

Students also viewed these Finance questions

Question

Learn about the labor context in Canada and Quebec.

Answered: 1 week ago