Dog Up! Franks is looking at a new sausage system with an installed cost of $811,200. This cost will be depreciated straight-line to zero over the project's 8-year life, at the end of which the sausage system can be scrapped for $124,800. The sausage system will save the firm $249,600 per year in pretax operating costs, and the system requires an initial investment in net working capital of $58,240.

Required:

If the tax rate is 35 percent and the discount rate is 16 percent, what is the NPV of this project?

rev: 09_18_2012

$47,658.23

$7,182.91

$33,522.90

$72,401.89

$31,926.58