Question
Dog Up! Franks is looking at a new sausage system with an installed cost of $460,200. This cost will be depreciated straight-line to zero over
Dog Up! Franks is looking at a new sausage system with an installed cost of $460,200. 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 $70,800. The sausage system will save the firm $141,600 per year in pretax operating costs, and the system requires an initial investment in net working capital of $33,040. Required: If the tax rate is 30 percent and the discount rate is 13 percent, what is the NPV of this project?
$98,268.89 $116,911.37 $77,657.21 $101,114.68 $96,299.69
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