Question
Dog Up! Franks is looking at a new sausage system with an installed cost of $561,600. 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 $561,600. This cost will be depreciated straight-line to zero over the project's 3-year life, at the end of which the sausage system can be scrapped for $86,400. the sausage system will save the firm $172,800 per year in pretax operating costs, and the system requires an initial investment in net working capital of $40,320.
If the tax rate is 24 percent and the discount rate is 8 percent, what is the NPV of this project?
(This is a homework problem and I need to know the processes of a tutor to compare to my own answers)
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