Question
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
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 6-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. If the tax rate is 23 percent and the discount rate is 10 percent, what is the NPV of this project?
Multiple Choice $161,277.45 $135,912.41 $199,663.90 $190,156.10 $215,521.14
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