Dog Up! Franks is looking at a new sausage system with an installed cost of $257,400. 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 $39,600. The sausage system will save the firm $79,200 per year in pretax operating costs, and the system requires an initial investment in net working capital of $18,480.

Required:

If the tax rate is 35 percent and the discount rate is 14 percent, what is the NPV of this project?

rev: 09_18_2012

$33,648.12

$42,671.51

$32,203.33

$30,669.84

$21,646.45