Dog Up! Franks is looking at a new sausage system with an installed cost of $187,200. This cost will be depreciated straight-line to zero over the project's 7-year life, at the end of which the sausage system can be scrapped for $28,800. The sausage system will save the firm $57,600 per year in pretax operating costs, and the system requires an initial investment in net working capital of $13,440.

Required:

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

Multiple choice answers:

$13,492.67

$13,550.25

$5,423.79

$20,973.88

$12,905.00