Question
Dog Up! Franks is looking at a new sausage system with an installed cost of $510,000. 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 $510,000. This cost will be depreciated straight-line to zero over the projects five-year life, at the end of which the sausage system can be scrapped for $79,000. The sausage system will save the firm $152,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $31,500. If the tax rate is 21 percent and the discount rate is 9 percent, what is the NPV of this project?
Please help out, do not have a graphing calculator, thanks in advance!
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