I ONLY NEED THE ANSWER FOR THE SECOND QUESTION. QUESTION 1 AND IT'S ANSWER ARE POSTED AS SUPPORTING INFORMATION!!!

1

Kolbys Korndogs is looking at a new sausage system with an installed cost of $655,000. 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 $85,000. The sausage system will save the firm $183,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $35,000. If the tax rate is 22 percent and the discount rate is 8 percent, what is the NPV of this project?

1 ANSWER

2)

In the previous problem, suppose the fixed asset actually qualifies for 100 percent bonus depreciation. All the other facts are the same. What is the new NPV?