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johnsons inc is looking at a new cake system with an installed cost of $800,000. This cost will be depreciated straight-line to $20,000 over the
johnsons inc is looking at a new cake system with an installed cost of $800,000. This cost will be depreciated straight-line to $20,000 over the projects four-year life, at the end of which the cake system will can be scrapped for $45,000. The cake system will save the firm $250,000 per year in pretax operating costs. The system needs an initial investment in NWC of $30,000, which will be returned in full at the end of the project. If the tax rate is 30 percent and the discount rate is 15 percent, what is the bet present value of the project?
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