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Kolby's corndogs is looking at a new system with an installed cost of $882,000. This cost will be depreciated straight-line to zero over the project's
Kolby's corndogs is looking at a new system with an installed cost of $882,000. This cost will be depreciated straight-line to zero over the project's seven-year life, at the end of which the system can be discarded for $97,000. The system will save the firm $185,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $43,000. If the tax rate is 30 percent and the discount rate is 6 percent, what is the NPV of this project?
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