Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Kolby's Korndogs is looking at a new sausage system with an installed cost of $720,000. This cost will be depreciated straight-line to zero over the

image text in transcribed
Kolby's Korndogs is looking at a new sausage system with an installed cost of $720,000. This cost will be depreciated straight-line to zero over the project's 6-year life, at the end of which the sausage system can be scrapped for $98,000. The sausage system will save the firm $209,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $61,000. What is the aftertax salvage value of the equipment? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) Aftertax salvage value $ 98,000 What is the annual operating cash flow? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) OCF $ 209,000 If the tax rate is 23 percent and the discount rate is 9 percent, what is the NPV of this project? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) NDV 116 NOR AZ

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Handbook Of Sentiment Analysis In Finance

Authors: Gautam Mitra, Xiang Yu

1st Edition

1910571571, 978-1910571576

More Books

Students also viewed these Finance questions