Question
Kolbys Korndogs is looking at a new sausage system with an installed cost of $745,000. The asset qualifies for 100 percent bonus depreciation and can
Kolbys Korndogs is looking at a new sausage system with an installed cost of $745,000. The asset qualifies for 100 percent bonus depreciation and can be scrapped for $103,000 at the end of the projects 5-year life. The sausage system will save the firm $219,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $71,000. If the tax rate is 23 percent and the discount rate is 10 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.)
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