Question
Kolby's Korndogs is looking at a new sausage system with an installed cost of $735,000. The cost will be depreciated straight-line to zero over the
Kolby's Korndogs is looking at a new sausage system with an installed cost of $735,000. The cost will be depreciated straight-line to zero over the project's 7-year life, at the end of which the sausage system can be scrapped for $101,000. The sausage system will save the firm $215,000 per year in pretax operating costs, and the system requires an intial investment in net working capital of $67,000. If the tax rate is 21 percent and the discount rate is 8 percent, what is the NPV of this project? (Do not round intermiediate calculations and round your awnser to 2 decimal places.)
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