Kolbys 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 projects 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

a.What is the aftertax salvage value of the equipment?

b.What is the annual operating cash flow?

c.If the tax rate is 23 percent and the discount rate is 9 percent, what is the NPV of this project?