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Satriales Pork Store is looking at a new spicy pepperoni system with an installed cost of $385,000. This cost will be depreciated straight-line to zero
Satriales Pork Store is looking at a new spicy pepperoni system with an installed cost of $385,000. This cost will be depreciated straight-line to zero over the projects five-year life, at the end of which the pepperoni system can be scrapped for $60,000. The pepperoni system will save the firm $135,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $35,000. If the tax rate is 21 percent and the discount rate is 10 percent, what is the NPV of this project?
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