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Symon Meats is looking at a new sausage system with an installed cost of $515,000. This cost will be depreciated straight-line to zero over the
Symon Meats is looking at a new sausage system with an installed cost of $515,000. This cost will be depreciated straight-line to zero over the projects five-year life, at the end of which the sausage system can be scrapped for $77,000. The sausage system will save the firm $195,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $36,000. If the tax rate is 35 percent and the discount rate is 9 percent, what is the NPV of this project?
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