Question
The Sausage Hut is looking at a new sausage system with an installed cost of $330,000. This cost will be depreciated straight-line to zero over
The Sausage Hut is looking at a new sausage system with an installed cost of $330,000. This cost will be depreciated straight-line to zero over the project's three-year life, at the end of which the sausage system is estimated to have zero value. The project has no impact on net working capital. Each year during its three year life, the new system will increase the firms Sales by $455,000 and its Operating Cash Flow by $123,300. If the tax rate is 30 percent and the discount rate is 9 percent, what is the NPV of this project?
Group of answer choices
-111,524
- $17,891
$19,405
$35,389
$1,136,217
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started