Tippit-the-Strong Company is looking at a new sausage system with an installed cost of $300,000. This asset will be depreciated according to MACRS 5 years over the projects three-year life, at the end of which the sausage system can be sold for $90,000. The sausage system will create annual savings of $200,000 (before taxes and depreciation), and the system requires an initial investment in net working capital of $40,000. The tax rate is 30 percent.

What is the NPV with the 14 percent discount rate?

		$121,659.46
		$53,282,86
		$165,324.55
		$98,438.64
		-$120,342.56