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Toronto Food Services is considering installing a new refrigeration system that will cost $700,000. The system will be depreciated at a rate of 20% (Class
Toronto Food Services is considering installing a new refrigeration system that will cost $700,000. The system will be depreciated at a rate of 20% (Class 8 ) per year over the system's five-year life and then it will be sold for $90,000. The new system will save $250,000 per year in pre-tax operating costs. An initial investment of $70,000 will have to be made in working capital. The tax rate is 35% and the discount rate is 10%. Calculate the NPV of the new refrigeration system. You must show all of your calculations for full marks. You can either enter them in the space provided below or you can upload them to the drop box
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