Dog Up! Franks is looking at a new sausage system with an installed cost of $705,000. This cost will be depreciated straight-line to zero over the project's 6-year life, at the end of which the sausage system can be scrapped for $95,000. The sausage system will save the firm $203,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $55,000. If the tax rate is 25 percent and the discount rate is 10 percent, what is the NPV of this project? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. NPV
Dog Up! Franks is looking at a new sausage system with an installed cost of $705,000. This cost will be depreciated straight-line to zero over the project's 6-year life, at the end of which the sausage system can be scrapped for $95,000. The sausage system will save the firm $203,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $55,000. If the tax rate is 25 percent and the discount rate is 10 percent, what is the NPV of this project? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. NPV
Chapter9: Capital Budgeting And Cash Flow Analysis
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