Dog Up! Franks is looking at a new sausage system with an installed cost of $715,000. The asset qualifies for 100 percent bonus depreciation and can be scrapped for $97,000 at the end of the project's 5-year life. The sausage system will save the firm $207,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $59,000. If the tax rate is 22 percent and the discount rate is 8 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 $715,000. The asset qualifies for 100 percent bonus depreciation and can be scrapped for $97,000 at the end of the project's 5-year life. The sausage system will save the firm $207,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $59,000. If the tax rate is 22 percent and the discount rate is 8 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
Section: Chapter Questions
Problem 10P
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