Dog Up! Franks is looking at a new sausage system with an installed cost of $520,000 This cost will be depreciated straight-line to zero over the project's five-year life, at the end of which the sausage system can be scrapped for $83,000. The sausage system wil save the firm $154,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $32,500. If the tax rate is 23 percent and the discount rate is 11 percent, what is the NPV of this project? (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 $520,000 This cost will be depreciated straight-line to zero over the project's five-year life, at the end of which the sausage system can be scrapped for $83,000. The sausage system wil save the firm $154,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $32,500. If the tax rate is 23 percent and the discount rate is 11 percent, what is the NPV of this project? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) NPV
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter17: Long-term Investment Analysis
Section: Chapter Questions
Problem 2E
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![Dog Up! Franks is looking at a new sausage system with an installed cost of $520,000.
This cost will be depreciated straight-line to zero over the project's five-year life, at the
end of which the sausage system can be scrapped for $83,000. The sausage system will
save the firm $154,000 per year in pretax operating costs, and the system requires an
initial investment in net working capital of $32,500. If the tax rate is 23 percent and the
discount rate is 11 percent, what is the NPV of this project? (Do not round intermediate
calculations and round your answer to 2 decimal places, e.g., 32.16.)
NPV](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3aff2365-9f44-4770-b8e3-e2ed0988bbf7%2F92cd49a2-f1bb-40e2-ac97-7dab0403a8cc%2Fqi08wx_processed.png&w=3840&q=75)
Transcribed Image Text:Dog Up! Franks is looking at a new sausage system with an installed cost of $520,000.
This cost will be depreciated straight-line to zero over the project's five-year life, at the
end of which the sausage system can be scrapped for $83,000. The sausage system will
save the firm $154,000 per year in pretax operating costs, and the system requires an
initial investment in net working capital of $32,500. If the tax rate is 23 percent and the
discount rate is 11 percent, what is the NPV of this project? (Do not round intermediate
calculations and round your answer to 2 decimal places, e.g., 32.16.)
NPV
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