If the tax rate is 40 percent and the discount rate is 9

Assignment Help Operation Management

Reference no: EM13391557

Kolby's Korndogs is looking at a new sausage system with an installed cost of $530,000. This cost will be depreciated straight-line to zero over the project's four-year life, at the end of which the sausage system can be scrapped for $110,000. The sausage system will save the firm $198,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $56,000.

Required:

If the tax rate is 40 percent and the discount rate is 9 percent, what is the NPV of this project? (Do not round intermediate calculations.

Reference no: EM13391557

Questions Cloud

Distinguish between positive and negative feedback loops : differentiate between positive and negative feedback loops. give examples of each with regard to natural resource

Compute pension expense for van persie corp for the year : van persie corp. sponsors a defined-benefit pension plan for its employees. the following balances related to the plan

The tax rate is 35 percent and the cost of capital is 15 : mcgilla golf has decided to sell a new line of golf clubs. the clubs will sell for 731 per set and have a variable cost

What have we learned about sustainable use of resources and : what have we learned about the sustainable use of resources and the ability to maintain the ability to produce into the

If the tax rate is 40 percent and the discount rate is 9 : kolbys korndogs is looking at a new sausage system with an installed cost of 530000. this cost will be depreciated

Your understanding of the merits and demerits of mrpii : the materials manager is very familiar with older material requirements planning mrp systems as well as more integrated

The news has been full of stories lately about the stock : the news has been full of stories lately about the stock market problems sub-prime mortgages and ponzi schemes. all of

There are many different kinds of teams found in the : there are many different types of teams found in the workplace. however no matter what label is assigned to the team

Assume there is no need for additional investment in : a manufacturing company is thinking of launching a new product. the company expects to sell 950000 of the new product

User Account

All Pages