Looking at new sausage system with an installed cost

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Kolby's Korndogs is looking at a new sausage system with an installed cost of $665,000. 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 $111,000. The sausage system will save the firm $199,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $57,000.

If the tax rate is 34 percent and the discount rate is 8 percent, what is the NPV of this project? Do not round intermediate calculations a round your answer to 2 decimal places e.g., 32.16) NPV $

Reference no: EM131464192

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