Looking at new sausage system with installed cost

Assignment Help Financial Management

Reference no: EM131880425

Kolby’s Korndogs is looking at a new sausage system with an installed cost of $896,000. This cost will be depreciated straight-line to zero over the project’s seven-year life, at the end of which the sausage system can be scrapped for $101,000. The sausage system will save the firm $189,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $47,000.

If the tax rate is 30 percent and the discount rate is 6 percent, what is the NPV of this project?

Reference no: EM131880425

Questions Cloud

What is the best support for the given family : A young professional couple, both age 30, has been married for 8 years. What is the best support for this family? How can you aid in their grieving process?

How does goodyear use website to communicate : In addition to providing information about the company's products, Goodyear's website helps consumers find the exact products they want and will even direct.

Choosing a career path can help you set professional goals : Choosing a career path can help you set professional goals and achieve desired results. In the area of Supply Chain, various career path are available.

Significant cost of supplying newspaper : What are the most important, managerially significant cost of supplying newspaper.

Looking at new sausage system with installed cost : Kolby’s Korndogs is looking at a new sausage system with an installed cost of $896,000. what is the NPV of this project?

Why should patients monitored for adherence to drug regimens : Why should patients be monitored for adherence to drug regimens and/or whether they are developing drug resistant virus?

Exchange for dollars using the bond markets : If the (spot) currency trade between the dollar and the ruble is forbidden for 6 months, but is expected to reopen, build a synthetic

Discuss briefly advantage and disadvantage of one drug used : Discuss briefly an advantage and a disadvantage of one drug used to treat one infectious disease condition. Support with 1 peer peer reviewed journals no older.

Explain why a perfectly competitive firm can sell : Explain why a perfectly competitive firm can sell as much as it wants at the market price but a monopolist must lower its price to sell more.

User Account

All Pages