New sausage system-what is the npv of project

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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? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Reference no: EM131616051

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