New sausage system-what is the NPV of this project

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Reference no: EM131592293

Kolby's Korndogs is looking at a new sausage system with an installed cost of $655,000. 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 $85,000. The sausage system will save the firm $183,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of exist35,000. If the tax rate is 34 percent and the discount rate is 8 percent, what is the NPV of this project?

Reference no: EM131592293

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