New sausage system with an installed cost

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Symon Meats is looking at a new sausage system with an installed cost of $245,000. 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 $30,000. The sausage system will save the firm $85,000 per year in pretax operating costs, and the system requires an initial investment in networking capital of $13,000. If the tax rate is 34% and the discount rate is 10%, what is the NPV of the project?

Reference no: EM131448482

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New sausage system with an installed cost : Symon Meats is looking at a new sausage system with an installed cost of $245,000. 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 $30,000. The sausage ..

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