Sausage system with installed cost

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Reference no: EM131902366

Dog Up! Franks is looking at a new sausage system with an installed cost of $512068. 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 $72611. The sausage system will save the firm $192848 per year in pretax operating costs, and the system requires an initial investment in net working capital of $34370. If the tax rate is 37 percent and the discount rate is 10 percent, what is the NPV of this project?

Reference no: EM131902366

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