Symon meats is looking at new sausage system

Assignment Help Financial Management

Reference no: EM131878269

Symon Meats is looking at a new sausage system with an installed cost of $520,000. 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 $78,000. The sausage system will save the firm $200,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $37000. If the tax rate is 30 percent and the discount rate is 8 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: EM131878269

Questions Cloud

The loan balance begin to exceed the house value : No payments are made thereafter. How many years from loan closing will the loan balance begin to exceed the house value?

What is the market value of bond : If similar bonds are currently yielding 7% annually, what is the market value of the bond?

How does the finance function interface : How does the finance function interface with and impact the innovation process?

How much money do they need to satisfy their investment goal : How much money do they need to satisfy their investment goals? How much risk are they willing to assume in an investment program?

Symon meats is looking at new sausage system : Symon Meats is looking at a new sausage system with an installed cost of $520,000. what is the NPV of this project?

Budget interest reflected in this case study : Explain the question[s] of budget interest reflected in this case study.

Use this information to find the forward rate on a security : Assuming that interest is compounded, use this information to find the forward rate on a security with a maturity of one year one year from now.

A fair market interest rate for such bonds : Would you pay $875 for each bond if you thought that a "fair" market interest rate for such bonds was 12%-that is, if rd = 12%?

Compute jill’s annual irr from owning net of renting : Buying expenses are 5% of purchase price and selling expenses are 8% of sale price. Compute Jill’s annual IRR from owning net of renting.

User Account

All Pages