System requires initial investment in net working capital

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Reference no: EM131835837

Dog Up! Franks is looking at a new sausage system with an installed cost of $445,000. 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 $63,000. The sausage system will save the firm $245,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $22,000. 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 final answer to 2 decimal places. (e.g., 32.16)) NPV

Reference no: EM131835837

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