What is the npv of project for happy jacks hot dogs

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Problem 1: Happy Jacks Hot Dogs 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 projects 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 pre-tax operating costs, and the system requires an initial investment in net working capital of $35,000. If the tax rate is 30% and the discount rate is 8%, what is the NPV of this project?

Reference no: EM133011525

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