. Fancy Foods is considering replacing all 12 of its meat scales with new, digital ones. The old scales are fully depreciated and have no disposal value. The new scales cost $120,000 (in total). Because the new scales are more efficient and more accurate than the old scales, Fancy Foods will have annual incremental cash savings from using the new scales in the amount of $30,000 per year. The scales have a 6-year useful life and no terminal disposal value and are depreciated using the straight-line method. Fancy Foods requires a 6% real rate of return. Q. Again assuming that the company faces a 25% tax rate, calculate the NPV of the project under an inflation rate of 4%.
. Fancy Foods is considering replacing all 12 of its meat scales with new, digital ones. The old scales are fully
Q. Again assuming that the company faces a 25% tax rate, calculate the NPV of the project under an inflation rate of 4%.
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