Dog Up! Franks is looking at a new sausage system with an initial cost of $440,000 that will last for five years. The fixed asset will qualify for 100 percent bonus depreciation in the first year, at the end of which the sausage system can be scrapped for $51,000. The sausage system will save the firm $138,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $24,500. If the tax rate is 22 percent and the discount rate is 10 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.)
Dog Up! Franks is looking at a new sausage system with an initial cost of $440,000 that will last for five years. The fixed asset will qualify for 100 percent bonus depreciation in the first year, at the end of which the sausage system can be scrapped for $51,000. The sausage system will save the firm $138,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $24,500. If the tax rate is 22 percent and the discount rate is 10 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.)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Dog Up! Franks is looking at a new sausage system with an initial cost of $440,000 that will last for five years. The fixed asset will qualify for 100 percent bonus |
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