Dog Up! Franks is looking at a new sausage system with an installed cost of $525,000. 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 $85,000. The sausage system will save the firm $155,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $33,000. If the tax rate is 24 percent and the discount rate is 12 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.) NPV +影
Dog Up! Franks is looking at a new sausage system with an installed cost of $525,000. 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 $85,000. The sausage system will save the firm $155,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $33,000. If the tax rate is 24 percent and the discount rate is 12 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.) NPV +影
Chapter9: Capital Budgeting And Cash Flow Analysis
Section: Chapter Questions
Problem 10P
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![Dog Up! Franks is looking at a new sausage system with an installed cost of $525,000.
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 $85,000. The sausage system will
save the firm $155,000 per year in pretax operating costs, and the system requires an
initial investment in net working capital of $33,000. If the tax rate is 24 percent and the
discount rate is 12 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.)
NPV
+影](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd063dd4c-e1f8-4e50-891b-2d09938e6933%2F79984f44-2288-4f9e-8173-944a09dd7ba4%2Fmhhpxo5_processed.png&w=3840&q=75)
Transcribed Image Text:Dog Up! Franks is looking at a new sausage system with an installed cost of $525,000.
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 $85,000. The sausage system will
save the firm $155,000 per year in pretax operating costs, and the system requires an
initial investment in net working capital of $33,000. If the tax rate is 24 percent and the
discount rate is 12 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.)
NPV
+影
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