Dog Up! Franks is looking at a new sausage system with an installed cost of $680,000. This cost will be depreciated straight-line to zero over the project's 5-year life, at the end of which the sausage system can be scrapped for $90,000. The sausage system will save the firm $193,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $45,000. If the tax rate is 25 percent and the discount rate is 9 percent, what is the NPV of this project? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. NPV
Dog Up! Franks is looking at a new sausage system with an installed cost of $680,000. This cost will be depreciated straight-line to zero over the project's 5-year life, at the end of which the sausage system can be scrapped for $90,000. The sausage system will save the firm $193,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $45,000. If the tax rate is 25 percent and the discount rate is 9 percent, what is the NPV of this project? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. NPV
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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Please help me solve this question by using Excel. Find the NPV for Dog Up! Franks
![Problem 9-14 Project Evaluation [LO 2]
Dog Up! Franks is looking at a new sausage system with an installed cost of
$680,000. This cost will be depreciated straight-line to zero over the project's
5-year life, at the end of which the sausage system can be scrapped for
$90,000. The sausage system will save the firm $193,000 per year in pretax
operating costs, and the system requires an initial investment in net working
capital of $45,000. If the tax rate is 25 percent and the discount rate is 9
percent, what is the NPV of this project?
Note: Do not round intermediate calculations and round your answer to 2
decimal places, e.g., 32.16.
NPV](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F483c3d17-1621-47af-bfd2-86acecf64938%2F4821240e-9baa-4a1d-a238-f0281b0bf61b%2Fvvxw7a_processed.png&w=3840&q=75)
Transcribed Image Text:Problem 9-14 Project Evaluation [LO 2]
Dog Up! Franks is looking at a new sausage system with an installed cost of
$680,000. This cost will be depreciated straight-line to zero over the project's
5-year life, at the end of which the sausage system can be scrapped for
$90,000. The sausage system will save the firm $193,000 per year in pretax
operating costs, and the system requires an initial investment in net working
capital of $45,000. If the tax rate is 25 percent and the discount rate is 9
percent, what is the NPV of this project?
Note: Do not round intermediate calculations and round your answer to 2
decimal places, e.g., 32.16.
NPV
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