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Dog Up! Franks is looking at a new sausage system with an installed cost of $750,000. This cost will be depreciated straight-line to- zero over the project's 7-year life, at the end of which the sausage system can be scrapped for $104,000. The sausage system will save the firm $221,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $73,000. What is the aftertax salvage value of the equipment? Note: Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32. Aftertax salvage value OCF $ What is the annual operating cash flow? Note: Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32. 79,040 NPV of the tax rate is 24 percent and the discount rate is 11 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.

Dog Up! Franks is looking at a new sausage system with an installed cost of $750,000. This cost will be depreciated straight-line to- zero over the project's 7-year life, at the end of which the sausage system can be scrapped for $104,000. The sausage system will save the firm $221,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $73,000. What is the aftertax salvage value of the equipment? Note: Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32. Aftertax salvage value OCF $ What is the annual operating cash flow? Note: Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32. 79,040 NPV of the tax rate is 24 percent and the discount rate is 11 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.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Ee 326.

Dog Up! Franks is looking at a new sausage system with an installed cost of $750,000. This cost will be depreciated straight-line to zero over the project's 7-year life, at the end of which the sausage system can be scrapped for $104,000. The sausage system will save the firm $221,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $73,000. What is the aftertax salvage value of the equipment? Note: Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32. Aftertax salvage value OCF $ What is the annual operating cash flow? Note: Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32. 79,040 NPV If the tax rate is 24 percent and the discount rate is 11 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.
Transcribed Image Text:Dog Up! Franks is looking at a new sausage system with an installed cost of $750,000. This cost will be depreciated straight-line to zero over the project's 7-year life, at the end of which the sausage system can be scrapped for $104,000. The sausage system will save the firm $221,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $73,000. What is the aftertax salvage value of the equipment? Note: Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32. Aftertax salvage value OCF $ What is the annual operating cash flow? Note: Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32. 79,040 NPV If the tax rate is 24 percent and the discount rate is 11 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.
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