Project Evaluation: Kolby's Korndogs is looking at a new sausage system with an installed cost of $655,000. The cost will be depreciated straight-line to zero over the project's five-year life, at the end of which the sausage stystem can be scrapped for $85,000. The sausage system will save the firm $183,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $35,000. If the tax rate is 22 percent and the discount rate is 8 percent, what is the NPV of this project? Can the calculator and excel solution be provided?
Project Evaluation: Kolby's Korndogs is looking at a new sausage system with an installed cost of $655,000. The cost will be depreciated straight-line to zero over the project's five-year life, at the end of which the sausage stystem can be scrapped for $85,000. The sausage system will save the firm $183,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $35,000. If the tax rate is 22 percent and the discount rate is 8 percent, what is the NPV of this project? Can the calculator and excel solution be provided?
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
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Project Evaluation:
Kolby's Korndogs is looking at a new sausage system with an installed cost of $655,000. The cost will be
Can the calculator and excel solution be provided?
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