Question
In: Finance
Dog Up! Franks is looking at a new sausage system with an initial cost of $525,000...
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Dog Up! Franks is looking at a new sausage system with an initial cost of $525,000 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 $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.) |
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Solutions
Expert Solution
The results obtained are as follows:
Thus, the NPV of the project
is $34,523.50.
jeff jeffy answered 2 months agoRelated Solutions
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