Cori's Meats is looking at a new sausage system with an installed cost of $465,000. 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 $67,000. The sausage system will save the firm $225,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $26,00O. If the tax rate is 23 percent and the discount rate is 9 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
Cori's Meats is looking at a new sausage system with an installed cost of $465,000. 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 $67,000. The sausage system will save the firm $225,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $26,00O. If the tax rate is 23 percent and the discount rate is 9 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
Chapter9: Capital Budgeting And Cash Flow Analysis
Section: Chapter Questions
Problem 10P
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