capital budegting

| December 10, 2015
A company is looking at a new sausage system with an installed cost of $709,800. 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 $109,200. The sausage system will save the firm $218,400 per year in pretax operating costs, and the system requires an initial investment in net working capital of $50,960. If the tax rate is 35 percent and the discount rate is 8 percent, the NPV of this project is $? (Round your answer to 2 decimal places).

 

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capital budgeting
budgeting

Category: Finance

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