Kolbyrsquos korndogs is looking at a new sausage system, Ask an Expert

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Kolby’s Korndogs is looking at a new sausage system with an installed cost of $645,000. 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 $103,000. The sausage system will save the firm $191,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $49,000. Required: If the tax rate is 34 percent and the discount rate is 8 percent, what is the NPV of this project?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91608039

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