Purchase Solution

Calculate NPV of new sausage system costing $678,600

Not what you're looking for?

Ask Custom Question

A company is looking at a new sausage system with an installed cost of $678,600. This cost will be depreciated straight-line to zero over the project's 10-year life, at the end of which the sausage system can be scrapped for $104,400. The sausage system will save the firm $208,800 per year in pretax operating costs, and the system requires an initial investment in net working capital of $48,720. If the tax rate is 31% and the discount rate is 13%, the NPV of this project is $_______.
(Round answer to 2 decimal places.)

Purchase this Solution
Solution Summary

In Excel, the solution calculates the answer to the problem.

Solution provided by:
Manal Elkhoshkhany, MBA
Education
  • BA, Ain Shams University, Cairo Egypt
  • MBA, California State University, Sacramento
Recent Feedback
  • "ty i have more need help with"
  • "ty i have jmore i need help with"
  • "great help"
  • "excellent help"
  • "Very helpful and easy to understand."
Purchase this Solution
Free BrainMass Quizzes
Academic Reading and Writing: Critical Thinking

Importance of Critical Thinking

Organizational Behavior (OB)

The organizational behavior (OB) quiz will help you better understand organizational behavior through the lens of managers including workforce diversity.

Basic Social Media Concepts

The quiz will test your knowledge on basic social media concepts.

Understanding Management

This quiz will help you understand the dimensions of employee diversity as well as how to manage a culturally diverse workforce.

Understanding the Accounting Equation

These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.

View More Free Quizzes
Related BrainMass Solutions

  • Dog Up! Franks NPV

    Franks NPV Dog Up! Franks is looking at a new sausage system costing $515,000, depreciated using straight line method over five years with a $77,000 salvage value.

  • What is the NPV for the new project at Dog UP! Franks?

    167997 Project Evaluation and NPV for Dog UP! Franks Dog UP! Franks is looking at a new sausage system with an installed cost of $440,000.

  • Net Present Value of a Depreciable Asset

    ., 32.16)) NPV $ Franks is looking at a new sausage system with an installed cost of $490,000.

  • Calculating NET PRESENT VALUE (NPV)

    57228 Calculating NET PRESENT VALUE (NPV) Frank is looking at a new sausage system with an installed cost of $483,600.

  • Capital investment in a new sewing machine

    Company should replace the old machine As NPV of option 2 (I.e. machine costing 360000 ) is higher than option 1 (machine costing 190000)company should replace old machine with the machine costing 360,000 Excel file contains calculations of

  • Average weighted cost of capital..

    the NPV and payback period for the purchase of new production equipment, costing $1,000,000, to replace existing fully depriiated equipment.

  • Cash Flow, IRR and NPV

    307871 Cash Flow, IRR and NPV The Leo Lip Company is considering opening a new store location that would be available for seven years until the lease expired. The project would require fixtures and equipment costing $276,000.

  • Calculating the Capital Investment

    The cash benefits will be $600000/yr. the system costs $3600000 and will last 8 yrs. compute the NPV assuming a discount rate of 10%. Should the company buy the new system? 2.

  • Finance: Net present value,payback and IRR

    A new marketing program, costing $1,000,000, which is expected to increase current sales of $10,000,000/year by 20% for the next 3 years only. The current contribution margin of 40% will remain in effect even with this sales increase.

View More Related Solutions