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Dog Up! Franks NPV

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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. The sausage system will save $195,000 annually in pretax operating costs, and the project requires an initial working capital of $36,000.. If the tax rate is 35 percent and the discount rate is 9 percent, what is the NPV ?

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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. This cost will be depreciated straight-line to zero over the project's fiver-year life, at the end of which the sausage system can be scrapped for $60,000. The sausage system will save the firm $130,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $34,000. If the tax rate is 34% and the discount rate is 10%, what is the NPV of this project?

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