If the tax rate is 34 percent and the discount rate is 8


Kolby's Korndogs is looking at a new sausage system with an installed cost of $625,000. 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 $95,000. The sausage system will save the firm $183,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $41,000.

If the tax rate is 34 percent and the discount rate is 8 percent, what is the NPV of this project?(Do not include the dollar sign ($).Round your answer to 2 decimal places (e.g., 32.16).

 

Solution Preview :

Prepared by a verified Expert
Financial Accounting: If the tax rate is 34 percent and the discount rate is 8
Reference No:- TGS0759491

Now Priced at $40 (50% Discount)

Recommended (99%)

Rated (4.3/5)