The sausage hut is looking at a new sausage system with an


The Sausage Hut is looking at a new sausage system with an installed cost of $187,400. This cost will be depreciated straight-line to zero over the project's four-year life, at the end of which the sausage system can be scrapped for $25,000. The sausage system will save the firm $69,000 per year in pre-tax operating costs, and the system requires an initial investment in net working capital of $9,000, which will be recouped at project end. If the tax rate is 34 percent and the discount rate is 12 percent, what is the NPV of this project?

A) $8,211.15

B) $6,508.54

C) -$320.81

D) $1,410.10

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Financial Management: The sausage hut is looking at a new sausage system with an
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