Question

Please give a step by step solution so I can understand how to solve it. Dog Up! Franks is looking at a new sausage system with an installed cost of $501934. 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 $78340. The sausage system will save the firm $191997 per year in pretax operating costs, and the system requires an initial investment in net working capital of $31224. If the tax rate is 32 percent and the discount rate is 9 percent, what is the NPV of this project? (Do not round intermediate calculations and round your final answer to the nearest dollar amount. Omit the "$" sign and commas in your response. For example, $123,456.78 should be entered as 123457.)

Answer 1