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Dog Up! Franks is looking at a new sausage system with an installed cost of...

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Finance

Dog Up! Franks is looking at a new sausage system with an installed cost of $351,000. This cost will be depreciated straight-line to zero over the project's 4-year life, at the end of which the sausage system can be scrapped for $54,000. The sausage system will save the firm $108,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $25,200.

If the tax rate is 22 percent and the discount rate is 13 percent, what is the NPV of this project?

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