Toronto Food Services is considering installing a new refrigeration system that will cost $500,000. The...
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Toronto Food Services is considering installing a new refrigeration system that will cost $500,000. The system will be depreciated at a rate of 20% (Class 8) per year over the systems five-year life and then it will be sold for $70,000. The new system will save $250,000 per year in pre-tax operating costs. An initial investment of $60,000 will have to be made in working capital. The tax rate is 35% and the discount rate is 10%. Calculate the NPV of the new refrigeration system. For full marks you must either show your calcualtions in the space provided below or you can submit your calculations to the drop box provided in the Assignment area of Blackboard.
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