New sausage system with an installed cost

Assignment Help Financial Management

Reference no: EM131446174

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

Reference no: EM131446174

Questions Cloud

Microsoft sdl threat modeling process : What are the benefits or issues with Microsoft's SDL Threat Modeling process and tool? What organizations would benefit from Threat Modeling? Is it for everyone?

Calculate descriptive statistics for the unit prices : Visually present data for the unit prices of Zara's products for the three different styles. Calculate descriptive statistics for the unit prices of Zara's products for the three different styles. Comments on the location, shape and variability of..

Define the management systems essential for organizations : Why is alignment of strategy, structure, and management systems essential for organizations to coordinate sustainability activities and to motivate employees? What is your organization doing to motivate you to work harder, longer, etc.?

Review the content of your selected journal article : Choose one main point from Week 2 Assignment Critical Reading and Outlining and review the Learning Resources related to summary and academic integrity.

New sausage system with an installed cost : 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. If the t..

Identify the ethical dilemma that the scenario presents : Clearly define and evaluate three legal concepts that were discussed in the text and that apply to the company. Identify the ethical dilemma that the scenario presents and evaluate two ethical frameworks that applied to management's decisions.

Identify a decision support tool for the business : Within the context of your local business, organization or place of employment, identify a decision support tool that could be effectively used. Be sure that you provide a rationale for the decision support tool of your choice.

Prepare a detailed report outlining the correct procedures : Prepare a detailed report outlining the correct procedures that should have been followed and documentation that should have been used in order for Skyway to have avoided the penalties incurred.

What is the effective annual interest : At the end of five years, an account paying 6% interest, compounded continuously, shows a balance of $10,797.87. if only an initial deposit was made, what was the amount? What is the effective annual interest?

User Account

All Pages