What is the aftertax salvage value of the equipment

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Reference no: EM13951571

Kolby’s Korndogs is looking at a new sausage system with an installed cost of $910,000. This cost will be depreciated straight-line to zero over the project’s seven-year life, at the end of which the sausage system can be scrapped for $105,000. The sausage system will save the firm $193,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $51,000. Required: What is the aftertax salvage value of the equipment? (Do not round intermediate calculations. Round your answer to the nearest whole number (e.g., 32).) Aftertax salvage value $ 73500 What is the annual operating cash flow? (Do not round intermediate calculations. Round your answer to the nearest whole number (e.g., 32).) OCF $ 390000 If the tax rate is 30 percent and the discount rate is 6 percent, what is the NPV of this project? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

Reference no: EM13951571

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