Solution-What is the npv of project

What is the npv of project

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Hog Tavern is looking at a new sausage system with an installed cost of $435,000. 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 $61,000. The sausage system will save the firm $255,000 per year in pretax operating costs, and system requires initial investment in the net working capital of $20,000, which will be recovered in the last year of the project. Assume the tax rate is 35 percent and the discount rate is 9 percent. What is the NPV of this project?

Reference no: EM131251325

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What is the npv of project

Reference no: EM131251325

Reference no: EM131251325

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