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(Solved): Dog Up! Franks is looking at a new sausage system with an installed cost of $755,000. The asset qual ...



Dog Up! Franks is looking at a new sausage system with an installed cost of $755,000. The asset qualifies for 100 percent bonus depreciation and can be scrapped for $105,000 at the end of the project’s 5-year life. The sausage system will save the firm $223,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $75,000. If the tax rate is 25 percent and the discount rate is 8 percent, what is the NPV of this project?



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