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(Solved): Problem 10-14 Project Evaluation [LO1] Symon! Franks is looking at a new sausage system with an inst ...



Problem 10-14 Project Evaluation [LO1] Symon! Franks is looking at a new sausage system with an installed cost of $440,000. 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 $51,000. The sausage system will save the firm $138,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $24,500. If the tax rate is 22 percent and the discount rate is 10 percent, what is the NPV of this project? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.



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