Npv of project-company looking at new sausage system


Problem:

A company is looking at a new sausage system with an installed cost of $678,600. This cost will be depreciated straight-line to zero over the project's 10-year life, at the end of which the sausage system can be scrapped for $104,400. The sausage system will save the firm $208,800 per year in pretax operating costs, and the system requires an initial investment in net working capital of $48,720. If the tax rate is 31% and the discount rate is 13%, the NPV of this project is $_______.

(Round answer to 2 decimal places.)

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Finance Basics: Npv of project-company looking at new sausage system
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