Kolbys Korndogs is looking at a new sausage system with an installed cost of $765,000
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Kolby's Korndogs is looking at a new sausage system with an installed cost of $765,000. This cost will be depreciated straight-line zero over the projects 6 yr life at the end of which the sausage system can be scrapped for $100,000. The sausage system will save the firm $188,000 per yr. in pretax operating costs, and the system requires an initial investment in NWC of $46,000. If the tax is 35% and the discount rate is 7% what is the NPV?
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