Dog Up! Franks is looking at a new sausage system with an installed cost of $520,000 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 $83,000. The sausage system wil save the firm $154,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $32,500. If the tax rate is 23 percent and the discount rate is 11 percent, what is the NPV of this project? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) NPV

Dog Up! Franks is looking at a new sausage system with an installed cost of $520,000 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 $83,000. The sausage system wil save the firm $154,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $32,500. If the tax rate is 23 percent and the discount rate is 11 percent, what is the NPV of this project? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) NPV

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter17: Long-term Investment Analysis

Section: Chapter Questions

Problem 2E

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A steam generation system at a biomass-fueled power plant uses an electrostaticprecipitator (ESP) to clean its gaseous effluents. The power plant has consistently made use ofthe same type of ESP over the past several years. The installed cost of a new ESP has beenrelatively constant at $100,000. Records of operation and maintenance expenses indicate thefollowing average expenses per year as a function of the age of the ESP. The MVs of the ESP arealso reasonably well known as a function of age. Data graph in image attached. Determine the best time to replace the ESP if the MARR is 15% per year.
Kolby's Korndogs is looking at a new sausage system with an installed cost of $670,000. The asset qualifies for 100 percent bonus depreciation and can be scrapped for $88,000 at the end of the project's 5-year life. The sausage system will save the firm $213,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $41,000. If the tax rate is 23 percent and the discount rate is 11 percent, what is the NPV of this project? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) NPV
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Cori's Meats is looking at a new sausage system with an installed cost of $495,000. 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 $73,000. The sausage system will save the firm $175,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $32,000. If the tax rate is 23 percent and the discount rate is 10 percent, what is the NPV of this project?
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5) The First cost of a passenger bus is P800,000. Its estimated life is 4 years with no salvage value. The operating cost per year of 300 days of operation are as follows: Tires, P24,000; gasoline, 60 liters per day at P15 per liter; Oil, P80 per day; maintenance and repair, P40,000; labor P800 per day; miscellaneous expense, P18,000; depreciation, sinking fund at 10%. If the average passenger fare is P3.50 for each passenger one way and expected profit or return is 15% determine the minimum average number of passengers that should be transported each day. Use the a) AW method and b) Future worth method.
Outdoor Sports is considering adding a putt putt golf course to its facility. The course would cost $167,000, would be depreciated on a straight-line basis over its 6-year life, and would have a zero salvage value. The sales would be $84,000 a year, with variable costs of $27,400 and fixed costs of $12,000. In addition, the firm anticipates an additional $15,300 in revenue from its existing facilities if the putt putt course is added. The project will require $2,600 of net working capital, which is recoverable at the end of the project. What is the net present value of this project at a discount rate of 12 percent and a tax rate of 40 percent?