what is the NPV of this project? 1 answer below »

Project Evaluation. Cable Bay Hotdogs is looking at a new sausage system with an installed cost of $560 000. 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 $85 000. The sausage system will save the firm $153 000 per year in pre-tax operating costs, and the system requires an initial investment in net working capital of $38 000. If the tax rate is 30% and the discount rate is 8%, what is the NPV of this project?

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