Kolby’s Korndogs is looking at a new sausage system with an installed cost of $690,000. This cost will be depreciated st

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answerhappygod
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Kolby’s Korndogs is looking at a new sausage system with an installed cost of $690,000. This cost will be depreciated st

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Kolby’s Korndogs is looking at a new sausage system with an
installed cost of $690,000. This cost will be depreciated
straight-line to zero over the project’s 5-year life, at the end of
which the sausage system can be scrapped for $92,000. The sausage
system will save the firm $224,000 per year in pretax operating
costs, and the system requires an initial investment in net working
capital of $49,000.

What is the aftertax salvage value of the equipment?
What is the annual operating cash flow?
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