Page 1 of 1

The Sausage Hut is looking at a new sausage system with an installed cost of $330,000. This cost will be depreciated str

Posted: Sun Apr 17, 2022 6:25 pm
by answerhappygod
The Sausage Hut is looking at a new sausage system with an
installed cost of $330,000. This cost will be depreciated
straight-line to zero over the project's three-year life, at the
end of which the sausage system is estimated to have zero value.
The project has no impact on net working capital. Each year during
its three year life, the new system will increase the firm’s Sales
by $455,000 and its Operating Cash Flow by $123,300. If the tax
rate is 30 percent and the discount rate is 9 percent, what is the
NPV of this project?
Group of answer choices
-111,524
- $17,891
$19,405
$35,389
$1,136,217