Dog Up! Franks is looking at a new sausage system with an installed cost of $748,800. This cost will be depreciated straight-line to zero over the project's 7-year life, at the end of which the sausage system can be scrapped for $115,200. The sausage system will save the firm $230,400 per year in pretax operating costs, and the system requires an initial investment in net working capital of $53,760.
If the tax rate is 24 percent and the discount rate is 8 percent, what is the NPV of this project?
