FAU FIN 3403 Dog Up Example - Chapter 10, Problem 13 Dog...

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Chapter 10, Problem 13Dog Up! Franks is looking at a new sausage system with an installed cost of $560,000. This costwill be depreciated straight-line to zero over the project's five-year life, at the end of which thesausage system can be scrapped for $85,000. The sausage system will save the firm $165,000 peryear in pretax operating costs, and the system requires an initial investment in net workingcapital of $29,000. If the tax rate is 34 percent and the discount rate is 10 percent, the NPV ofthis project is $??
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