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Dog Up! Franks is looking at a new sausage system with aninstalled cost of $897,000. This cost will be depreciatedstraight-line to zero over the project's 9-year life, at the end ofwhich the sausage system can be scrapped for $138,000. The sausagesystem will save the firm $276,000 per year in pretax operatingcosts, and the system requires an initial investment in net workingcapital of $64,400. Required: If the tax rate is 33 percent and thediscount rate is 13 percent, what is the NPV of this project?
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