Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. kolby’s korndogs is looking at a new sausage sys

Kolby’s Korndogs is looking at a new sausage system with an installed cost of $655,000. This...

70.2K

Verified Solution

Question

Finance

Kolby’s Korndogs is looking at a new sausage system with aninstalled cost of $655,000. This cost will be depreciatedstraight-line to zero over the project’s five-year life, at the endof which the sausage system can be scrapped for $107,000. Thesausage system will save the firm $195,000 per year in pretaxoperating costs, and the system requires an initial investment innet working capital of $53,000.

What is the aftertax salvage value of the equipment?

Aftertax salvage value $ What is the annual operating cashflow?

OCF $ If the tax rate is 34 percent and the discount rate is 8percent, what is the NPV of this project?

Answer & Explanation Solved by verified expert
4.1 Ratings (830 Votes)
Solution The after tax salvage value of the equipment 70620The annual operating cash flow each year is as followsInitial    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Transcribed Image Text

Kolby’s Korndogs is looking at a new sausage system with aninstalled cost of $655,000. This cost will be depreciatedstraight-line to zero over the project’s five-year life, at the endof which the sausage system can be scrapped for $107,000. Thesausage system will save the firm $195,000 per year in pretaxoperating costs, and the system requires an initial investment innet working capital of $53,000.What is the aftertax salvage value of the equipment?Aftertax salvage value $ What is the annual operating cashflow?OCF $ If the tax rate is 34 percent and the discount rate is 8percent, what is the NPV of this project?

Other questions asked by students

Q

What is/are the function(s) of the Muscularis externa portion of the GI wall? Compare & contrast...

Medical Sciences
Q

1. Write an introduction about the thermal and mechanical properties of stainless steel and how it...

Civil Engineering
Q

27 Match each of the following examples with the letter to the type of evidence...

Biology
Q

The focal length of eyepiece and objective lens of astronomical telescope are 2 5 cm...

Physics
Q

Seven times a number minus the number is -48. Find the number.the number is 8the...

Basic Math
Q

Sales Variance analysis is useful for: a. planning purposes only b. budgeting purposes only...

Accounting
Q

NB: Previous answer was rejected as it was a cut and paste from Google. ...

Accounting
Q

Income tax expense was $399,430 for the year. Income tax payable was $29,547 and $45,329...

Accounting
Q

Cash Flow Problens on Chapter 11 10 Poins) connect. ACG 3173-Accounting for Decision Makers: Fall...

Accounting
Q

On 01/03/2014, "ABC Company purchased a patent for $980000. The patent was estimated to have...

Accounting
Q

For recent online articles and real-world examples applied to this chapter, consider using the following...

Finance
Q

Spishomework Accounting Fundamentals 1 Renee Laventure & 12/21/19 3:54 Homework: Chapter 3 Assignment Score: 054...

Accounting