The Sausage Hut Is Looking at a New Sausage System

question 40

Multiple Choice

The Sausage Hut is looking at a new sausage system with an installed cost of $187,400.This cost will be depreciated straight-line to zero over the project's four-year life, at the end of which the sausage system can be scrapped for $25,000.The sausage system will save the firm $69,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $9,000, which will be recouped at project end.If the tax rate is 34 percent and the discount rate is 12 percent, what is the NPV of this project?

• A)$6,508.54
• B)-$320.81
• C)$560.24
• D)$1,410.10
• E)$8,211.15

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Definitions:

Democratic Vote

A voting method in which individuals express their choice or preference in a matter through a vote, often characterized by equality and fairness.

Political System

The structured set of practices and institutions through which a society organizes and governs itself.

Values Conflict

Occurs when there is a disagreement or discord among personal, cultural, or organizational values, leading to dilemmas or disputes.

Passive People

Individuals who tend to accept actions or events without active response or resistance.