Dog Up! Franks Is Looking at a New Sausage System

question 28

Multiple Choice

Dog Up! Franks is looking at a new sausage system with an installed cost of $397,800.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 $61,200.The sausage system will save the firm $122,400 per year in pretax operating costs,and the system requires an initial investment in net working capital of $28,560.All of the net working capital will be recovered at the end of the project.The tax rate is 33 percent and the discount rate is 9 percent.What is the net present value of this project?

• A)-$41,311
• B)-$7,820
• C)$81,507
• D)$98,441
• E)$118,821

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Definitions:

Sleep Deprivation

Sleep deprivation refers to the condition of not having enough sleep, which can negatively affect cognitive functions, mood, and overall health.

Settling Point

A theory suggesting that body weight is regulated at a predetermined, or "settling," point by the balance between energy intake and energy expenditure.

Decreases In Ghrelin

A reduction in the levels of ghrelin, a hormone that stimulates appetite, which can affect hunger and food intake.

Neophobia

The fear of anything new, including new objects, situations, or experiences.