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  • Oct 7, 2011, 03:18 AM
    mayankabhi
    Npv question solution?
    Neat Frankies is looking at a new cooking system with an installed cost of Rs440,000. This cost will be depreciated straight line to zero over the project?s 5-yr life, at the end of which the system can be scrapped for Rs60,000. The system will save the firm Rs130,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of Rs34,000. If the tax rate is 34% and the discount rate is 10%, what is the NPV of this project.

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