Chadron Motors is looking at a new ordering 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 ordering system can be scrapped for $25,000. The ordering 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 11.6 percent, what is the NPV of this project? O $2,077.41 O $6,508.54 O $11,101.87 $8,325.98 -$506.53

Chadron Motors is looking at a new ordering 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 ordering system can be scrapped for $25,000. The ordering 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 11.6 percent, what is the NPV of this project? O $2,077.41 O $6,508.54 O $11,101.87 $8,325.98 -$506.53

Name: man.2 Chadron Motors is looking at a new ordering system with an insta
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Description: man.2 Chadron Motors is looking at a new ordering system with an installed cost of $187,400. This costwill be depreciated straight-line to zero over the project's four-year life, at the end of which theordering system can be scrapped for $25,000. The

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter19: Capital Investment

Section: Chapter Questions

Problem 4CE: Manzer Enterprises is considering two independent investments: A new automated materials handling...

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