Cori’s Dog House is considering the installation of a new co…

Cori’s Dog House is considering the installation of a new computerized pressure cooker for hot dogs. The cooker will increase sales by $8,600 per year and will cut annual operating costs by $14,700. The system will cost $50,400 to purchase and install. This system is expected to have a 7-year life and will be depreciated to zero using straight-line depreciation and have no salvage value. The tax rate is 21 percent and the required return is 12.2 percent. What is the NPV of purchasing the pressure cooker?

The Cellar Door currently sells 1,849 units per month for to…

The Cellar Door currently sells 1,849 units per month for total monthly sales of $627,800. The company is considering replacing its current cash-only credit policy with a net 30 policy. The variable cost per unit is $214 and the monthly interest rate is .87 percent. What is the new sales quantity at the switch break-even level of sales?

Gateway Communications is considering a project with an init…

Gateway Communications is considering a project with an initial fixed assets cost of $1.74 million that will be depreciated straight-line to a zero book value over the 10-year life of the project. At the end of the project the equipment will be sold for an estimated $232,000. The project will not change sales but will reduce operating costs by $383,500 per year. The tax rate is 21 percent and the required return is 10.7 percent. The project will require $48,000 in net working capital, which will be recouped when the project ends. What is the project’s NPV?