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In: Finance
CSM Machine Shop is considering a four-year project to improve its production efficiency. Buying a new...
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CSM Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $423,000 is estimated to result in $158,000 in annual pretax cost savings. The press falls in the MACRS five-year class (MACRS Table) and it will have a salvage value at the end of the project of $59,000. The press also requires an initial investment in spare parts inventory of $16,400, along with an additional $3,400 in inventory for each succeeding year of the project. The shop’s tax rate is 24 percent and its discount rate is 11 percent. Calculate the project's NPV. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
Solutions
jeff jeffy answered 2 years agoRelated Solutions
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The press falls in the MACRS five-year class (MACRS Table) and it
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its production efficiency. Buying a new machine press for $950,400
is estimated to result in $316,800 in annual pretax cost savings.
The press falls in the MACRS five-year class (MACRS Table), and it
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inventory of $39,600, along with an additional $5,940 in inventory
for each succeeding year...
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