In: Finance
Geary Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $1,152,000 is estimated to result in $384,000 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 $168,000. The press also requires an initial investment in spare parts inventory of $48,000, along with an additional $7,200 in inventory for each succeeding year of the project. |
Required : |
If the shop's tax rate is 33 percent and its discount rate is 14 percent, what is the NPV for this project? (Do not round your intermediate calculations.) |