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Masters Machine Shop is considering a four-year project to improve its production efficiency. Buying a new...
Masters Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $405,000 is estimated to result in $157,000 in annual pretax cost savings. The press falls in the MACRS five-year class, and it will have a salvage value at the end of the project of $57,000. The press also requires an initial investment in spare parts inventory of $24,000, along with an additional $3,300 in inventory for each succeeding year of the project. The shop’s tax rate is 24 percent and its discount rate is 11 percent. (MACRS schedule)
Calculate the NPV of this project. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
NPV:
Solutions
jeff jeffy answered 1 year agoRelated Solutions
Masters Machine Shop is considering a four-year project to improve its production efficiency. Buying a new...
Masters Machine Shop is considering a four-year project to
improve its production efficiency. Buying a new machine press for
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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 $162,400. The press also requires an initial investment in spare
parts inventory of $46,400, along with an additional $6,960 in
inventory for each succeeding year...
Masters Machine Shop is considering a four-year project to improve its production efficiency. Buying a new...
Masters Machine Shop
is considering a four-year project to improve its production
efficiency. Buying a new machine press for $435,000 is estimated to
result in $175,000 in annual pretax cost savings. The press falls
in the MACRS five-year class, and it will have a salvage value at
the end of the project of $71,000. The press also requires an
initial investment in spare parts inventory of $30,000, along with
an additional $3,600 in inventory for each succeeding year of the...
Masters Machine Shop is considering a four-year project to improve its production efficiency. Buying a new...
Masters Machine Shop is considering a four-year project to
improve its production efficiency. Buying a new machine press for
$816,000 is estimated to result in $272,000 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 $119,000. The press also requires an initial investment in spare
parts inventory of $34,000, along with an additional $5,100 in
inventory for each succeeding year...
Masters Machine Shop is considering a four-year project to improve its production efficiency. Buying a new...
Masters Machine Shop is considering a four-year project to
improve its production efficiency. Buying a new machine press for
$729,600 is estimated to result in $243,200 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 $106,400. The press also requires an initial investment in spare
parts inventory of $30,400, along with an additional $4,560 in
inventory for each succeeding year...
Masters Machine Shop is considering a four-year project to improve its production efficiency. Buying a new...
Masters Machine Shop is considering a four-year project to
improve its production efficiency. Buying a new machine press for
$1,113,600 is estimated to result in $371,200 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 $162,400. The press also requires an initial investment in spare
parts inventory of $46,400, along with an additional $6,960 in
inventory for each succeeding year...
Masters Machine Shop is considering a four-year project to improve its production efficiency. Buying a new...
Masters Machine Shop is considering a four-year project to
improve its production efficiency. Buying a new machine press for
$854,400 is estimated to result in $284,800 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 $124,600. The press also requires an initial investment in spare
parts inventory of $35,600, along with an additional $5,340 in
inventory for each succeeding year...
Masters Machine Shop is considering a four-year project to improve its production efficiency. Buying a new...
Masters Machine Shop is considering a four-year project to
improve its production efficiency. Buying a new machine press for
$931,200 is estimated to result in $310,400 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 $135,800. The press also requires an initial investment in spare
parts inventory of $38,800, along with an additional $5,820 in
inventory for each succeeding year...
Masters Machine Shop is considering a four-year project to improve its production efficiency. Buying a new...
Masters Machine Shop is considering a four-year project to
improve its production efficiency. Buying a new machine press for
$1,017,600 is estimated to result in $339,200 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 $148,400. The press also requires an initial investment in spare
parts inventory of $42,400, along with an additional $6,360 in
inventory for each succeeding year...
Masters Machine Shop is considering a four-year project to improve its production efficiency. Buying a new...
Masters Machine Shop is considering a four-year project to
improve its production efficiency. Buying a new machine press for
$796,800 is estimated to result in $265,600 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 $116,200. The press also requires an initial investment in spare
parts inventory of $33,200, along with an additional $4,980 in
inventory for each succeeding year...
Masters Machine Shop is considering a four-year project to improve its production efficiency. Buying a new...
Masters Machine Shop is considering a four-year project to
improve its production efficiency. Buying a new machine press for
$480,000 is estimated to result in $202,000 in annual pretax cost
savings. The press falls in the MACRS five-year class, and it will
have a salvage value at the end of the project of $73,000. The
press also requires an initial investment in spare parts inventory
of $39,000, along with an additional $4,050 in inventory for each
succeeding year of the...
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