Question
In: Finance
Geary Machine Shop is considering a four-year project to improve its production efficiency. Buying a new...
Geary Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $691,200 is estimated to result in $230,400 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 $100,800. The press also requires an initial investment in spare parts inventory of $28,800, along with an additional $4,320 in inventory for each succeeding year of the project. Required : If the shop's tax rate is 34 percent and its discount rate is 10 percent, what is the NPV for this project?
Solutions
jeff jeffy answered 1 year agoRelated Solutions
Geary Machine Shop is considering a four-year project to improve its production efficiency. Buying a new...
Geary Machine Shop is considering a four-year project to improve
its production efficiency. Buying a new machine press for
$1,132,800 is estimated to result in $377,600 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 $165,200. The press also requires an initial investment in spare
parts inventory of $47,200, along with an additional $7,080 in
inventory for each succeeding year...
Geary Machine Shop is considering a four-year project to improve its production efficiency. Buying a new...
Geary Machine Shop is considering a four-year project to improve
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
will have a salvage value at the end of the project of $138,600.
The press also requires an initial investment in spare parts
inventory of $39,600, along with an additional $5,940 in inventory
for each succeeding year...
Geary Machine Shop is considering a four-year project to improve its production efficiency. Buying a new...
Geary Machine Shop is considering a four-year project to improve
its production efficiency. Buying a new machine press for $566,400
is estimated to result in $188,800 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 $82,600. The
press also requires an initial investment in spare parts inventory
of $23,600, along with an additional $3,540 in inventory for each
succeeding year...
Geary Machine Shop is considering a four-year project to improve its production efficiency. Buying a new...
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...
Geary Machine Shop is considering a four-year project to improve its production efficiency. Buying a new...
Geary Machine Shop is considering a four-year project to improve
its production efficiency. Buying a new machine press for $969,600
is estimated to result in $323,200 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 $141,400.
The press also requires an initial investment in spare parts
inventory of $40,400, along with an additional $6,060 in inventory
for each succeeding year...
Geary Machine Shop is considering a four-year project to improve its production efficiency. Buying a new...
Geary Machine Shop is considering a four-year project to improve
its production efficiency. Buying a new machine press for $844,800
is estimated to result in $281,600 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 $123,200.
The press also requires an initial investment in spare parts
inventory of $35,200, along with an additional $5,280 in inventory
for each succeeding year...
Geary Machine Shop is considering a four-year project to improve its production efficiency. Buying a new...
Geary Machine Shop is considering a four-year project to improve
its production efficiency. Buying a new machine press for $547,200
is estimated to result in $182,400 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 $79,800. The
press also requires an initial investment in spare parts inventory
of $22,800, along with an additional $3,420 in inventory for each
succeeding year...
Geary Machine Shop is considering a four-year project to improve its production efficiency. Buying a new...
Geary Machine Shop is considering a four-year project to improve
its production efficiency. Buying a new machine press for $547,200
is estimated to result in $182,400 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 $79,800. The
press also requires an initial investment in spare parts inventory
of $22,800, along with an additional $3,420 in inventory for each
succeeding year...
Geary Machine Shop is considering a four-year project to improve its production efficiency. Buying a new...
Geary Machine Shop is considering a four-year project to improve
its production efficiency. Buying a new machine press for
$1,094,400 is estimated to result in $364,800 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 $159,600. The press also requires an initial investment in spare
parts inventory of $45,600, along with an additional $6,840 in
inventory for each succeeding year...
Geary Machine Shop is considering a four-year project to improve its production efficiency. Buying a new...
Geary Machine Shop is considering a four-year project to improve
its production efficiency. Buying a new machine press for $681,600
is estimated to result in $227,200 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 $99,400. The
press also requires an initial investment in spare parts inventory
of $28,400, along with an additional $4,260 in inventory for each
succeeding year...
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