Question
In: Finance
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 $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 of the project.
If the shop's tax rate is 23 percent and its discount rate is 8 percent, what is the NPV for this project?
Multiple Choice
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$91,847.97
-
$93,812.17
-
-$14,201.94
-
$96,440.37
-
$87,255.57
Solutions
jeff jeffy answered 1 year agoRelated Solutions
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savings. The press falls in the MACRS five-year class (MACRS
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inventory for each succeeding year...
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