Question
In: Finance
Masters Machine Shop is considering a four-year project to improve its production efficiency. Buying a new...
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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. |
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If the shop's tax rate is 24 percent and its discount rate is 8
percent, what is the NPV for this project? |
Multiple Choice
-
$88,573.56
-
$90,537.75
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$-17,643.80
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$93,002.23
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$84,144.88
Solutions
jeff jeffy answered 1 year agoRelated Solutions
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Masters Machine Shop is considering a four-year project to
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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
$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
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Masters Machine Shop is considering a four-year project to improve its production efficiency. Buying a new...
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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
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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 $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...
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