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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 $1,027,200 is estimated to result in $342,400 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 $149,800. The press also requires an initial investment in spare parts inventory of $42,800, along with an additional $6,420 in inventory for each succeeding year of the project.

If the shop's tax rate is 32 percent and its discount rate is 9 percent, what is the NPV for this project? (Do not round your intermediate calculations.)

  
$48,830.16

$51,436.80

$-77,215.72

$51,271.67

$46,388.65

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SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

jeff jeffy answered 10 months ago
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