Geary Machine Shop is considering a four-year project to improve its production efficiency. Buying a...
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| Geary Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $1,046,400 is estimated to result in $348,800 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 $152,600. The press also requires an initial investment in spare parts inventory of $43,600, along with an additional $6,540 in inventory for each succeeding year of the project. |
| Required : |
| 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.) |
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