Geary Machine Shop is considering a four-year project to improve its production efficiency. Buying a new...

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Geary Machine Shop is considering a four-year project to improveits production efficiency. Buying a new machine press for $816,000is estimated to result in $272,000 in annual pretax cost savings.The press falls in the MACRS five-year class (MACRS Table), and itwill have a salvage value at the end of the project of $119,000.The press also requires an initial investment in spare partsinventory of $34,000, along with an additional $5,100 in inventoryfor each succeeding year of the project.

Required :
If the shop's tax rate is 30 percent and its discount rate is 20percent, what is the NPV for this project? (Do not roundyour intermediate calculations.)

rev: 09_18_2012
$-147,501.23
$-144,136.65
$-215,451.39
$-154,876.30
$-140,126.17

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Geary Machine Shop is considering a four-year project to improveits production efficiency. Buying a new machine press for $816,000is estimated to result in $272,000 in annual pretax cost savings.The press falls in the MACRS five-year class (MACRS Table), and itwill have a salvage value at the end of the project of $119,000.The press also requires an initial investment in spare partsinventory of $34,000, along with an additional $5,100 in inventoryfor each succeeding year of the project. Required :If the shop's tax rate is 30 percent and its discount rate is 20percent, what is the NPV for this project? (Do not roundyour intermediate calculations.) rev: 09_18_2012$-147,501.23$-144,136.65$-215,451.39$-154,876.30$-140,126.17