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 $537,600is estimated to result in $179,200 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 $78,400. Thepress also requires an initial investment in spare parts inventoryof $22,400, along with an additional $3,360 in inventory for eachsucceeding year of the project.

Required :
If the shop's tax rate is 32 percent and its discount rate is 17percent, what is the NPV for this project? (Do not roundyour intermediate calculations.)

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Geary Machine Shop is considering a four-year project to improveits production efficiency. Buying a new machine press for $537,600is estimated to result in $179,200 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 $78,400. Thepress also requires an initial investment in spare parts inventoryof $22,400, along with an additional $3,360 in inventory for eachsucceeding year of the project. Required :If the shop's tax rate is 32 percent and its discount rate is 17percent, what is the NPV for this project? (Do not roundyour intermediate calculations.)