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

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Finance

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Masters Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $998,400 is estimated to result in $332,800 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 $145,600. The press also requires an initial investment in spare parts inventory of $41,600, along with an additional $6,240 in inventory for each succeeding year of the project. If the shop's tax rate is 22 percent and its discount rate is 9 percent, what is the NPV for this project? Multiple Choice o $85,211.51 o $87,745.06 o 5-35. 393.05 : 589,47208 o 580.950.93

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