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

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Masters Machine Shop is considering a four-year project toimprove its production efficiency. Buying a new machine press for$844,800 is estimated to result in $281,600 in annual pretax costsavings. The press falls in the MACRS five-year class (MACRSTable), and it will have a salvage value at the end of the projectof $123,200. The press also requires an initial investment in spareparts inventory of $35,200, along with an additional $5,280 ininventory for each succeeding year of the project.

If the shop's tax rate is 24 percent and its discount rate is 8percent, what is the NPV for this project?
Multiple Choice
$88,573.56
$90,537.75
$-17,643.80
$93,002.23
$84,144.88

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Masters Machine Shop is considering a four-year project toimprove its production efficiency. Buying a new machine press for$844,800 is estimated to result in $281,600 in annual pretax costsavings. The press falls in the MACRS five-year class (MACRSTable), and it will have a salvage value at the end of the projectof $123,200. The press also requires an initial investment in spareparts inventory of $35,200, along with an additional $5,280 ininventory for each succeeding year of the project. If the shop's tax rate is 24 percent and its discount rate is 8percent, what is the NPV for this project?Multiple Choice$88,573.56$90,537.75$-17,643.80$93,002.23$84,144.88