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$700,800 is estimated to result in $233,600 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 $102,200. The press also requires an initial investment in spareparts inventory of $29,200, along with an additional $4,380 ininventory for each succeeding year of the project. If the shop'stax rate is 24 percent and its discount rate is 17 percent, what isthe NPV for this project?

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Masters Machine Shop is considering a four-year project toimprove its production efficiency. Buying a new machine press for$700,800 is estimated to result in $233,600 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 $102,200. The press also requires an initial investment in spareparts inventory of $29,200, along with an additional $4,380 ininventory for each succeeding year of the project. If the shop'stax rate is 24 percent and its discount rate is 17 percent, what isthe NPV for this project?