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XYZ Company is considering the purchase of a new machine. The machine will cost $200,000 and is expected to last 10 years. However, the machine will need maintenance costing $25,000 at the end of year three and at the end of year six. In addition, purchasing this machine would require an immediate investment of $35,000 in working capital which would be released for investment elsewhere at the end of the 10 years. The machine is expected to have a $15,000 salvage value at the end of 10 years. The machine will be used to generate net cash inflows of $48,000 per year in each of the 10 years. XYZ Company has a cost of capital of 8% and an income tax rate of 40%. For tax purposes, the machine would be classified in the MACRS 5-year class life and will be depreciated using the optional straight-line method.

Calculate the net present value (NPV) of this machine. If your answer is negative, place a minus sign in front of your answer with no spaces in between (e.g., -1234).

		MACRS PROPERTY CLASS
	Year	3-Year	5-Year	7-Year
	1	33.33%	20.00%	14.29%
	2	44.45%	32.00%	24.49%
	3	14.81%	19.20%	17.49%
	4	7.41%	11.52%	12.49%
	5	-----	11.52%	8.93%
	6	-----	5.76%	8.92%
	7	-----	-----	8.93%
	8	-----	-----	4.46%

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