Calculate the npv of project

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Reference no: EM132724210

Caradoc Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $423,000 is estimated to result in $163,000 in annual pre-tax cost savings. The press falls into Class 8 for CCA purposes (CCA rate of 20% per year), and it will have a salvage value at the end of the project of $56,300. The press also requires an initial investment in spare parts inventory of $33,000, along with an additional $4,400 in inventory for each succeeding year of the project. If the shop's tax rate is 35% and its discount rate is 9%.

Calculate the NPV of this project. (Do not round your intermediate calculations. Round the final answer to 2 decimal places. Omit $ sign in your response.)

NPV $

Should the company buy and install the machine press?

multiple choice

-Yes

-No

Reference no: EM132724210

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