Four-year project to improve production efficiency

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Reference no: EM132024597

Purple Haze Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $487294 is estimated to result in some amount of annual pretax cost savings. The press will have an aftertax salvage value at the end of the project of $87070. The OCFs of the project during the 4 years are $174107, $190407, $170219 and $163528, respectively. The press also requires an initial investment in spare parts inventory of $24019, along with an additional $4257 in inventory for each succeeding year of the project. The shop's discount rate is 5 percent. What is the NPV for this project? (Round your final answer to the nearest dollar amount. Omit the "$" sign and commas in your response. For example, $123,456.78 should be entered as 123457.

Reference no: EM132024597

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