Install the machine press

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Yasmin Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $614,400 is estimated to result in $204,800 in annual pretax cost savings. The press falls in the MACRS five-year class (MACRS Table), and it will have a salvage value at the end of the project of $89,600. The press also requires an initial investment in spare parts inventory of $25,600, along with an additional $3,840 in inventory for each succeeding year of the project. If the shop's tax rate is 30 percent and its discount rate is 12 percent, the NPV for the project is $_______ and the company (should/should not) buy and install the machine press.

Reference no: EM132022644

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