Reference no: EM132594637

Geary Machine Shop is considering a 4-year project to improve its production efficiency. Buying a new machine press for $791,949 is estimated to result in $224,222 in annual pretax cost savings. The press falls in the MACRS five-year class (Refer to the MACRS table on page 277), and it will have a salvage value at the end of the project of $114,884. The press also requires an initial investment in spare parts inventory of $67,707, along with an additional $13,181 in inventory for each succeeding year of the project. If the shop's tax rate is 0.38 and its discount rate is 0.13, what is the total cash flow in year 4?

MARCS table:

Year Percentage

1 20%

2 32%

3 19.20%

4 11.52%

5 11.52%

6 5.76%

(Do not round your intermediate calculations.)

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