What is the npv for this project

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Reference no: EM13262201

Geary Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $931,200 is estimated to result in $310,400 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 $135,800. The press also requires an initial investment in spare parts inventory of $38,800, along with an additional $5,820 in inventory for each succeeding year of the project.

Required :

If the shop's tax rate is 35 percent and its discount rate is 8 percent, what is the NPV for this project?

Reference no: EM13262201

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