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Masters Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press
Posted: Sun Jun 05, 2022 10:24 am
by answerhappygod
- Masters Machine Shop Is Considering A Four Year Project To Improve Its Production Efficiency Buying A New Machine Press 1 (84.77 KiB) Viewed 33 times
Masters 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. If the shop's tax rate is 22 percent and its discount rate is 11 percent, what is the NPV for this project?