CSM Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $407,000 is estimated to result in $150,000 in annual pretax cost savings. The press is eligible for 100 percent bonus depreciation and it will have a salvage value at the end of the project of $51,000. The press also requires an initial investment in spare parts inventory of $15,600, along with an additional $2,600 in inventory for each succeeding year of the project. The shop’s tax rate is 21 percent and its discount rate is 8 percent. Calculate the project's NPV. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
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CSM Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $407,000 is estimated to result in $150,000 in annual pretax cost savings. The press is eligible for 100 percent bonus |
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