Masters Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $445,000 is estimated to result in $181,000 in annual pretax cost savings. The press falls in the MACRS five-year class, and it will have a salvage value at the end of the project of $73,000. The press also requires an initial investment in spare parts inventory of $32,000, along with an additional $3,700 in inventory for each succeeding year of the project. The shop's tax rate is 22 percent and its discount rate is 11 percent. (MACRS schedule)
Calculate the NPV of this project. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Should the company buy and install the machine press?
Masters Machine Shop is considering a four-year project to improve its production efficiency
10 Masters Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $390,000 is estimated to result in $148,000 in annual pretax cost savings. The press falls in the MACRS five-year class, and it will have a salvage value at the end of the project of $48,000. The press also requires an initial investment in spare parts inventory of $21,000, along with an additional $3,150 in inventory for each succeeding year of...
Masters Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $470,000 is estimated to result in $196,000 in annual pretax cost savings. The press falls in the MACRS five-year class, and it will have a salvage value at the end of the project of $72,000. The press also requires an initial investment in spare parts inventory of $37,000, along with an additional $3,950 in inventory for each succeeding year of the...
Masters Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $460,000 is estimated to result in $190,000 in annual pretax cost savings. The press falls in the MACRS five-year class, and it will have a salvage value at the end of the project of $74,000. The press also requires an initial investment in spare parts inventory of $35,000, along with an additional $3,850 in inventory for each succeeding year of the...
Masters Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $796800 is estimated to result in $265600 in annual pretax cost savings. The press falls in the MACRS (MACRS Table) five-year class and it will have a salvage value at the end of the project of $116200. The press also requires an initial investment in spare parts inventory of $33200, along with an additional $4980 in inventory for each succeeding year...
Masters Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $556,800 is estimated to result in $185,600 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 $81,200. The press also requires an initial investment in spare parts inventory of $23,200, along with an additional $3,480 in inventory for each succeeding year...
Masters Machine Shop is considering a four year project to improve its production efficiency. Buying a new machine press for $385000 is estw to result in $145,000 in annual pretax cast savings. The press falls in the MACRS five year class and it will have a salvage value at the end of the project of $45,000. The pres also requires an intial investment in spare parts inventory of $20,000 alkng with an additional $3100 in inventory for each succeeding year...
Masters Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $787,200 is estimated to result in $262,400 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 $114,800. The press also requires an initial investment in spare parts inventory of $32,800, along with an additional $4,920 in inventory for each succeeding year...
Masters Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $455,000 is estimated to result in $187,000 in annual pretax cost savings. The press falls in the MACRS five-year class, and it will have a salvage value at the end of the project of $75,000. The press also requires an initial investment in spare parts inventory of $34,000, along with an additional $3,800 in inventory for each succeeding year of the...
Masters Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $1,046,400 is estimated to result in $348,800 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 $15 The press also requires an initial investment in spare parts inventory of $43,600, along with an additional $6,540 in inventory for each succeeding year...
Masters Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $385,000 is estimated to result in $145,000 in annual pretax cost savings. The press falls in the MACRS five-year class, and it will have a salvage value at the end of the project of $45,000. The press also requires an initial investment in spare parts inventory of $20,000, along with an additional $3,100 in inventory for each succeeding year of the...