On July 23, 2008, Consolidated Parcel Service (CPS) acquired a new de-icing machine for use at its facility at Chicago’s O'Hare airport. The machine is used to de-ice the wings of the firm's aircraft in winter months. The machine's invoice price was \($15,000,000\). The seller offered CPS a 2% cash discount on the gross invoice price if CPS paid for the machine by August 1, 2008.
The cost to ship the machine from the seller’s warehouse was \($15,000\) and was paid by CPS. Insurance during transport amounted to \($5,000\), also paid by CPS. Many CPS employees were involved with the assembly and testing of the machine. Their wages totaled \($20,000\). As part of testing the machine, \($35,000\) worth of de-icing fluid was used to ensure that the machine operated properly. During testing, one of CPS’s cargo planes was inadvertently damaged. The cost to repair the aircraft (not covered by insurance) amounted to \($250,000\). As a result of the damaged aircraft being out of service while it was being repaired, CPS lost \($750,000\) in revenue.
Finally, because the machine was larger than the previous one, CPS had to erect a new storage facility. The cost of doing so was \($75,000\) for materials, \($25,000\) for labor, and \($5,000\) for salaries of the supervisory personnel who directed the construction.
Required:
Assuming that CPS paid for the machine on July 29, 2008, determine the capitalizable cost of the machine to CPS.