Management of Winters Company is planning to purchase a new tooling machine with a payback period estimated to be eight years. Straight-line depreciation of $2,500 will be expensed each year of the payback period. Cash flow from operations, net of income taxes, for years 1 to 3 will be $4,000 and will then decrease by $500 from the previous year for each of the remaining years.

Required:

Determine the cost of the tooling machine.