6 Chec 14.28 points eBook Hint Problem 6-13 Cost-Cutting Proposals Tanaka Machine Shop is considering a 4-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 5-year MACRS 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 the project. The shop's tax rate is 21 percent and its discount rate is 8 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.) References NPV Should the company buy and install the machine press? Yes No Table 6.3 Depreciation under Modified Accelerated Cost Recovery System (MACRS) Recovery Period Class Year 3 Years 5 Years 7 Years 10 Years 15 Years. 20 Years 1 .3333 .2000 .1429 .1000 .0500 .03750 2 .4445 .3200 .2449 .1800 .0950 .07219 3 .1481 .1920 .1749 .1440 .0855 .06677 4 .0741 .1152 .1249 .1152 .0770 .06177 5 .1152 .0893 .0922 .0693 .05713 6 .0576 .0892 .0737 .0623 .05285 7 .0893 .0655 .0590 .04888 8 .0446 .0655 .0590 .04522 9 .0656 .0591 10 .04462 .0655 11 .0590 .04461 .0328 12 .0591 .04462 13 .0590 .04461 14 .0591 .04462 15 .0590 .04461 16 .0591 04462 17 0295 .04461 18 19 .04462 20 .04461 21 .04462 the IRS assumarsh. Depreciate Property. Details of depreciation are Depreciation is expressed as a percentage of the asset's initial cost. These schedule .04461 .02231