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A bottle filling machine costs $1,200,000. This cost could be depreciated at 30% per year (Class 43). The monitor would actually be worth $100,000 in

A bottle filling machine costs $1,200,000. This cost could be depreciated at 30% per year (Class 43). The monitor would actually be worth $100,000 in seven years. The new bottle filling machine would save $356,000 per year before taxes and operating costs. Suppose the new monitor requires us to increase net working capital by $47,200 when we buy it. If we require a 15% return, what is the NPV of the purchase? Assume a tax rate of 40%.

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