Cleveland Manufacturing is considering a new machine that costs $230,000 and would reduce pretax manufacturing costs by $90,000 annually. Holmes would use the 3-year MACRS method to depreciate the machine, and management thinks the machine would have a value of $26,000 at the end of its 5-year operating life. The applicable depreciation rates are 33%, 45%, 15%, and 7%. Net operating working capital would increase by $24,000 initially, but it would be recovered at the end of the project's 5-year life. Drake's marginal tax rate is 40%, and a 12% WACC is appropriate for the project.

A. What is the project's NPV? $Blank 1

B. Assume management is unsure about the $90,000 cost savings-this figure could deviate by as much as plus or minus 20%. What would the NPV be under each of these situations? Round your answers to the nearest cent. Negative amount should be indicated by a minus sign.

The NPV of a 20% savings increase is equal to $Blank 2.

The NPV of a 20% savings decrease is equal to $Blank 3.