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Lowell Company is considering adding a robotic paint sprayer to the production line. The prayer s base price is $ 1 0 0 , 0

Lowell Company is considering adding a robotic paint sprayer to the production line. The prayers base price is $100,000, and it would cost another $10,000 to install it. The machine falls into the MACRS 3-year class, and it would be sold after 3 years for $36,000. The MACRS rates for the first three years are 33%,45%, and 15%. The machine would require and, increase in net working capital of $7,200. The sprayer would not change revenues, but it is expected to save the firm $40,000 per year in before tax operating costs, mainly labor. Lowells marginal tax rate (federal plus state) is 25%. If the projects cost of capital is 6%, what is the Net Salvage Value?
$28,925
$26,675
$32,325
$24,425

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