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Luxury Car Corp is considering a four-year project to improve its production efficiency. Buying a new machine press for $237,600 is estimated to result in
Luxury Car Corp is considering a four-year project to improve its production efficiency. Buying a new machine press for $237,600 is estimated to result in $179,200 in annual pretax cost savings. The new machine will be depreciated in straight line basis and it will have a salvage value at the end of the project of $78,400 (before taxes). The press also requires an initial investment in net working capital of $28,400. If the shop's tax rate is 34 percent and its discount rate is 19 percent, what is the NPV for this project?
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