Masters Machine Shop is considering a four$-$year project to improve its production

efficiency. Buying a new machine press for $$604,800$ is estimated to result in $$201,600$

points

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in annual pretax cost savings. The press falls in the MACRS five$-$year class

$($MACRS Table$),$ and it will have a salvage value at the end of the project of $$88,200.$ The

press also requires an initial investment in spare parts inventory of $$25,200,$ along with

an additional $$3,780$ in inventory for each succeeding year of the project.

If the shop's tax rate is $24$ percent and its discount rate is $20$ percent, what is the NPV for

this project?

Multiple Choice