Optimistic Company is evaluating the purchase of a new machine that costs $$720,000,$ will have a CCA rate of $20\%,$ an estimated useful life of $10$ years and a $$30,000$ terminal disposal price. This piece of equipment would need a major overhaul at the end of $7$ years that is expected to cost $$40,000.$ Also, if this machine is purchased there will be a required increase in working capital of $$60,000.$ This entire amount will be released at the end of the machine's useful life. The company's marginal tax rate is $32\%.$ It is estimated that the machine will increase before tax profits by $$220,000$ annually. Optimistic Company requires a $16\%$ after tax rate of return. Based on the above information, calculate the net present value of this option.

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Multiple Choice

$$78,334$

$$67,263$

$$89,447$

$$67,439$

None of the above