our firm is considering purchasing a new machine. The machine costs $2,675,000. The machine could be operated for 9 years at which time it could be sold for $495,000. The new machine will not generate any additional revenues for the company.However the new machine would reduce (decrease) annual operating costs by $470,000 per year.

The project's required rate of return is 10.8%. The tax rate is 29.0%. The CCA rate is 34%.

What is the present value of the operating cash flow in the list approach?