Purple Haze Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $510,000 is estimated to result in $210,000 in annual pretax cost savings. The press falls in the MACRS five-year class, and it will have a salvage value at the end of the project of $86,000. The press also requires an initial investment in spare parts inventory of $24,000, along with an additional $2,900 in inventory for each succeeding year of the project. The shops tax rate is 30 percent and its discount rate is 8 percent. Refer to Table 10.7.

Calculate the NPV of this project.

percentage table 10.7:

1. 20%

2. 32

3. 19.2

4. 11.52

5. 11.52

6. 5.76

The NPV is not 258066.65