Rooney, Incorporated is considering the purchase of a new machine costing $640,000. The machine's useful life is expected to be 8 years with no salvage value. The straight-line depreciation method will be used. The net increase in annual after-tax cash flow is expected to be $147,000. Rooney estimates its cost of capital to be 14%. (The present value of a $1 annuity for 8 years at 14% is 4.639, and the present value of $1 to be received in 8 years is 0.351.)

The net present value of the investment in the machine under consideration is