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Tanaka Machine Shop is considering a four - year project to improve its production efficiency. Buying a new machine press for $ 4 2 9

Tanaka Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine
press for $429,000 is estimated to result in $161,000 in annual pretax cost savings. The press falls in the MACRS five-
year class (MACRS schedule) and it will have a salvage value at the end of the project of $62,000. The press also
requires an initial investment in spare parts inventory of $16,700. along with an additional $3,700 in inventory for
each succeeding year of the project. The shop's tax rate is 22 percent and its discount rate is 9 percent. Calculate the
project's NPV.
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