Tanaka Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $520,000 is estimated to result in $215,000 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 $87,000. Refer to Table 8.3. The press also requires an initial investment in spare parts inventory of $25,000, along with an additional $3,000 in inventory for each succeeding year of the project. The shops tax rate is 25 percent and the project's required return is 10 percent. Calculate the NPV of this project.
Table 8.3 Depreciation under Modified Accelerated Cost Recovery System (MACRS)
Year	Recovery Period Class
3 Years	5 Years	7 Years	10 Years	15 Years	20 Years
1	0.3333	0.2	0.1429	0.1	0.05	0.0375
2	0.4445	0.32	0.2449	0.18	0.095	0.07219
3	0.1481	0.192	0.1749	0.144	0.0855	0.06677
4	0.0741	0.1152	0.1249	0.1152	0.077	0.06177
5		0.1152	0.0893	0.0922	0.0693	0.05713
6		0.0576	0.0892	0.0737	0.0623	0.05285
7			0.0893	0.0655	0.059	0.04888
8			0.0446	0.0655	0.059	0.04522
9				0.0656	0.0591	0.04462
10				0.0655	0.059	0.04461
11				0.0328	0.0591	0.04462
12					0.059	0.04461
13					0.0591	0.04462
14					0.059	0.04461
15					0.0591	0.04462
16					0.0295	0.04461
17						0.04462
18						0.04461
19						0.04462
20						0.04461
21						0.02231