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Tanaka Machine Shop is considering a four-yeat project to improve its production efficiency. Buying a new machine press for $427000 is estimated to result in
Tanaka Machine Shop is considering a four-yeat project to improve its production efficiency. Buying a new machine press for $427000 is estimated to result in $160,000 in annual pretax cost savings. The press falls in the MACRS five-year class (MACRS schedicic) and it will have a salvage value at the end of the project of $61.000. The press aiso requires an initial investment in spare paits inventory of $16,600, along with an additional $3,600 in inventory for each succeeding year of the project. The shop's tak rate is 21 percint and its discount rate is 8 percent. Calculate the project's NPV. Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.9., 32.16. Table 9.7 Modified ACRS depreciation allowances
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