The Campbell Company is considering adding a robotic paint sprayer to its production line. The sprayer's base price is $1,500,000, and it would cost another $40,000 to install it.The machine falls into the MACRS 3-year class, and it would be sold after 3 years for $750,000. The MACRS rates for the first three years are 0.3333, 0.4445, and 0.1481. The machine would require an increase in net working capital (inventory) of $20,000.The sprayer would not change revenues, but it is expected to save the firm $500,000 per year in before-tax operating costs, mainly labor. Campbell's marginal tax rate is 21%.

What is the after-tax salvage value of the machinery?

$750,000

$592,500

$450,000

$396,856

$616,464