Your firm purchased the current machine it uses to manufacture widgets 3 years ago. The machine cost $640,000 at that time. Today the machine is worth $265,000. The machine could be operated for another 7 years. 7 years from now the old machine will be worth $65,000. The old machine machine generates revenues of $600,000 per year. The old machine has operating costs of $390,000 per year. The firm has a current investment in operating net working capital of $51,000.

The firm is thinking about buying a new machine to replace the old machine. The new machine will cost $1,182,000. The new machine can be operated of 7 years. 7 years from now the new machine will have a salvage value of $165,000. The new machine will generate revenues of $882,000 per year. The new machine will have operating costs of $476,000. The new machine requires an investment in operating net working capital of $111,000.

The tax rate is 35.0%. The CCA rate is 23%. The required rate of return is 7.4%.

What is the incremental capital cost?

Your answer should be correct to two decimal places. Note if your answer is 105,200 it must be shown as 105,200.00