Caradoc Machine Shop is considering a four-year project to improve its production efficiency. Buying a...
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Caradoc Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $421,000 is estimated to result in $161,000 in annual pre-tax cost savings. The press falls into Class 8 for CCA purposes (CCA rate of 20% per year), and it will have a salvage value at the end of the project of $56,100. The press also requires an initial investment in spare parts inventory of $31,000, along with an additional $4,200 in inventory for each succeeding year of the project. If the shops tax rate is 35% and its discount rate is 9%.
Calculate the NPV of this project.
Round the final answer to 2 decimal places
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