Transcribed Image Text
Problem 9-21 Cost-Cutting Proposals [LO 2] CSM Machine Shop isconsidering a four-year project to improve its productionefficiency. Buying a new machine press for $491,000 is estimated toresult in $190,000 in annual pretax cost savings. The press fallsin the MACRS five-year class (MACRS Table), and it will have asalvage value at the end of the project of $58,000. The press alsorequires an initial investment in spare parts inventory of $21,600,along with an additional $3,600 in inventory for each succeedingyear of the project. The shop’s tax rate is 40 percent and itsdiscount rate is 10 percent. Calculate the NPV. (Do not roundintermediate calculations and round your answer to 2 decimalplaces, e.g., 32.16.) Net present value $