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Starset Machine Shop is considering a 4-year project to improve its production efficiency. Buying a new...

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Finance

Starset Machine Shop is considering a 4-year project to improveits production efficiency. Buying a new machine press for $445,000is estimated to result in $181,000 in annual pretax cost savings.The press qualifies for 100 percent bonus depreciation, and it willhave a salvage value at the end of the project of $73,000. Thepress also requires an initial investment in spare parts inventoryof $32,000, along with an additional $3,700 in inventory for eachsucceeding year of the project. The shop’s tax rate is 22 percentand its discount rate is 11 percent.

Calculate the NPV of this project. (Do not roundintermediate calculations and round your answer to 2 decimalplaces, e.g., 32.16.)

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