Four-year project to improve its production efficiency

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Reference no: EM132029102

Purple Haze Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $487773 is estimated to result in some amount of annual pretax cost savings. The press will have an aftertax salvage value at the end of the project of $87021. The OCFs of the project during the 4 years are $175466, $194666, $170962 and $161843, respectively. The press also requires an initial investment in spare parts inventory of $20563, along with an additional $3114 in inventory for each succeeding year of the project. The shop's discount rate is 10 percent. What is the NPV for this project?

Reference no: EM132029102

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