Four-year project to improve its production efficiency

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Purple Haze Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $533711 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 $87895. The OCFs of the project during the 4 years are $173478, $194157, $176302 and $166789, respectively. The press also requires an initial investment in spare parts inventory of $20298, along with an additional $1550 in inventory for each succeeding year of the project. The shop's discount rate is 8 percent. What is the NPV for this project?

Reference no: EM13923883

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