Four-year project to improve production efficiency

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Reference no: EM132028830

Purple Haze Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $513115 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 $85560. The OCFs of the project during the 4 years are $174596, $194278, $171031 and $169758, respectively. The press also requires an initial investment in spare parts inventory of $23704, along with an additional $2673 in inventory for each succeeding year of the project. The shop's discount rate is 7 percent. What is the NPV for this project?

Reference no: EM132028830

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