Salvage value at the end of the project

Reference no: EM131350681

CSM Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $489,000 is estimated to result in $188,000 in annual pretax cost savings. The press falls in the MACRS five-year class (MACRS Table), and it will have a salvage value at the end of the project of $57,000. The press also requires an initial investment in spare parts inventory of $21,400, along with an additional $3,400 in inventory for each succeeding year of the project. The shop’s tax rate is 30 percent and its discount rate is 12 percent. Calculate the NPV.

Reference no: EM131350681

Questions Cloud

Chances of risk events occurring : The chances of risk events occurring and their respective costs increasing change over the project life cycle. What is the significance of this phenomenon to a project manager?

What if the descendants of the ring come forward : A 10 karat emerald ring was found on a sunken ship from the year 1622 by divers off the coast of Florida. The ship sank due to a hurricane. The ring is valued at $500,000. What sort of property is the ring? Lost, abandoned, or mislaid? Why? Who owns ..

Carefully evaluate solutions before implementing : Do you always carefully evaluate a solution before implementing? At work or at home do you carefully evaluate solutions before implementing

Produce a credit memorandum : Produce a credit memorandum (credit approval report) to seek approval from your credit manager for the request from the client in the following scenario.

Salvage value at the end of the project : CSM Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $489,000 is estimated to result in $188,000 in annual pretax cost savings. The press falls in the MACRS five-year class (MACRS Ta..

What is sampling and why do we need sampling : What is sampling and why do we need sampling? What are the common sampling methods? Could you provide a real world example to illustrate which method is more appropriate to choose in reality? What are your criteria?

Consider the apple watch series 2 : Consider the Apple Watch Series 2 (picture shown above). The users of iPhones have a choice of interacting with an Apple Watch (assuming the user owns both) to perform some tasks where they have a choice of using the iPhone or the Apple Watch.

Describing and justifying a high-level project management : Describing and justifying a high-level project management methodology that could be applied to a project from a selected case study.

How does the depiction of women change : In a well constructed essay, address the issue of the treatment and view of women within American Literature from 1865-onward. How does the depiction of women change? What issues arise? Give at least three examples from the text reads in class

User Account

All Pages