Salvage value or new investment in net working capital

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Reference no: EM131558971

Winch Machine shop is considering a 4 year project to improve its production efficiency. Buying a new machine press for $225000 is estimated to result in $50,000 in annual pretax cost saving s. You'll depreciate the $225,000 straight line to zero over the project's life. Assume there is no salvage value or new investment in net working capital. If the shop's tax rate is 40% and its discount rate is 10%, what is the NPV of the project?

Reference no: EM131558971

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