Should it buy and install the machine press

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Question: Buying a new machine press for $560,000 is estimated to result in$150,000 in annual pre-tax cost savings. The press falls into Class 8 for CCA purposes (CCA rate of 20% per year),and it will have a salvage value at the end of the project of $55,000. The press also requires an initial investment in spare parts inventory of $20,000, along with an additional $3,100 in inventory for each succeeding year of the projects. If the company's tax rate is 35% and its discount rate is 9%, should it buy and install the machine press?(1pts) Show your work (8pts )and explain why(1pts).

Reference no: EM133342642

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