Polyplast is considering purchasing an injection-molding machine for $500,000. This machine will, before considering taxes and depreciation,

Question:

Polyplast is considering purchasing an injection-molding machine for $500,000. This machine will, before considering taxes and depreciation, reduce costs by $108,000 per year. Polyplast's tax rate is 30%, and the machine will not have any at the end of its 10 year useful life. (Assume straight-line depreciation for tax purposes and a of 12%; further assume that the purchase price is paid now and that all other cash flows occur at year end).
Required:
What is the NPV from purchasing the machine?
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