Tanaka Machine Shop is considering a four - year project to improve its production efficiency. Buying a
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Question:
Tanaka Machine Shop is considering a fouryear project to improve its production efficiency. Buying a new machine press for $ is estimated to result in $ in annual pretax cost savings. The press falls in the MACRS fiveyear class, and it will have a salvage value at the end of the project of $ Refer to Table The press also requires an initial investment in spare parts inventory of $ along with an additional $ in inventory for each succeeding year of the project. The shops tax rate is percent and the project's required return is percent. Calculate the NPV of this project.
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