Geary Machine Shop is considering a four - year project to improve its production efficiency. Buying a
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Question:
Geary 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 will be depreciated straightline to zero $ per year and it will have a salvage value at the end of the project of $ 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. If the shops tax rate is and its discount rate is what is the NPV of this project?
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