Geller Machine Shop is considering a four$-$year project to improve its productionDepreciation is expressed as a percent of the asset's cost. These schedules are based on the IRS publication $946.$ How to Depreciate Property

and other details on depreciation are presented later in the chapter. Note that five$-$year depreciation actually carries over six years because the

IRS assumes purchase is made in midyear.

efficiency. Buying a new machine press for $$540,000$ is estimated to result in $$225,000$

in annual pretax cost savings. The press falls in the MACRS five$-$year class, and it will

have a salvage value at the end of the project of $$91,000.$ The press also requires an

initial investment in spare parts inventory of $$27,000,$ along with an additional $$3,200$ in

inventory for each succeeding year of the project. The shop's tax rate is $22$ percent and

the project's required return is $8$ percent. Refer to Table $8\mathrm{.}3.$

Calculate the NPV of this project. $($Do not round intermediate calculations and round

your answer to $2$ decimal places, e$.$g$.,32\mathrm{.}16.)$

NPV

$

$585,471\mathrm{.}40$