Question: Santa s Helpers Inc. is considering a six - year project to improve its toy production efficiency. Buying a new toy - soldier assembly machine

Santas Helpers Inc. is considering a six-year project to improve its toy production efficiency. Buying a new toy-soldier assembly machine for $500,000 is estimated to result in $135,000 in annual pre-tax cost savings. The machine has a CCA rate of 30% per year, and it will have a salvage value of $50,000 at the end of the project. The machine also requires an initial investment in inventory of $20,000, which will be recovered at the end of the project. If the tax rate is 40% and the discount rate is 10%, what is the NPV of the machine purchase?
A)-$4,285 B) $7,004 C) $53,941 D) $107,473 E) None of the above

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