You are considering replacing a machine in your factory. The

current machine cost $$2,500,000$ seven years ago. It is being

depreciated for tax purposes on a straight$-$line basis over its ten

year life. The old machine can be sold today for $$400,000$ or be

worthless in three years. The new machine would cost $$2,800,000$ and

it would depreciate straight line to zero over three years. If the

new machine is purchased, it would be operated for three years and

then sold for $$130,000.$ You are considering the new machine because

it would result in labor savings of $$900,000$ per year. If you

purchase the new machine, net working capital requirements will

increase by $$100,000$ because of the need for additional spare

parts. If your tax rate is $30\%$ and your cost of capital is $8\%$ per

year, what is the net present value of purchasing the new machine,

in thousands of dollars?$$