Question: Your firm is considering purchasing a new machine. The machine costs $2,350,000. The machine could be operated for 3 years at which time it could

Your firm is considering purchasing a new machine. The machine costs $2,350,000. The machine could be operated for 3 years at which time it could be sold for $350,000. The new machine will not generate any additional revenues for the company. However the new machine would reduce (decrease) annual operating costs by $380,000 per year.

The project's required rate of return is 9.0%. The tax rate is 44.5%. The CCA rate is 32%.

What is the present value of the operating cash flow in the list approach?

Your answer should be correct to two decimal places.

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