Purple haze machine shop is considering a four-year project, Ask an Expert

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Purple Haze Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $521645 is estimated to result in some amount of annual pretax cost savings. The press will have an aftertax salvage value at the end of the project of $86171. The OCFs of the project during the 4 years are $172648, $191855, $171074 and $168674, respectively. The press also requires an initial investment in spare parts inventory of $25569, along with an additional $2370 in inventory for each succeeding year of the project. The shop's discount rate is 7 percent. What is the NPV for this project?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92865634

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