Geary Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $700,800 is estimated to result in $233,600 in annual pretax cost savings. The press falls in the MACRS five-year class (MACRS Table), and it will have a salvage value at the end of the project of $102,200. The press also requires an initial investment in spare parts inventory of $29,200, along with an additional $4,380 in inventory for each succeeding year of the project.
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