Purple Haze Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $490,000 is estimated to result in $200,000 in annual pretax cost savings. The press falls in the MACRS five-year class, and it will have a salvage value at the end of the project of $82,000. The press also requires an initial investment in spare parts inventory of $22,000, along with an additional $2,700 in inventory for each succeeding year of the project. The shop’s tax rate is 34 percent and its discount rate is 10 percent. Refer to Table 10.7 (MACRS table).