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N&N Inc., a local food processing company, is
considering an opportunity to upgrade its current packaging machine
for the next five years.

The existing machine was purchased five years ago for $60,000
and can be sold now for $30,000. Its resale value in five years
will be $5,000. The purchase price for the new machine will be
$110,000. In addition, the vendor of the new machine will charge
$10,000 for shipping and installation. The resale value of the new
machine in five years will be $20,000. Additional inventories
of $5,000 will be required when the new machine is in use, but the
inventories can be restored to the current level at the end of five
years. Both machines belong to a class with a CCA rate of 30
percent. N&N’s tax rate is 35% and the cost of capital is
estimated to be 20%. N&N estimates that the new machine will
reduce operating expenses by $35,000 per year for five
years. The new machine will be financed by a bank loan and
interest payments for the loan are estimated to be 2,000 every

The NPV of the replacement project is ?

Answer rounding to the nearest integer (ZERO
decimals), do not include any symbols, like dollar signs ($)
percentage signs (%) or thousand separators (,). If solution is a
negative number include a – sing before the number whiteout any
space. For example : -1152


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