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A firm has an opportunity to invest in a new device that will replace two of the firm’s older machines. The new device costs $540,000 and requires an additional outlay of $10,000 to cover installation and shipping. The new device will cause the firm to increase its net working capital by $30,000. Both of the old machines can be sold—the first for $100,000 (book value equals $95,000) and the second for $150,000 (book value equals $140,000). The original cost of the first machine was $200,000, and the original cost of the second machine was $140,000. The firm’s marginal tax bracket is 40 percent. Compute the net investment for this project. Round your answer to the nearest dollar.
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