Printing World thinks it may need a new colour printing press. The press will cost $540,000 but will substantially reduce annual operating costs by $216,000 a year, before tax. The press has a 30% CCA rate and will be in its own asset pool. The first CCA deduction is made in year 0. The press will operate for 4 years and then be worthless. The cost of equity for Printing World is 10%, the cost of debt is 9%, and the company’s target debt-equity ratio is 0.50. The company’s tax rate is 30%. a. What is the NPV of buying the press?.

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