Idlewood Production Company Would Like to Purchase a Production Machine

Idlewood Production Company would like to purchase a production machine for $450,000.The machine is expected to have a life of four years,and a salvage value of $50,000.Annual maintenance costs will total $12,500.Annual savings are predicted to be $175,000.The company's required rate of return is 12 percent.
$$\begin{array}{l}\text { Factors: Present Value of } \$ 1\quad\text { Factors: Present Value of an Annuity }\\\begin{array} { c c c c } & ( r = 12 \% ) &\quad\quad\quad\quad\quad\quad\quad{ ( r = 12 \% ) } \\\hline \text { Year 0 } & 1.0000 & & \\\text { Year 1 } & 0.8929 & \text { Year 1 } & 0.8929 \\\text { Year 2 } & 0.7972 & \text { Year 2 } & 1.6901 \\\text { Year 3 } & 0.7118 & \text { Year 3 } & 2.4018 \\\text { Year 4 } & 0.6355 & \text { Year 4 } & 3.0373\end{array}\end{array}$$
(1)Calculate the net present value of this investment (ignore income taxes).Round all calculations to the nearest dollar.
(2)Based on your answer in requirement 1,should Idlewood purchase the production machine?