7. Complete the last four columns of the table below using an effective tax rate of 40% for an asset that has a first cost of $20,000 and a 3-year recovery period with no salvage value, using (a) straight line depreciation and (b) MACRS depreciation. All cash flows are in $1000 units. Estimates, $ Year GI P OE DI Taxes CFAT 0 -20 -20 1 8 -2. 2 15 |-4 3 -3 4 10 12 8. In planning a plant expansion, Medimmune has an economic decision to make- upgrade the existing controlled-environment rooms or purchase new ones. The presently owned ones were purchased 4 years ago for $250,000. They have a current "quick sale" value of $20,000, but for an investment of $100,000 now, they would be adequate for another 4 years, after which they would be sold for $40,000. Alternatively, new controlled-environment rooms could be purchased at a cost of $270,000. They are expected to have a 10-year life with a $50,000 salvage value at that time. Determine whether the company should upgrade or replace. Use a MARR of 20% per year