1. Abernathy enterprises is considering replacing the existing press with a more efficient press. The new press costs $65,000 and requires $15,000 in installation costs. The old press was purchased 4 years ago for an installed cost of $35,000 and can be sold for $20,000 net of any removal coats today. The new press will increase revenue by $30,000 and cut costs by $10,000. Both presses are depreciated under the MACRS 5-62-: recovery schedule. The firm is in 40% marginal rate. The depreciation rates for the assets under MACRS are as follows: 20% for year 1, 32% for year 2, 19% for year 3, 12% for year 4, 2% for year 5, and 5% for year 6. A). Calculate the book value of the asset being replaced. B). Calculate the tax effect of the sake of old machine in calculating initial investment. If tax effect results in inflow, input number as positive. If it results in a tax payment outflow, input as negative. C). Calculate the initial investment. Input the net cash outflow as a positive number.