Alpha Beta Company, Inc., a manufacturer of toys, is considering replacing an existing piece of equipment with a more sophisticated machine. The firm pays $40$ percent taxes on ordinary income and capital gains. Given the following information, calculate the initial investment required for the new asset.

Existing Machine

Cost $=22362$

Purchased $2$ years ago

Depreciation using the straight$-$line method $(20\%$ depreciation each year$)$

Useful life $=5$ years

Current market value $=36184$

Annual cash flows $=$ $$10,000$

Proposed$/$new Machine

Cost $=66804$

Installation $=17661$

Depreciation using the straight$-$line method $(20\%$ depreciation each year$)$

Useful life $=5$ years

Annual cash flows $=$ $$20,000$