at a cost of Calculating initial investment Vastine Medical, Inc., is considering replacing its existing computer system, which was purchased 2 years ago $318,000. The system can be sold today for $198,000. It is being depreciated using MACRS and a 5-year recovery period (see the table | A new computer- system will cost $494,000 to purchase and install. Replacement of the computer system would not involve any change in net working capital. Assume a 40% tax r on ordinary income and capital gains a. Calculate the book value of the existing computer system b. Calculate the after-tax proceeds of its sale for $198,000 c. Calculate the initial investment associated with the replacement project 4 a. The remaining book value is $92220] (Round to the nearest dollar) b. The after-tax proceeds will be $ 155688 (Round to the nearest dollar) c. The initial investment will be $ 338312 (Round to the nearest dollar.) nal Data table ume I mit t Recovery year 3 years 5 years 1 33% 20% maini ter-tax 10 tial in 234567829 45% 32% ng in The ll cos ry inc te the ate th ate the (Click on the icon here in order to copy the contents of the data table below into a spreadsheet) Rounded Depreciation Percentages by Recovery Year Using MACRS for First Four Property Classes ost of Percentage by recovery year compu a 40% 7 years 10 years 14% 10% 25% 18% 15% 19% 18% 14% 7% 12% 12% 12% 12% 9% 9% 5% 9% 8% 9% 7% 4% 6% 6% 6% Print Done