Calculating initial investment Dupree Coffee Roasters, Inc., wishes to expand and modernize its facilities. The installed cost of a proposed computer-controlled automatic-feed roaster will be $140,000. The firm has a chance to sell its 4-year-old roaster for $35,900. The existing roaster originally cost $59,700 and was being depreciated straight-line over 7 years. DuPree pays taxes at a rate of 40%. a. What is the book value of the existing roaster? b. Calculate the after-tax proceeds of the sale of the existing roaster. c. Calculate the change in net working capital using the following figures: Anticipated Changes in Current Assets and Current Liabilities Accruals - $19,100 Inventory +49,400 Accounts payable + 40,800 Accounts receivable + 70,100 Cash 0 Notes payable + 16,000 d. Calculate the initial investment associated with the proposed new roaster. a. The remaining book value of the existing roaster is $. (Round to the nearest dollar.) b. The after-tax proceeds of the sale of the existing roaster will be $|| (Round to the nearest dollar.) Instructor Tip c. The change in net working capital will be $ . (Round to the nearest dollar.) d. The initial investment associated with the proposed new roaster will be $1. (Round to the nearest dollar.) 1.Note based on its age, how long the existing roaster has been depreciated. 2)After tax proceeds = sale proceeds less the tax on the sale. The tax on the sale = sale proceeds less net book value times the tax rate. 3)"Accruals" are liabilities. An increase in a current asset or decrease in a current liability is a cash outflow. Close