Calculating initial investment Vasline Medical, Inc, in considering replacing its existing computer system, which was purchased 2 years ago at a cost of $320.000 The system can be sold today for $182,000 in being depreciated using MACRS and a 5-year recovery period (sce the table ) Anew computer system will cost $522.000 to purchase and instalt Replacement of the computer system would not involve any change in networking capital Assume a 30% tax rate on ordinary income and capital gains a. Calculate the after-tax proceeds of its sale for $102,000 b. Calculate the initial investment associated with the replacement project a. The after-tax proceeds will be $ (Round to the nearest dollar) b. The initial investment will be (Roond to the nearest dolar) dic VE co fo W d to Rounded Depreciation Percentages by Recovery Year Using MACRS for First Four Property Classes Percentage by recovery year 10 years 7 years Recovery year 5 years 3 years 10% 14% 1 20% 33% 25% 18% 2 32% 45% 14% 18% 15% 19% 12% 7% 12% 12% 9% 9% 12% 8% 9% 6 5% 9% 7% 4% 6% 8 6% 9 6% 10 4% 11 100% 100% 100% Totals 100% "These percentages have been rounded to the nearest whole percent to simplify calculations while retaining realism. To calculate the actual depreciation for tax purposes, be sure to apply the actual unrounded percentages or directly apply double-declining balance (200%) depreciation using the half-year 3 4 5 0