Calculating initial investment Vastine Medical Inc. is considering replacing its existing computer system, which was purchased 3 years ago at a cost of $332,000. The system can be sold today for $199,000. It is being depreciated using MACRS and a 5-year recovery period (see the table ). A new computer system will cost $493,000 to purchase and install. Replacement of the computer system would not involve any change in net working capital. Assume a 40% tax rate 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 $199,000. c. Calculate the initial investment associated with the replacement project. a. The remaining book value is $ . (Round to the nearest dollar) b. The after-tax proceeds will be $_]. (Round to the nearest dollar.) c. The initial investment will be $ (Round to the nearest dollar.) (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) 3 years 10 years Rounded Depreciation Percentages by Recovery Year Using MACRS for First Four Property Classes Percentage by recovery year Recovery year 5 years 7 years 1 33% 20% 14% 10% 2 45% 32% 25% 18% 3 15% 19% 18% 14% 7% 12% 12% 12% 12% 9% 6 5% 9% 8% 7 9% 7% 4% 6% 6% 6% 4% 100% 100% 100% 100% *These percentages have been rounded to the nearest whole percent to simplify calculations while and Tantalate An abunden anlatan 4 5 9% 8 9 10 11 Totals