Calculating initial investment Vastine Medical, Inc., is considering replacing its existing computer system, which was purchased 3 years ago at a cost of $334,000. The system can be sold today for $201,000. It is being depreciated using MACRS and a 5-year recovery period (see the table :). A new computer system will cost $510,000 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 $201,000. 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.) Rounded Depreciation Percentages by Recovery Year Using MACRS for First Four Property Classes Percentage by recovery year* Recovery year 3 years 5 years 7 years 33% 20% 14% 45% 32% 25% 15% 19% 18% 7% 12% 12% 12% 9% 9% OOO OO AWN- 10 years 10% 18% 14% 12% 9% 8% 5% 9% 7% 1% 6% 6% 6% 11 4% Totals 100% 100% 100% 100% *These percentages have been rounded to the nearest whole percent to simplify calculations while