Calculating initial investment Vastine Medical, Inc. is considering replacing its existing computer system, which was purchased 3 years ago at a cost of $325,000 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 $496,000 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) First Four Property Classes Recovery year 1 Percentage by recovery year 5 years 7 years 3 years 14% 20% 33% 45% 32% 25% 15% 19% 18% 12% 7% 12% 12% 9% 5% 9% 9% 4% 11 100% 100% Totals 100% These percentages have been rounded to the nearest whole percent to simplify calculations while collom. To antondain the inter Done 2345 6 7 8 1060 9 10 10 years 10% 18% 14% 12% *********** 9% 8% 7% 6% 6% 6% 4% 100% ost of computer a 40% ta