Crush Corporation is considering the purchase of a new grading machine to replace the existing one. The existing machine was purchased 4 years ago at an installed cost of $19,900; it was being depreciated under MACRS using a5-year recovery period.(See table for the applicable depreciationpercentages.) The existing machine is expected to have a usable life of at least 5 more years. The new machine costs $34,100 and requires $4,600 in installationcosts; it will be depreciated using a5-year recovery period under MACRS. The existing machine can currently be sold for $24,800 without incurring any removal or cleanup costs. The firm is subject to a 40% tax rate. Calculate the initial investment associated with the proposed purchase of a new grading machine.

Table:

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 10 years

1 33% 20% 14% 10%

2 45% 32% 25% 18%

3 15% 19% 18% 14%

4 7% 12% 12% 12%

5 12% 9% 9%

6 5% 9% 8%

7 9% 7%

8 4% 6%

9 6%

10 6%

11 4%

Totals 100% 100% 100% 100%

The initial investment will be $_____?

All the information is there.