Cushing 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 $19,000; it was being depreciated under MACRS using a 5-year recovery period (See the table below for percentages). The existing machine is expected to have a usable life of at least 5 more years. The new machine costs $34,300 and requires $5,400 in installation costs; it will be depreciated using a 5-year recovery period under MACRS. The existing machine can currently be sold for $24,600 without incurring any removal or cleanup costs. The firm is subject to a 21% tax rate. Calculate the initial cash flow associated with the proposed purchase of a new grading machine.

Total cost of the new machine: $ Blank 1. Fill in the blank, read surrounding text.

Book Value of old asset: $ Blank 2. Fill in the blank, read surrounding text.

Tax on the sale of old asset: $ Blank 3. Fill in the blank, read surrounding text.

After tax proceeds from the old asset: $ Blank 4. Fill in the blank, read surrounding text.

Initial Investment: $ Blank 5. Fill in the blank, read surrounding text.

MACRS
Recovery Year	5 Years
1	20%
2	32%
3	19%
4	12%
5	12%
6	5%