Degnan Dance Company, Inc., a manufacturer of dance and exercise apparel, is considering replacing an existing piece of equipment with a more sophisticated machine. The following information is given. Existing Machine Cost = $100,000 Purchased 2 years ago Depreciation using MACRS Over a 5-year recover schedule Current market value = $105,000 Five year usable life remaining Facts Proposed Machine Cost = $150,000 Installation = $20,000 Depreciation-the MACRS 5-year recovery schedule will be used Five year usable life expected Earnings before Depreciation and Taxes Existing Machine Proposed Machine Year 1 $160,000 Year 1 $170,000 2 150,000 2 170,000 140,000 3 170,000 4 140,000 170.000 5 140,000 5 170,000 The firm pays 40 percent taxes on ordinary income and capital gains. Given the information in Table 11.4, compute the initial investment. Degnan Dance Company, Inc., a manufacturer of dance and exercise apparel, is considering replacing an existing piece of equipment with a more sophisticated machine. The following information is given. Existing Machine Cost = $100,000 Purchased 2 years ago Depreciation using MACRS Over a 5-year recover schedule Current market value = $105,000 Five year usable life remaining Facts Proposed Machine Cost = $150,000 Installation = $20,000 Depreciation-the MACRS 5-year recovery schedule will be used Five year usable life expected Earnings before Depreciation and Taxes Existing Machine Proposed Machine Year 1 $160,000 Year 1 $170,000 2 150,000 2 170,000 140,000 3 170,000 4 140,000 170.000 5 140,000 5 170,000 The firm pays 40 percent taxes on ordinary income and capital gains. Given the information in Table 11.4, compute the initial investment