DuPree Coffee Roasters, Inc., wishes to expand and modernize its facilities. The installed cost of a proposed computer-controlled automatic-feed roaster will be

$135,000. The firm has a chance to sell its 4-year-old roaster for $34,400. The existing roaster originally cost $60,100 and was being depreciated straight-line over 7 years. DuPree pays taxes at a rate of 40%.

Anticipated Changes in Current Assets and Current Liabilities
Accruals	$20,300
Inventory	+49,700
Accounts payable	+41,000
Accounts receivable	+70,700
Cash	0
Notes payable	+14,400

a. What is the book value of the existing roaster?

b. Calculate the after-tax proceeds of the sale of the existing roaster.

c. Calculate the change in net working capital using the following figures:

d. Calculate the initial investment associated with the proposed new roaster.