E Homework: Chapter 11 Homework Question 4, P11-B (simil... Part 1 of 3 HW Score: 18.75%, 3 of 16 points O Points: 0 of 1 Save Calculating initial investment Vastine Medical, Inc., is considering replacing its existing computer system, which was purchased 3 years ago at a cost of $320,000. The system can be sold today for $210,000. It is being depreciated using MACRS and a 5-year recovery period (see the table 3). A new computer system will cost $509,000 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 $210,000. c. Calculate the initial investment associated with the replacement project. - X Data table . a. The remaining book value is $. (Round to the nearest dollar.) (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) 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 1 339 20% 14% 2 45% 32% 25% 3 15% 19% 18% 4 7% 12% 12% 5 12% 9% 6 5% 9% Print Done