Fine Press is considering replacing the existing press with a more efficient press. The new press costs $55,000 and requires $5000 in installation costs. The old press was purchased 2 years ago for an installed cost of $35,000 and can be sold for $20,000 net of any removal costs today. Both presses are depreciated under MACRS 5 year recovery schedule. The firm is in 40 percent marginal tax rate.

A. Calcuate the book value of the existing press being replaced.

B. Calcuate the ta effect fromthe sale of the exising asset.

C. Calculate the initial investment of the new asset.