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Initial cash flow: Basic calculation Cushing Corporation is considering the purchase of a new grading machine to replace the existing one. The existing machine was

Initial cash flow: Basic calculation Cushing Corporation is considering the purchase of a new grading machine to replace the existing one. The existing machine was purchased 3
years ago at an installed cost of $19,400; it was being depreciated under MACRS using a 5-year recovery period. (See table for the applicable depreciation percentages.) The
existing machine is expected to have a usable life of at least 5 more years. The new machine costs $35,400 and requires $5,500 in installation costs; it will be depreciated using a
5-year recovery period under MACRS. The existing machine can currently be sold for $24,100 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.
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