Initial investment at various sale prices Edwards Manufachuring Company (EMC) is considering replacing one machine with another. The old machine was purchased 3 years ago for an installed cost of $10,000 The firm is depreciating the machine under MACRS, using a 5-year recovery period (See table for the applicable depreciation percentages) The new machine costs $23,600 and requires $1.990 in installation costs. The firm is subject to a 40% tax rate. In each of the following cases, calculate the initial investment for the replacement a. EMC sells the old machine for $12,300 b. EMC sells the old machine for $7,080 c. EMC sells the old machine for $2,900 d. EMC sells the old machine for $1.530 Calculate the initial investment at various sale prices below 2. EMC sells the old machine for 512.300 (Round to the nearest dolar) (a) $ Cost of new asset Installation cost Total installed cost s Proceeds from sale of old asset Tax on sale of old asset Total wer-tax proceeds 5 5 $ tion Initial investment $ rary - X Data table lator arces (Click on the icon bere in order to copy the contents of the data table below into a spreadsheet y Mod on Tod 32 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 33% 20% 149 45% 25 3 159 199 1891 4 75 12 12. 5 129 9% 0 34 94 7 ON 49 . 10 11 Tota 100 100% 100% 10 years 10% 18! 149 124 946 04 TN View an 64 09 49 100% Check