Initial investment at various sale prices Edwards Manufacturing 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 $24,700 and requires $2,030 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 $11,700. b. EMC sells the old machine for $7,000. c. EMC sells the old machine for $2,900. d. EMC sells the old machine for $1,600. Calculate the initial investment at various sale prices below. a. EMC sells the old machine for $11,700. (Round to the nearest dollar.) Cost of new asset Installation cost Total installed cost Proceeds from sale of old asset $ Tax on sale of old asset Total after-tax proceeds Initial investment b. EMC sells the old machine for $7,000. (Round to the nearest dollar.) Cost of new asset $ Installation cost 24,700 2,030 26,730 Total installed cost $ Proceeds from sale of old asset Tax on sale of old asset Total after-tax proceeds A Initial investment c. EMC sells the old machine for $2,900. (Round to the nearest dollar.) Cost of new asset 24,700 Installation cost 2.030 Total installed cost $ 26,730 Proceeds from sale of old asset Tax on sale of old asset Total after-tax proceeds | | Initial investment | d. EMC sells the old machine for $1,600. (Round to the nearest dollar.) Cost of new asset 24,700 2,030 Installation cost Total installed cost 26,730 Proceeds from sale of old asset | Tax on sale of old asset Total after-tax proceeds | Initial investment || (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) 10 years 10% 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% 14% 45% 32% 25% 18% 12% 12% 12% 5% 9% 9% 18% 14% 19% 15% 7% 9% o ovo AWN- 12% 9% 8% 7% 4% 6% 11 6% 6% 4% Totals 100% 100% 100% 100% *These percentages have been rounded to the nearest whole percent to simplify calculations while retaining realism. To calculate the actual depreciation for tax purposes, be sure to apply the actual unrounded percentages or directly apply double-declining balance (200%) depreciation using the half-year convention