Initial investment at various sale pricesEdwards 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 $2,040 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.

Percentage by Recovery Year*
Recovery Year	3 years	5 years	7 years	10 years
1 2 3 4 5 6 7 8 9 10 11	33% 45% 15% 7%	20% 32% 19% 12% 12% 5%	14% 25% 18% 12% 9% 9% 9% 4%	10% 18% 14% 12% 9% 8% 7% 6% 6% 6% 4%
Totals	100%	100%	100%	100%

a. EMC sells the old machine for $12,900.

b. EMC sells the old machine for $6,940.

c. EMC sells the old machine for $2,900.

d. EMC sells the old machine for $1,560.