Initial investment 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 $34,100 and requires $4.500 in installation costs: it will be depreciated using a 5-year recovery period under MACRS. The existing machine can currently be sold for $24,300 without incurring any removal or cleanup costs. The firm is subject to a 40% tax rate Calculate the initial investment associated with the proposed purchase of a new grading machine. The initial investment will be $ (Round to the nearest dollar) Data Table - 3 years 5 years 7 years 10 years (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) Rounded Depreciation Percentages by Recovery Year Using MACRS for First Four Property Classes Percentage by recovery year Recovery year 1 33% 20% 14% 10% 2 45% 32% 25% 18% 3 15% 19% 18% 14% 4 7% 12% 12% 12% 5 12% 9% 9% 6 5% 9% 8% 7 9% 7% 8 6% 9 6% 4% Print Done course HINAUS Hinancial Mgt, Fall 2020 - Despany is based on Zutter/Smart Principles of Managerial Finance, e