P11-11 Calculating initial investment Vastine Medical Inc. is replacing its computer system, which was purchased 2 years ago at a cost of $325,000. The system can be sold today for, $200,000. It is being depreciated using MACRS and a 5-year recovery period. A new computer system will cost $500,000 to purchase and install. Replacement of the computer system would not involve any change in net working capital. Assume a 21% tax rate. a. Calculate the book value of the existing computer system (see Table 4.2 ). b. Calculate the after-tax proceeds of its sale for $200,000. c. Calculate the initial investment associated with the replacement project. What would the initial investment be if the new computer qualified for 100% bonus depreciation? Table 4.2 These percentages have been rounded to the nearest whole percent