Please show formulas

P1111 Calculating initial investmentVastine Medical, Inc., is considering replacing its existing 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 (see Table 4.2, page 120.) 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 40% tax rate.

Calculate the book value of the existing computer system.

Calculate the after-tax proceeds of its sale for $200,000.

Calculate the initial investment associated with the replacement project.

PROBLEM 11-11
a.	Book Value =
b.	After-tax proceeds:
	Sales price of old equipment
	Book value of old equipment
	Recapture of depreciation
	Taxes on recapture of depreciation
	After-tax proceeds
c.	Initial investment:
	Cost of new machine
	Less: Sales price of old machine
	Plus: Tax on recapture of depreciation
	Initial investment