Proposal 2 Type of Capital ExpansionReplacement Replacement Mutually Exclusive Mutually Exclusive with 2 $300,000 $15,000 5 years $100,000 1/1/2013 120,000 5 years Independent with 3 $1,500,000$200,000 Type of Project Cost of new asset Installation costs MACRS (new asset) Original cost of old asset Purchase date (old asset) Sale proce eds (old asset) MACRS (old asset) Annual net profits before s0 $0 N/A* N/A N/A N/A 5 years $80,000 1/1/2010 50,000 5 years depreciation & taxes (old)N/A $30,000 $25,000 Annual net profits before depreciation & taxes (new) $250,000 $100,000 $175,000 For Proposal 1, the initial outlay equals(See Table 11.2)