You only need to look at 5 years column in MACRS

Relevant cash flowsNo terminal value Central Laundry and Cleaners is considering replacing an existing piece of machinery with a more sophisticated machine. The old machine was purchased 3 years ago at a cost of $52,500, and this amount was being depreciated under MACRS using a 5-year recovery period. The machine has 5 years of usable life remaining. The new machine that is being considered costs $75,100 and requires $3,500 in installation costs. The new machine would be depreciated under MACRS using a 5-year recovery period. The firm can currently sell the old machine for $55,100 without incurring any removal or cleanup costs. The firm is subject to a tax rate of 40%. The revenues and expenses (excluding depreciation and interest) associated with the new and the old machines for the next 5 years are given in the table Table contains the applicable MACRS depreciation percentages.) Note: The new machine will have no terminal value at the end of 5 years. a. Calculate the initial investment associated with replacement of the old machine by the new one. b. Determine the incremental operating cash inflows associated with the proposed replacement. (Note: Be sure to consider the depreciation in year 6.) c. Depict on a time line the relevant cash flows found in parts (a) and (b) associated with the proposed replacement decision. A Data Table a. Calculate the initial investment associated with replacement of the old machine by the new one. Calculate the initial investment below: (Round to the nearest dollar.) (Click on the icon here in order to copy the contents of the data table below into a Cost of new asset spreadsheet.) Installation costs Despvery Year Using MACRS for Total cost of new asset Proceeds from sale of old asset S * Data Table Percentage by recovery year 5 years 7 vears 10 years Tax on sale of old asset 20% 14% 10% Total proceeds, sale of old asset 25% 18% (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) 19% 18% 14% Initial investment 12% 12% 12% New machine Old machine 12% 9% Expenses Expenses 5% 8% (excluding depreciation and (excluding depreciation and Year Revenue interest) Revenue interest $749,500 $720.900 $673,100 $659,900 749,500 720,900 G75, 100 659.900 6% 749,500 720,900 679,100 659.900 749,500 720,900 677,100 659,900 100% 100% 100% Enter any number in the edit fields and then click Check, 5 749,500 720,900 673,100 659,900 9% 796 494 12 parts Done 13 remaining Print Done Relevant cash flowsNo terminal value Central Laundry and Cleaners is considering replacing an existing piece of machinery with a more sophisticated machine. The old machine was purchased 3 years ago at a cost of $52,500, and this amount was being depreciated under MACRS using a 5-year recovery period. The machine has 5 years of usable life remaining. The new machine that is being considered costs $75,100 and requires $3,500 in installation costs. The new machine would be depreciated under MACRS using a 5-year recovery period. The firm can currently sell the old machine for $55,100 without incurring any removal or cleanup costs. The firm is subject to a tax rate of 40%. The revenues and expenses (excluding depreciation and interest) associated with the new and the old machines for the next 5 years are given in the table Table contains the applicable MACRS depreciation percentages.) Note: The new machine will have no terminal value at the end of 5 years. a. Calculate the initial investment associated with replacement of the old machine by the new one. b. Determine the incremental operating cash inflows associated with the proposed replacement. (Note: Be sure to consider the depreciation in year 6.) c. Depict on a time line the relevant cash flows found in parts (a) and (b) associated with the proposed replacement decision. A Data Table a. Calculate the initial investment associated with replacement of the old machine by the new one. Calculate the initial investment below: (Round to the nearest dollar.) (Click on the icon here in order to copy the contents of the data table below into a Cost of new asset spreadsheet.) Installation costs Despvery Year Using MACRS for Total cost of new asset Proceeds from sale of old asset S * Data Table Percentage by recovery year 5 years 7 vears 10 years Tax on sale of old asset 20% 14% 10% Total proceeds, sale of old asset 25% 18% (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) 19% 18% 14% Initial investment 12% 12% 12% New machine Old machine 12% 9% Expenses Expenses 5% 8% (excluding depreciation and (excluding depreciation and Year Revenue interest) Revenue interest $749,500 $720.900 $673,100 $659,900 749,500 720,900 G75, 100 659.900 6% 749,500 720,900 679,100 659.900 749,500 720,900 677,100 659,900 100% 100% 100% Enter any number in the edit fields and then click Check, 5 749,500 720,900 673,100 659,900 9% 796 494 12 parts Done 13 remaining Print Done