You purchased a machine five years ago for $100,000. It has a useful life of 10 years and you depreciate it using straight line depreciation to an expected salvage value at the end of its life of $5,000. It currently has a salvage value of $20,000. You are considering purchasing a new machine for $175,000. The new machine is expected to have a salvage value of $35,000 at the end of its life. It will cost $8,000 to ship the new machine and $7,000 to install. The new machine will require you to maintain an additional $15,000 in inventory. Your marginal tax bracket is 34%. Calculate the initial investment for this machine. The new machine is expected to provide yearly incremental cashflows of $40,000 per year.