1. ZamTrucking Corporation, a large diversified manufacturer of truck components, is trying to determine the initial investment required to replace an old machine with a new, more sophisticated and reliable model. The machines purchase price is K5000,000 and an additional K50,000 will be necessary to install it. The company use a depreciation model of 5-year recovery period in equal proportions annually. The present machine was purchased 4 years ago at a cost of K300 000 and was depreciated using a five year recovery period. The firm has found a buyer willing to pay K300,000 for the present machine and remove it at the buyers expense. The firm expects that a K25,000 increase in current assets and an K10,000 increase in current liabilities will accompany the replacement. Both ordinary income and capital gains are taxed at 40%.The firms cost of capital is 10%. What will be the initial investment for ZamTrucking Corporation [20]