P11-12 Initial investment: Basic calculation Cushing Corporation is considering the chase of a new grading machine to replace the existing one. The existing mach was purchased 3 years ago at an installed cost of $20,000; it was being depreciate under MACRS, using a 5-year recovery period. (See Table 4.2 for the applicable depreciation percentages.) The existing machine is expected to have a usable lifed at least 5 more years. The new machine costs $35,000 and requires $5,000 in insel lation costs; it will be depreciated using a 5-year recovery period under MACRO The existing machine can currently be sold for $25.000 without incurring any removal or cleanup costs. The firm is subject to a 40% tax rate. Calculate the investment associated with the proposed purchase of a new grading machine