Qu E Homework: Homework Set 4 Calculating initial investment Vastine Medical, Inc., is considering replacing its existing computer system, MACRS and a 5-year recovery period (see the table 1). A new computer system will cost $505,000 to purc ordinary income and capital gains. a. Calculate the book value of the existing computer system. b. Calculate the after-tax proceeds of its sale for $194,000. c. Calculate the initial investment associated with the replacement project. . The remaining book value is (Round to the nearest dollar Data table (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Rounded Depreciation Percentages by Recovery Year Using MACRS for First Four Property Classes Percentage by recovery year* Recovery year 3 years 5 years 7 years 10 years 1 33% 20% 14% 10% 2 45% 32% 25% 18% 3 15% 19% 18% 14% 4 7% 12% 12% 12% 5 9% 9% 6 9% 8% 7 9% 7% 8 4% 6% 9 6% 10 6% 11 4% Totals 100% 100% 100% 100% *These percentages have been rounded to the nearest whole percent to simnlify calculation whil 12% 5% k: Homework Set 4 Question 10, P11-3 (simil... Part 1 of 3 HW Score 7.3.5 of 60 points O Points: 0 of 2 Save stment Vostine Medical Inc is considering replacing its existing computer system, which was purchased 2 years ago at a cost of $315,000. The system can be sold today for $154,000. It is being depreciated using ncovery period treo tho tatin A new computer system wil.com $505,000 to purchase and install. Replacement of the computer system would not involve any change in net working capital Assume a 40'll tax rate on apital gains