Gloria Jean’s Coffee Roasters, Inc., wishes to expand and modernize its facilities. The installed cost of a proposed computer-controlled automatic-feed roaster will be $130,000. The firm has a chance...

Gloria Jean’s Coffee Roasters, Inc., wishes to expand and modernize its facilities. The installed cost of a proposed computer-controlled automatic-feed roaster will be $130,000. The firm has a chance to sell its 4-year-oldroaster for $35,000. The existing roaster originally cost $60,000 and was being depreciated using MACR and a 7-year recovery period. Gloria is subject to a 40% tax rate.a. What is the book value of the existing roaster?b. Calculate the after-tax proceeds of the sale of the existing roaster.c. Calculate the change in net working capital using the following figures:Year12345678
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MACR 7 Year Recovery Periodd. Calculate the initial investment associated with the proposed new roaster.