Kajukotuwa Corporation is considering the purchase of a new item of equipment to replace the current one. The new equipment will cost $$\$ 100,000$$ and requires $$\$ 7,000$$ in installation costs. It will be depreciated using the straight line method over a five-year period. The old equipment was purchased for $$\$ 40,000$$ five years ago. It was being depreciated using the straight line method over a five-year economic life. The old machine's market value today is $$\$ 45,000$$. As a result of the proposed replacement the corporation's investment in working capital is expected to increase by $$\$ 12,000$$. The tax rate is $30 \%$.
(a) Calculate the book-value of the old machine.
(b) Calculate the taxes, if any, attributable to the sale of the old machine.
(c) Determine the initial investment associated with the proposed equipment replacement.