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the tri-star company currently use an old lathe that was purchased 2 years ago at $4000....

the tri-star company currently use an old lathe that was purchased 2 years ago at $4000. this machine is being depreciation an MACRS five year (20%,32%, 19%,12%,11,9%) the current market value for this machine is $2000. the proposed new improved lathe cost $10,000 and additional installation fee of $1200. the new lathe machine would require that inventories be increase by $1000 and A/R increase $700, but A/P would simultaneously increase by $500. Tri-Star's marginal federal-plus-state tax rate is 25%. if the company evaluating replacement of the old machine with the new one, what is initial investment?

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