b) Calculate the after-tax proceeds of the sale of the existing roaster.

Sale price of old equipment $35,000

Book value of old equipment $ 18,910
Recapture value of depreciation $ 16, 909

Taxes on recapture of deprecation= $16,090x0.04= $6,436

Sale price of old roaster Tax on recapture of deprecation

$ 35,000-$56,436= $ 28,564 (After-tax proceeds from sale of old roaster)
C) Changes in account of current assets
Inventory+ Accounts receivable
$50,000+$70,000= $120,000 (Net Change)

Changes in account liabilities

Accruals+Account payable+Note Payable
$120,000+$40,000+$15,000= $35,000 (net changes)

Change in net working capital= Asset-Liabilities =$120,000-$35,000

= $85,000

d) Calculate the initial investment associated with proposed new roaster.

Cost of new roaster After-tax proceeds from sale of old roaster+ change in net
working capital

$130,000-$28,564+$85,000 = $186,436(initial investment)