Cuda Marine Engines, Inc. must develop the relevant cash flows for a replacement capital investment proposal. The proposed asset costs $50,000 and has installation costs of $3,000. The asset will be depreciated using a five-year recovery schedule. The existing equipment, which originally cost $25,000 and will be sold for $10,000, has been depreciated using an MACRS five-year recovery schedule and three years of depreciation has already been taken. The new equipment is expected to result in incremental before-tax earnings before depreciation, interest and taxes (EBIDT) of $15,000 per year. The firm has a 40 percent tax rate.

A. The cash flow pattern for the capital investment proposal is ?

B. The book value of the existing assets is ?

C. The icremental depreciation expense for year 1 (for the new asset) is ?

D. The icremental depreciation expense for year 5 (for the new asset) is ?

E. The annual incremental after tax cash flow from operations for year 1 (for the new equipment) is ?