3. BlackHawk Industrial Inc. is considering updating its production process. The managers are considering replacing a machine which it purchased four years ago with an installed cost of $570,000. There are 2 years of depreciation remaining using the MACRS rates given below. The new machine, an Eagle2000, will cost $760,000 and will require an additional $30,000 for delivery and installation. This new unit will also require after-tax training costs of approximately $16,000. The MACRS rates are 20%, 32%, 19%, 12%, 11%, and 6% for years 1 through 6 respectively, and the marginal tax rate is 34%. The old machine is expected to be sold for approximately $190,000 today or $30,000 ten years from now. If BHI purchases the new equipment, annual revenues are expected to increase by about $48,000 per year, however, the expenses are expected to decrease from $52,000 with the old equipment to $35,000 with the new machine in the first year. Beyond that (year 2, 3, etc), the company's expenses are expected to be an additional $3,000 less per year. Since the new machine is expected to be more efficient, net operating working capital (mainly due to required inventory) is expected to fall by $5,000 in year 0, and increase by $2,000 in year 1, with no other changes expected. b) (8 points) Calculate the year 1 net cash flow which would be used for capital budgeting purposes