ABC Ltd is considering replacing an existing piece of equipment with a more sophisticated machine. The existing machine was purchased two years ago at a cost of $100,000 and is being depreciated straight-line over 5 years. The proposed new machine will cost $150,000, will require another $20,000 in installation costs, and will be depreciated straight-line over 10 years. If the old machine is retained, then earnings before depreciation and taxes are expected to be $160,000 and $150,000 in years 1 and 2, and then $140,000 per year in each of years 3, 4 and 5. If the new machine is purchased, then earnings before depreciation and taxes are expected to be $170,000 per year for the next five years. Assume a tax rate of 40%. The incremental operating net cash flow for year 1 is: Select one: O a $7,800 O b. $1,400 O c. $13,000 O d. $4,800 Oe. $11,600 me left 1:59:47