An analyst has collected the following information on a replacement project:

Purchase price of the new machine: $8,000

Shipping and installation charge: $2,000

Sale price of old machine: $6,000

Book value of old machine: $2,000

Net working capital increase if the new machine is installed: $2,000

Marginal tax rate: 25%

The initial cash flow is closest to:

(a)-$3,000

(b)-$10,000

(c)-$7,000

Please explain