Anna's Dolls, Inc. is in the 40% marginal tax bracket and is installing a new machine with a cost of $10,000. The machine will help the firm increase revenue by $10,000 and will cut operating costs by $3,000. the machine will be depreciated straight-line over its expected 5-year life. what is the expected after-tax cash flow from the investment in year one of its life?

1) $5,000

2) $8,600

3) $7,800

4) None of the answers provided is correct