Big$-$Pear Corp. is considering replacing its existing equipment that is used to produce smart cell phones. This existing equipment was purchase $3$ years ago at a base price of $$60,000.$ Installation costs at the time for the machine were $$7,000.$ The existing equipment is considered a $5-$year class for MACRS. The existing equipment can be sold today for $$50,000$ and for $$20,000$ in $5$ years. The new equipment has a purchase price of $$150,000$ and is also considered a $5-$year class for MACRS. Installation costs for the new equipment are $$5,000.$ The estimated salvage value of the new equipment in $5$ years is $$90,000.$ This new equipment is more efficient than the existing one and thus savings before taxes using the new equipment are $$19,000$ a year. Due to these savings, inventories will see a one time reduction of $$4,000$ at the time of replacement. The company's marginal tax rate is $20\%$ and the cost of capital is $12\%.$ For this project, what is the incremental cash flow in year $2?$

MACRS Fixed Annual Expense Percentages by Recovery Class

Year $3-$Year $5-$Year $7-$Year $10-$Year $15-$Year

$133\mathrm{.}33\%20\mathrm{.}00\%14\mathrm{.}29\%10\mathrm{.}00\%5\mathrm{.}00\%$

$244\mathrm{.}45\%32\mathrm{.}00\%24\mathrm{.}49\%18\mathrm{.}00\%9\mathrm{.}50\%$

$314\mathrm{.}81\%19\mathrm{.}20\%17\mathrm{.}49\%14\mathrm{.}40\%8\mathrm{.}55\%$

$47\mathrm{.}41\%11\mathrm{.}52\%12\mathrm{.}49\%11\mathrm{.}52\%7\mathrm{.}70\%$

$511\mathrm{.}52\%8\mathrm{.}93\%9\mathrm{.}22\%6\mathrm{.}93\%$

$65\mathrm{.}76\%8\mathrm{.}93\%7\mathrm{.}37\%6\mathrm{.}23\%$

$78\mathrm{.}93\%6\mathrm{.}55\%5\mathrm{.}90\%$

$84\mathrm{.}45\%6\mathrm{.}55\%5\mathrm{.}90\%$

$96\mathrm{.}56\%5\mathrm{.}91\%$

$106\mathrm{.}55\%5\mathrm{.}90\%$

$113\mathrm{.}28\%5\mathrm{.}91\%$

$125\mathrm{.}90\%$

$135\mathrm{.}91\%$

$145\mathrm{.}90\%$

$155\mathrm{.}91\%$

$162\mathrm{.}95\%$

For your answer, round to the nearest dollar, do not enter the $ sign, DO NOT USE commas to separate thousands, use a negative sign in front of first number is the cash flow is negative $($do not use parenthesis to indicate negative cash flows$).$ For example, if your answer is $$3,005\mathrm{.}87$ then enter $3006$; if your answer is $-$$$1,200\mathrm{.}25$ then enter $-1200$

For this project, the incremental cash flow in year $2$ is: