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 $55. Installation costs at the time for the machine were $8. The existing equipment is considered a 5 -year class for MACRS. The existing equipment can be sold today for $60 and for $29 in 3 years. The new equipment has a purchase price of $125 and is also considered a 5 -year class for MACRS. Installation costs for the new equipment are $7. The estimated salvage value of the new equipment is $78. This new equipment is more efficient than the existing one and thus savings before taxes using the new equipment are \$17 a year. Due to these savings, inventories will see a one time reduction of $1 at the time of replacement. The company's marginal tax rate is 22% and the cost of capital is 12%. For this project, what is the incremental cash flow in year 1? Show your answer to the nearest \$.01. Do not use $, or % signs in your answer. MACRS Fixed Annual Expense Percentages by Recovery Class \begin{tabular}{|c|c|c|c|c|c|} \hline Year & 3-Year & 5-Year & 7-Year & 10-Year & 15-Year \\ \hline 1 & 33.33% & 20.00% & 14.29% & 10.00% & 5.00% \\ \hline 2 & 44.45% & 32.00% & 24.49% & 18.00% & 9.50% \\ \hline 3 & 14.81% & 19.20% & 17.49% & 14.40% & 8.55% \\ \hline 4 & 7.41% & 11.52% & 12.49% & 11.52% & 7.70% \\ \hline 5 & & 11.52% & 8.93% & 9.22% & 6.93% \\ \hline 6 & & 5.76% & 8.93% & 7.37% & 6.23% \\ \hline 7 & & & 8.93% & 6.55% & 5.90% \\ \hline 8 & & & 4.45% & 6.55% & 5.90% \\ \hline 9 & & & & 6.56% & 5.91% \\ \hline 10 & & & & 6.55% & 5.90% \\ \hline 11 & & & & 3.28% & 5.91% \\ \hline 12 & & & & & 5.90% \\ \hline 13 & & & & & 5.91% \\ \hline 14 & & & & & 5.90% \\ \hline 15 & & & & & 5.91% \\ \hline 16 & & & & & 2.95% \\ \hline \end{tabular} For your answer, round to the nearest dollar, do not enter the $ sign, 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 $3,005.87 then ent 3,006; if your answer is $1,200.25 then enter 1,200 For this project, the incremental cash flow in year 1 is: Your