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 $40. Installation costs at the time for the machine were $6. The existing equipment is considered a 5-year class for MACRS. The existing equipment can be sold today for $50 and for $20 in 3 years. The new equipment has a purchase price of $120 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 $80. 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 20% and the cost of capital is 12%. For this project, what is the incremental cash flow in year 1? MACRS Fixed Annual Expense Percentages by Recovery Class Year 3-Year 5-Year 7-Year 10-Year 15-Year 1 33.33% 20.00% 14.29% 10.00% 5.00% 2 44.43% 32.00% 24.49% 18.00% 9.50% 3 14.81 19.20% 17.4906 14.40% 8.35% 4 7.4196 11.52% 12.49% 11.5296 7.70% 5 11.5296 8.9396 9.2296 6.9396 6 5.76% 8.93% 7.37% 6.23% 7 8.9396 6.559 5.90 8 4.4596 6.55% 5.90% 9 6.56% 5.91% 10 6.3396 5.90% 11 3.28% 5.91% 12 5.909 13 5.9196 14 5.90% 15 5.91% 16 2.95% For your answer, round to the nearest $.01, do not enter the $ sign and 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 $34.32 then enter 34.32. If your answer is $12.25 then enter - 12.25 not (12.25). For this project, the incremental cash flow in year 1 is