Big-Pear Corp. is considering replacing its existing equipment that is used to produce smart cell phones. This existing equipment was purchase 3 vears ago at a base price of $60,000. Installation costs at the time for the machine were $8,000. The existing equipment is considered a S-vear class for MACRS. The existing equipment can be sold todav for $50,000 and for $30,000 in 3 vears. The new equipment has a purchase price of $100,000 and is also considered a 15-year class for MACRS. Installation costs for the new equipment are $6,000. The estimated salvage value of the new equipment is $80,000. This new equipment is more efficient than the existing one and thus savings before taxes using the new equipment are $20,000 a vear. Due to these savings, inventories will see a one time reduction of $3,000 at the time of replacement. The companv's marginal tax rate is 30% and the cost of capital is 12%. For this project, what is the incremental cash flow in vear 1? IvIACRS Fixed Annual Expense Percentages by Recovery Class Year 3Year SYear T-Year IiiYear lSYear 1 33.3 3% 20.00% 14.29% 10.00% 5.00% 2 44.45% 32.00% 24.49% 13.00% 9.50% 3 14.31% 19.20% 12.49% 14.40% 3.55% 4 2.41% 11.52% 12.49% 11.52% 2.20% 5 11.52% 3.93% 9.22% 0.93% 0 5.20% 3.93% 2.3 2% 0.23% Ii 3.93% 0.55% 5.90% 3 4.45% 0.55% 5.90% 9 0.50% 5.91% 10 0.55% 5-90% 11 3.23% 5.91% 12 5.90% 13 5.91% 14 5.90% 15 5.91% 10 2.95%