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Big-Pear lCorp. is considering replacing its existing equipment that is used to produce smart celi phones. This existing equipment was purchase 3 vears ago at a base price of $50,000. Installation costs at the time for the machine were $8,000. The existing equipment is considered a 5-vear class for MACRS. The existing equipment can be soid todav for $40,000 and for $30,000 in 3 vears. The new equipment has a purchase price of $100,000 and is also considered a 5-vear class for MACRS. installation costs for the new equipment are $8,000. The estimated salvage vaiue of the new equipment is $90,000. This new equipment is more efficient than the existing one and thus savings before taxes using the new equipment are $12,000 a vear. Due to these savings, inventories wili see a one time reduction of $1,000 at the time of repiacement. The company's marginal tax rate is 40% and the cost of capital is 12%. For this project, what is the incremental cash flow in vear 1? HACKS Fixes} Annual EIpenae Percentages by Recovery Class Year 3-Year Year 2-Year Iii-Year 15-Year 1 33.33% 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% 3.5 5% 4 2.41% 11.52% 12.49% 11.52% 2.20% 5 11.52% 3 .93% 9.22% 5.93% 5 5.25% 3.93% 2.3 2% 5.2 3% 2 3 .93% 5.5 5% 5.90% 3 4.45% 5.5 5% 5.90% 9 5.55% 5.91% 10 5.55% 5.90% .11 3.23% 5.91% 12 5.90% 13 5.91% 14 5.90% 15 5.91% 15 2.95% For vour answer, round to the nearest doliar, 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 vour answer is $3,005.82 then enter 3,006; if vour answer is $1,200.25 then enter 4,200 For this project, the incremental cash flow in vear 1 is