Lightening Bulk Company is a moving company specializing in transporting large items worldwide. The firm has an 89% on-time delivery rate. Seventeen percent of the items are misplaced and the remaining 1% are lost in shipping. On average, the firm incurs an additional $69 per item to track down and deliver misplaced items. Lost items cost the firm about $340 per item. Last year, the firm shipped 6,040 items with an average freight bill of $240 per item shipped.

The firms manager is considering investing in a new scheduling and tracking system costing $155,000 per year. The new system is expected to reduce misplaced items to 5% and lost items to 0.25%. Furthermore, the firm expects total sales to increase by 14% with the improved service. The average contribution margin ratio on any increased sales volume, after cost savings associated with a reduction in misplaced and lost items, is expected to be 41.5%

1b. What is the estimated change in pretax cash flow under the proposed system? (Negative amounts should be indicated by a minus sign. Round your answers to the nearest whole dollar amount.)

Cost of the new system (per year) Expected benefits each year from the new system: Contribution margin from sales increase Cost savings from decrease in misplaced itemsexisting sales Savings from decrease in lost items-existing sales Change in pre-tax cash flow per year under the new system $