5)

Printer Corp is evaluating whether to replace an older device. The older device is being depreciated at $40,000 per year, whereas the depreciation for a new device is expected to be $35,000 per year. Printer Corp's operating income, excluding depreciation, is expected to be $90,000 no matter which device is used. The firms marginal tax rate is 40 percent. If the new device is purchased, what effect will the change in depreciation have on the firms supplemental operating cash flow?

		-3,000
		-2,000
		-1,000
		3,000
		5,000