The Mountain Jam Company is considering replacing an old machine with a new machine. ma available:

company has hired you as an advisor to help making a sound decision. The following information are

$$ New machine cost $=$ $$12,000$

$$ Old machine current market value $=$ $$1,000$

$$ Salvage value at the end of Year $5=$ $$2,000($new machine$)$ and $$0($old machine$)$

$$ CCA rate $=20\%$

$$ Tax rate $=30\%$

$$ Project life $=5$ years

$$ Investment in NOWC $=$ $$1,000$

$$ Annual operating costs $-$ $$9,000$ cut to $$4,000$

$$ WACC $=11\mathrm{.}5\%$

$1-$ Calculate the incremental investment cash flow at year zero $(0)$ for replacing the old machine.