Top-Ten Inc. is considering replacing its existing machine that is used to produce musical CDs. This existing machine was purchase 3 years ago at a base price of $50,000. Installation costs at the time for the machine were $2,000. The existing machine is considered a S-vear class for MACRS. The existing machine can he sold todav for $40,000 and for $10,000 in 3 vears. The new machine has a purchase price of $90,000 and is also considered a 34vear class for MACRS. Installation costs for the new machine are $5,000. The estimated salvage value of the new machine is $30,000. This new machine is more efficient than the existing one and thus savings before taxes using the new machine are $3,000 a vear. The company's marginal tax rate is 20% and the cost of capital is 12%. For this project, what is the incremental cash ow in vear 1? IMAGES Fixed Annual Expense Percentages by Recovery Class Year 3-Year SYear 2-Year IllYear lSYear 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% 3.55% 4 2.41% 11.52% 12.49% 11.52% 2.20% 5 11.5 2% 3.93% 9.22% 0.93% 0 5.20% 3.93% 2.32% 0.23% 2 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%