You company is deciding whether to keep an existing machine or replace the machine with a newer model. If the firm buys the new machine, the following information applies.

The cost to purchase the new machine is $3635.

The sales revenue is $5759 per year for 4 years, starting in year 1.

The cost, except depreciation, is $1214 per year for 4 years, starting in year 1.

The new machine is depreciated using an accelerated depreciation schedule of year 1 = 33%, year 2 = 45%, year 3 = 15% and year 4 7%.

If the firm buys the new machine it will sell the old machine for an after-tax salvage value of $547

The tax rate is 38%.

What is the free-cash flow for the machine in year 1?

State your answer to the nearest dollar.

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