E Homework: Chapter 11 Homework Question 6, P11-13 (simi... Part 1 of 14 HW Score: 18.75%, 3 of 16 points O Points: 0 of 1 Save Incremental operating cash inflows Strong Tool Company has been considering purchasing a new late to replace a fully depreciated lathe that will last 5 more years. The new lathe is expected to have a 5-year life and depreciation charges of $2,400 in Year 1; $3,840 in Year 2: $2,280 in Year 3: $1,440 in both Year 4 and Year 5; and $600 in Year 6. The firm estimates the revenues and expenses (excluding depreciation) for the new and the old lathes to be as shown in the following table B. The firm is subject to a 40% tax rate on ordinary income. a. Calculate the operating cash infows associated with each lathe. (Note: Be sure to consider the depreciation in year 6.) b. Calculate the incremental (relevant) operating cash inflows resulting from the proposed lathe replacement. c. Depict on a time line the incremental operating cash inflows calculated in part b. a: ) a. Calculate the operating cash inflows associated with the new lathe below (Round to the nearest dollar.) Year 1 1 Revenue S Data table Expenses (excluding depreciation and interest) S s Profit before depreciation and taxes S (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) Depreciation S New Lathe Old Lathe Net profit before taxes S 5. Expenses Expenses Taxes (excluding depreciation S S (excluding depreciation Year Revenue and interest) Revenue and interest) Net profit after taxes S S S40,500 $29,600 $33,400 $26.800 41,500 29,600 33,400 26,800 Operating cash flows S 42,500 29,600 33,400 28,800 43,500 29,600 33,400 26,800 44,500 29.600 33,400 26,800 **unt Print Done