Expansion versus replacement cash flows Tesla Systems has estimated the cash flows over the 5-year lives for two projects A and B. These cash flows are summarized in the following table. (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Project A Project B Initial investment - $4,652,000 $1,542,000 Year Operating cash flows $558,000 $376,000 2 934 000 376,000 3 1,344 000 376,000 4 2.221.000 376,000 5 3,396.000 376,000 "After-tax cash inflow expected from liquidation 1 a. Calculate the relevant cash flows for this replacement decision: (Round to the nearest dollar) Relevant Cash Flows Year $ 1 5 2. S 3 4 $ $ s 5 Enter any number in the edit fields and then click Check Answer 1 part remaining Clear All Check Answer 1 2 Project A Project B Initial Investment -$4,652,000 $1,542,000 Year Operating cash flows $558,000 $376,000 934,000 376,000 3 1,344.000 376,000 4 2 221 000 376,000 5 3.396 000 376,000 "After-tax cash inflow expected from liquidation a. If Project A, which requires an initial investment of - $4,652,000, is a replacement for Project B and the $1,542,000 initial investment shown for Project Bis the after-tax cash inflow expected from liquidating it, what would be the net cash flows for this replacement decision? b. How can an expansion decision such as project A be viewed as a special form of a replacement decision? Explain. a. Calculate the relevant cash flows for this replacement decision: (Round to the nearest dollar) Relevant Year Cash Flows $ 1 5 2. S 3 4 $ $ s 5 Enter any number in the edit fields and then click Check Answer 1 part remaining Clear All Check