Homework: Chapter 11 Homework Save Score: 0 of 1 pt 8 of 12 (0 complete) HW Score: 0%, 0 of 12 pts P11-19 (similar to) Question Help Incremental operating cash inflows Strong Tool Company has been considering purchasing a new lathe 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 $2,340 in Year 1; $3,744 in Year 2, 52,223 in Year 3; $1,404 in both Year 4 and Year 5; and $585 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 : The firm is subject to a 40% tax rate on ordinary income. a. Calculate the operating cash inflows 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. Calculate the operating cash inflows associated with the new lathe below: (Round to the x Data Table Year 1 Revenue $ to a spreadsheet.) $ Expenses (excluding depreciation and interest) Profit before depreciation and taxes Depreciation $ $ Year $ Net profit before taxes Taxes 1 2 3 4 5 New Lathe Expenses (excluding depreciation and interest) $28.500 28,500 28,500 28,500 28,500 Revenue $41,900 42,900 43,900 44.900 45,900 $ Old Lathe Expenses (excluding depre and interes $23,200 23,200 23.200 23,200 23.200 Revenue $34,200 34,200 34,200 34.200 34,200 $ Net profit after taxes Operating cash flows $ Enter any number in the edit fields and then click Check Answer. Print Done 13 parts Answer remaining