Incremental operating cash inflowsStrong 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 $2,320 in Year 1; 3,712 in Year 2; $2,204 in Year 3 $1,392 in both Year 4 and Year 5; and $580 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.

	New Lathe			Old Lathe
Year	Revenue	Expenses (excluding depreciation and interest)		Revenue	Expenses (excluding depreciation and interest)
1	$38,300	31600		33200	23400
2	$39,300	31600		33200	23400
3	$40,300	31600		33200	23400
4	$41,300	31600		33200	23400
5	$42,300	31600		33200	23400

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.