Integrative Determining relevant cashflows Lombard Company is contemplating the purchase of a new high-speed widget grinder to replace the existing grinder. The existing grinder was purchased 2 years ago at an instaled cost of $58700; it was being depreciated straight-line for 5 years. The existing grinder is expected to have a usable life of 5 more years, The new grinder costs $106,900 and requires $5.100 in installation costs, it has a 5-year usable lie and would be depreciated on a straight-line basis. Lombard can currently sell the existing grinder for $69.700without incurring any removal or cleanup costs. To support the increased business resulting from purchase of the new grinder, accounts receivable would increase by $39.700, inventories by S30,900, and accounts payable by $58,200. At the end of 5 years, the existing grinder would have a market value of zero; the new grinder would be sold to net $28,900 after removal and cleanup costs and before taxes. The firm is subject a 40% tax rate. The estimated earnings before depreciation, interest,and taxes over the 5 years for both the new and the existing grinder are shown inthe following table a. Calculate the initial investment associated with the replacement of the existing grinder by the new one. Determine the incremental operating cash inflows associated with the proposed grinder replacement. c. Determine the terminal cash flow expected at the end of year 5 from the proposed grinder replacement. d. Depict on a time line the relevant cash fows associated with the proposed grinder replacement decision. Earnings before depreciation, interest, and taxes New grinder Existing grinder Year $42,700 $25,100 23,100 42,700 42,700 21,100 42,700 19,100 42,700 17,100 c. Determine the terminal cash flow expected at the end of year 5 from the proposed grinder replacement. Calculate the terminal cash flow below: (Round to the nearest dollar.) Proceeds from sale of new asset s Tax on sale of new asset Total proceeds from sale of new asset Change in working capital Terminal cash flow