Operating cash flows Strong Tool Company has been considering purchasing a new lathe to replace a fully depreciated lathe that would otherwise last 5 more years. The new lathe is expected to have a 5-year life and depreciation charges of $2,380 in Year 1; $3,808 in Year 2; $2,261 in Year 3; $1,428 in both Year 4 and Year 5; and $595 in Year 6. The firm estimates the revenues and expenses (excluding depreciation and interest) 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 flows associated with each lathe. (Note: Be sure to consider the depreciation in year 6.) b. Calculate the operating cash flows resulting from the proposed lathe replacement. c. Depict on a time line the incremental operating cash flows calculated in part b. a. Calculate the operating cash flows associated with the new lathe below: (Round to the nearest dollar.) Year 1 Revenue $ $ $ Expenses (excluding depreciation and interest) Profit before depreciation and taxes $ Depreciation $ Net profit before taxes $ $ $ Taxes Net profit after taxes $ Operating cash flows $ Data table (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) Year 1 New Lathe Expenses (excluding depreciation and interest) $28,100 28,100 28,100 28,100 28,100 Revenue $40,300 41,300 42,300 43,300 44,300 2 Old Lathe Expenses (excluding depreciation and interest) $23,100 23,100 23,100 23,100 23,100 Revenue $35,300 35,300 35,300 35,300 35,300 3 4 5 Print Done