Operating cash inflows A firm is considering renewing its equipment to meet increased demand for its product. The cost of equipment modifications is 5182 million plus 5105,000 in installation costs. The firm will depreciate the equipment modifications under MACRS, using a 5 year recovery period (see table Additional sales revenus from the renewal should amount to $1 22 milion per year, and additional operating expenses and other costs (excluding depreciation and interest) will amount to 43% of the additional sales. The form is subject to a tax rate of 40% (Noter Answer the following questions for each of the next years.) a. What incremental camnings before depreciation, interest, and taxes will result from the renewal? b. What incremental net operating profits after taxes will result from the renewal c. What incremental operating cash inflows will result from the renewal? a. The incrementat profits before depreciation and tax are $ 695400 (Round to the nearest doltar) b. Calculate the incrementat not operating profits after taxes below. (Round to the nearest doftar) 1 $ 695.400 Year Profit before depreciation and taxes Depreciation Net profit before taxes Taxes Net profit after taxes - X tion Data table 30 (Cick on the icon here in order to copy the contents of the datatable below into a spreadsheet) Rounded Depreciation Percentages by Recovery Year Using MACRS for First Four Property Classes Percentage by recovery year Recovery year 3 years 5 years 7 years 10 years 33% 20% 14% 10N 454 32% 25% 189 15% 19% 18% 14% 7 125 12% 12% 5 12% 9 9 0 94 S% 7 94 7% 8 4% 6% 9 6% 10 6% 11 49 Totals 100N 100% 100% 100% *These percentages have been founded to the nearest whole percent to simplity calculations while retaining realism To calculate the actual depreciation for tax purposes, be sure to apply the actual unrounded percentages or directly apply double declining balance (200%) depreciation using the hat year convention Check answer Vies