Operating cash inflows Strong Tool Company has been considening 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 $2,100 in Year 1, \$3,360 in Year 2; $1,995 in Year 3, \$1,260 in both Year 4 and Year 5 ; and $525 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 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 operating cash inflows resulting from the proposed lathe replacement c. Depict on a time line the incremental operating cash inflows calculated in part b. Data table (Click on the icon here [ in order to copy the contents of the data table below into a spreadsheet) Calculate the operating cash inflows associated with the new lathe below. (Round to the nearest dollar.) (Round to the nearest dollar) Year Revenue Expenses (excluding depreciation and interest) Profit before depreciation and taxes Depreciation Net profit before taxes Taxes Net profit after taxes Operating cash flows (Round to the nearest dollar.) \begin{tabular}{l} \multicolumn{1}{c}{ Year } \\ Revenue \\ Expenses (excluding depreciation and interest) \\ Profit before depreciation and taxes \\ Depreciation \\ Net profit before taxes \\ Taxes \\ Net profit after taxes \\ Operating cash flows \end{tabular} Year Revenue Expenses (excluding depreciation and interest) Profit before depreciation and taxes Depreciation Net profit before taxes Taxes Net profit after taxes Operating cash flows Calculate the operating cash inflows associated with the old lathe below: (Round to the nearest dollar.) b. Calculate the incremental (relevant) operating cash inflows resulting from the proposed lathe replacement Calculate the incremental (relevant) operating cash inflows resulting from the proposed lathe replacement below: (Round to the nearest dollar) \begin{tabular}{lc} \multicolumn{1}{c}{ Year } \\ \hline New Lathe & $ \\ Old Lathe & $ \\ Incremental Cash Flows & $ \end{tabular} \begin{tabular}{lc|} \multicolumn{1}{c}{ Year } \\ New Lathe & 3 \\ Old Lathe & $ \\ Incremental Cash Flows \end{tabular} \begin{tabular}{lc} \multicolumn{1}{c}{ Year } \\ \hline New Lathe & $ \\ Old Lathe & $ \\ Incremental Cash Flows \end{tabular} \begin{tabular}{lc|} \multicolumn{1}{c}{ Year } \\ \hline New Lathe & $ \\ Old Lathe & $ \\ Incremental Cash Flows & $ \end{tabular} \begin{tabular}{lc} \multicolumn{1}{c}{ Year } \\ \hline New Lathe & $ \\ Old Lathe & $ \\ Incremental Cash Flows & $ \end{tabular} A. Year
