Operating cash inflows Strong Tool Company has been considering purchasing a new lathe to replace a charges of $2,120 in Year 1; $3,392 in Year 2; $2,014 in Year 3; $1,272 in both Year 4 and Year 5; and $530 shown in the following table B. 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 depreciati 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. a. Calculate the operating cash inflows associated with the new lathe below: (Round to the nearest dollar.) Year 1 Revenue $ LA Expenses (excluding depreciation and interest) Profit before depreciation and taxes Depreciation Net profit before taxes Taxes Net profit after taxes $ A $ $ Operating cash flows $ a le 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 ar 5 and $530 in Year 6. The firm estiriates the revenues and expenses (excluding depreciation and Interest) for the new and the old lathes to be as the depreciation in year 6.) at der (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) New Lathe Old Lathe Expenses Expenses (excluding depreciation and (excluding depreciation and Year Revenue Interest) Revenue Interest) 1 $39,200 $29,100 $33,900 $24,300 2 40,200 29,100 33,900 24,300 3 41,200 29,100 33,900 24,300 4 42,200 29,100 33,900 24,300 5 43,200 29,100 33,900 24,300 N Operating cash inflows Strong Tool Company has been considering purchasing a new lathe to replace a charges of $2,120 in Year 1; $3,392 in Year 2; $2,014 in Year 3; $1,272 in both Year 4 and Year 5; and $530 shown in the following table B. 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 depreciati 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. a. Calculate the operating cash inflows associated with the new lathe below: (Round to the nearest dollar.) Year 1 Revenue $ LA Expenses (excluding depreciation and interest) Profit before depreciation and taxes Depreciation Net profit before taxes Taxes Net profit after taxes $ A $ $ Operating cash flows $ a le 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 ar 5 and $530 in Year 6. The firm estiriates the revenues and expenses (excluding depreciation and Interest) for the new and the old lathes to be as the depreciation in year 6.) at der (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) New Lathe Old Lathe Expenses Expenses (excluding depreciation and (excluding depreciation and Year Revenue Interest) Revenue Interest) 1 $39,200 $29,100 $33,900 $24,300 2 40,200 29,100 33,900 24,300 3 41,200 29,100 33,900 24,300 4 42,200 29,100 33,900 24,300 5 43,200 29,100 33,900 24,300 N
