Operating cash inflows 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 $2,060 in Year 1; $3,296 in Year 2; $1,957 in Year 3; $1,236 in both Year 4 and Year 5, and $515 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. a. Calculate the operating cash inflows associated with the new lathe below: (Round to the nearest dollar.) Year Revenue $ $ Data table $ Expenses (excluding depreciation and interest) Profit before depreciation and taxes Depreciation Net profit before taxes $ Taxes $ $ Net profit after taxes Operating cash flows (Click on the icon here e 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 $38,600 $28,900 $33,500 $25,000 2 39,600 28,900 33,500 25,000 3 40,600 28,900 33,500 25,000 4 41,600 28,900 33,500 25,000 5 42,600 28,900 33,500 25,000 OWN