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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

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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 $2,300 in Year 1; $3,680 in Year 2; $2,185 in Year 3: $1,380 in both Year 4 and Year 5; and $575 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 Expenses (excluding depreciation and interest) $ Profit before depreciation and taxes Depreciation Net profit before taxes Taxes Net profit after taxes Operating cash flows 1 $ S $ $ $ Enter any number in the edit fields and then click Check Answer. 13 parts Clear Al Check Answer SU 0 Data Table a (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) $38.900 $31,900 $33,900 $24,700 2 39,900 31,900 33,900 24,700 3 40,900 31,900 33,900 24,700 4 41,900 31,900 33,900 24,700 42,900 31,900 33,900 24,700 1 Print Done Done Enter any number in the edit fields and then click Check Answer 13 parts Clear A Check Answer remaining

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