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 $ 55 55 555 s 1 Data table (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) New Lathe Old Lathe Year 12345 Revenue $39,000 40,000 41,000 42,000 43,000 Expenses (excluding depreciation and interest) $28,000 28,000 28,000 28,000 28,000 Print . Revenue $34,400 34,400 34,400 34,400 34,400 Done Expenses (excluding depreciation and interest) $24,200 24,200 24,200 24,200 24,200