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 $2,040 in Year 1; $3,264 in Year 2; $1,938 in Year 3; $1,224 in both Year 4 and Year 5 ; and $510 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. \begin{tabular}{cccccc} & \multicolumn{2}{c}{ New Lathe } & & \multicolumn{2}{c}{ Old Lathe } \\ \cline { 2 - 3 } \cline { 5 - 5 } Year & Revenue & \begin{tabular}{c} Expenses \\ (excluding depreciation \\ and interest) \end{tabular} & & Revenue & \begin{tabular}{c} Expenses \\ (excluding depreciation \\ and interest) \end{tabular} \\ \hline 1 & $39,000 & $31,900 & & $37,000 & $25,700 \\ 2 & 40,000 & 31,900 & 37,000 & 25,700 \\ 3 & 41,000 & 31,900 & & 37,000 & 25,700 \\ 4 & 42,000 & 31,900 & & 37,000 & 25,700 \\ 5 & 43,000 & 31,900 & 37,000 & 25,700 \end{tabular}