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P 3 Operating cash flows. Strong Tool Partners has been considering purchasing a new lathe to replace a fully depreciated lathe that would otherwise last

P3 Operating cash flows. Strong Tool Partners 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 $2,000 in year 1;$3,200 in year 2;$1,900 in year 3;$1,200 in
both year 4 and year 5 ; and $500 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 table below. The firm is subject to a 40% tax rate.
Answer - fill in the blue boxes below.
Table 4.2
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