P11-13 (similar to) Question Help 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 $2,020 in Year 1: $3,232 in Year 2: $1,919 in Year 3; $1.212 in both Year 4 and Year 5; and $505 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 timeline 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.) 0 Data Table (Click on the icon located on the top right corner of the data table below in order to copy its contents into a spreadsheet.) Year Revenue $38,700 39,700 40,700 41,700 42,700 New Lathe Expenses (excluding depreciation and interest) $31,700 31,700 31,700 31,700 31,700 Revenue $34,700 34,700 34,700 34,700 34,700 Old Lathe Expenses (excluding depreciation and interest) $25.200 25 200 25.200 25.200 25,200 Print Done Clear All Check