P11-19 (book/static) Question Help Operating cash flows 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 $2,000 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 following table The firm is subject to a 40% tax rate on ordinary income. a. Calculate the operating cash flows associated with each lathe. (Note: Be sure to consider the depreciation in year 6.) b. Calculate the operating cash flows resulting from the proposed lathe replacement. c. Depict on a timeline the incremental operating cash flows calculated in part b. a. Calculate the operating cash flows 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 $ $ $ $ $ $ $ Enter any number in the edit fields and then click Check Answer. Check Answer Clear All 13 parts remaining 26 MacBook Air Data Table k on the icon located on the top-right corner of the data table below in order to copy its contents into a adsheet.) New Lathe Old Lathe Expenses Expenses (excluding depreciation (excluding depreciation ear Revenue and interest) Revenue and Interest) 1 $40,000 $30,000 $35,000 $25,000 2 41,000 30,000 35,000 25,000 42,000 30,000 35,000 25,000 43,000 30,000 35,000 25,000 44,000 30,000 35,000 25,000 OANA Print Done TUTTE BULTETUS ET MITENCKUTECK SWE Clear All Check Ans ng