Purchase and Disposal of Operating Asset and Effects on Statement of Cash Flows On January 1, 2017, Castlewood Company purchased machinery for its production line for $104,000. Using an estimated useful life of eight years and a residual value of $8,000, the annual straight-line depreciation of the machinery was calculated to be $12,000. Castlewood used the machinery during 2017 and 2018, but then decided to automate its production process. On December 31, 2018, Castlewood sold the machinery at a loss of $5,000 and purchased new, fully automated machinery for $205,000. Required: 1. How would the previous transactions be presented on Castlewood's statements of cash flows for the years ended December 31, 2017 and 2018 the minus sign to indicate cash outflows. Castlewood Company Statements of Cash Flows For the Years Ended December 31, 2017 and 2018 Partial statement of cash flows for 2017 Cash flows from operating activities: Net income Xx,XXX Cash flows from investing activities Partial statement of cash flows for 2018: Cash flows from operating activities: Net income $xx,X00X Cash flows from investing activities: 2. Castlewood would replace machinery if the replacement would result in in the future. Replacing machinery might be an option or if in production capacity