Score: 0 of 2 pts 11 of 25 (10 complete) HW Score: 36.33%, 18.16 of 50 pts P11-11 (similar to) Question Help Operating cash Inflows Afimis considering renewing its equipment to meet increased demand for its product. The cost of equipment modifications is $1.93 million plus $110,000 in installation costs. The fim wil depreciate the equipment modifications under MACRS. using a 5 year recovery period (see takle ). Additional sales revenue from the renewal should amount to $1.26 milion per year, and additional operating expenses and other casts (excluding depreciation and interest will amount to 44% of the additional sales. The firm is subject to a tax rate of 40%. (Note: Answer the following questions for each of the next 6 years a. What incremental earnings before depreciation, interest, and laxes will result from the renewal b. What incremental net aperaling profits after taxes wil result from the renewal? Data Table c. What incremenlal operating cash inflows will result from the renewal? a. The incremental profits before depreciation and tex are $ . {Round to the nearest dolar.) Rounded Depreciation Percentages by Recovery Year Using MACRS for First Four Property Classes Percentage by recovery year Recovery year 3 years 5 years 7 years 1 33% 2024 1454 10% 2 45% 32 2554 189 3 15% 1994 1854 14% 4 7% 12% 1254 12% 5 12% 24 9% 6 5% 9% 8% 99% B 4% 64 9 64 10 0% 11 4% Totals 100% 100% 100% 100 *These percentages have been rounded to the nearest whole percent to simplity calculations while retaining realism. To calculate the actual depreciation for tax purposes, be sure to apply the actual unrounded beroenlaces or directly apply double-declining balance (200% depreciation using the half-vear 10 years Print Done