Editional instructions ration is considering replacing a machine. The replacement will reduce operating expenses (that is, increase earnings beforedepreciation, interest, and taxes) by $20,00 rs the new machine is expected to last. Although the old machine has zero book value, it can be used for 5 more years. The depreciable value of the new machine is 555, he machine under MACRS using a 5-year recovery and is subject to a 40% tax rate. Estimate the incremental operating cash inflows generated by the replacement. (Note e depreciation in year 6.) 31 41 51 I profits before n and taxes eciation before taxes after taxes cash flows 5 Years 2095 8296 1996 1296 12% 59