Operating cash inflows$$Strong Tool Company has been considering purchasing a new lathe to replace a fully depreciated lathe that would otherwise last $5$ more years. The new lathe is expected to have a$5-$year life and depreciation charges of $ $2$ comma $160$ in Year$1$; $ $3$ comma $456$ in Year$2$; $ $2$ comma $052$ in Year$3$; $ $1$ comma $296$ in both Year $4$ and Year$5$; and $ $540$ in Year $6.$ The firm estimates the revenues and expenses$($excluding depreciation and$$ interest$)$ for the new and the old lathes to be as shown in the following table LOADING.... 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 time line the incremental operating cash inflows calculated in part b$.$

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Part $1$

a$.$ Calculate the operating cash inflows associated with the new lathe$$ below:$($Round to the nearest$$ dollar.$)$

Year

$1$

Revenue

$

Expenses $($excluding depreciation and interest$)$

$

Profit before depreciation and taxes

$

Depreciation

$

Net profit before taxes

$

Taxes

$

Net profit after taxes

$

Operating cash flows

$