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 $2,400 in Year 1: $3,840 in Year 2: $2,280 in Year 3; $1,440 in both Year 4 and Year 5; and $600 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 inflows associated with each lathe. (Note: Be sure to consider the depreciation in year 6.) b. Calculate the operating cash inflows reskiting from the proposed lathe replacement. c. Depict on a time line the incremental operating cash inflows calculated in part b. a Calculate the operating cash inflows 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 ulus S i $ Operating cash flows (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Year 1 2 3 4 5 New Lathe Expenses (excluding depreciation and interest) $29,400 29,400 29,400 29,400 29,400 Revenue $38,000 39,000 40,000 41,000 42,000 AN Old Lathe Expenses (excluding depreciation and interest) $25,600 25,600 25,600 25,600 25,600 Revenue $36,400 36,400 36,400 36,400 36,400