Question Help Operating cash inflows Afirm is considering renewing its equipment to meet increased demand for its product. The cost of equipment modifications is $1.95 million plus $118,000 in installation costs. The firm will depreciate the equipment modifications under MACRS, using a 5-year recovery period (see table !). Additional sales revenue from the renewal should amount to $121 million per year, and additional operating expenses and other costs (excluding depreciation and interest) will amount to 45% of the additional sales. The firm is subject to a lax rate of 40% (Note: Answer the following questions for each of the next 6 years) a. What incremental earnings before depreciation, interest and taxes will result from the renewal? h What incremental na rin ante atrave l from the real a. The incremental profits before depreciation and tax are (Round to the nearest dollar) b. Calculate the incremental net operating profits after taxes below. (Round to the nearest dollar) Enter any number in the edit fields and then continue to the next question ^ D 4/30/2020 Question Help from the renewal should amount to $121 million per year, and additional operating expenses and other costs (excluding depreciation and interest) will amount to 45% of the additional sales. The firm is subject to a lax rate of 40% (Note: Answer the following questions for each of the next years.) a. What incrementalarnings before depreciation interest and taxes will result from the renewal? b. What incremental net operating profits after taxes will result from the renewal? G. What incremental operating cash inflows Wires from the renewal? a. The incremental profits before depreciation and tax are $ (Round to the nearest dollar) b. Calculate the incremental net operating profits after taxes below (Round to the nearest dollar) Enter any number in the edit fields and then continue to the next question ^ 7:25 PM a/30/ - X Que 0 Data Table ount to from the renewal should additional sales. The fim a. What incremental eam b. What incremental net c. What incremental oper Recovery year 3 years 33% a. The incremental profits Percentage by recovery year 5 years 7 years 20% 14% 25% 19% 18% 12% 12% 12% 9% 45% 15% 7% 32% 10 years 10% 18% 14% 12% 9% b. Calculate the increme Year 99 Enter any number in the Print Done x Que Data Table ount ! renewal should sales. The fir ncrementalean incremental net ncremental oper 0 11 cremental profit ate the increme 4% Totals 100% 100% 100% 100% "These percentages have been rounded to the nearest whole percent to simplify calculations while retaining realism. To calculate the actual depreciation for tax purposes, be sure to apply the actual unrounded percentages or directly apply double-declining balance (200%) depreciation using the half-year convention number in the Print Done