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Operating cash flows Richard and Linda Thomson operate a local lawn maintenance service for commercial and residential property. They have been using a John Deere riding mower for the past several years and believe that it is time to buy a new one. They would like to know the operating cash flows associated with the replacement of the old riding mower. The following data are available. 1. There are 5 years of remaining useful life on the old mower. 2. The old mower has a zero book value. 3. The new mower is expected to last 5 years, 4. The Thomsons will follow a 5-year MACRS recovery period for the new mower, 5. Depreciable value of the new lawn mower is $1,730. 6. They are subject to a 40% tax rate 7. The new mower is expected to be more fuel-efficient, maneuverable, and durable than the previous models and can result in reduced operating expenses of S502 per year. 8. The Thomsons will buy a maintenance contract that calls for annual payments of $119. Create an operating cash flow statement for the replacement of Richard and Linda's John Deere riding mower. Show the operating cash flow for the next 6 years. Calculate the incremental operating cash flow statement below: (Round to the nearest dollar.) Richard and Linda Thomson Incremental Operating Cash Flows Replacement of John Deere Riding Mower Year 1 Savings from new and improved mower $ Less: Annual maintenance cost Less: Depreciation $ Savings (los) before taxes Taxes (40%) Savings (loss) after taxes Incremental operating cash flow Enter any number in the edit fields and then click Check Answer. ? 5 parts Clear All Check Answer remaining Operating cash flows Richard and Linda Thomson operate a local lawn maintenance service for commercial and residential property. They have been using a John Deere riding mower for the past several years and believe that it is time to buy a new one. They would like to know the operating cash flows associated with the replacement of the old riding mower. The following data are available. 1. There are 5 years of remaining useful life on the old mower. 2. The old mower has a zero book value. 3. The new mower is expected to last 5 years, 4. The Thomsons will follow a 5-year MACRS recovery period for the new mower, 5. Depreciable value of the new lawn mower is $1,730. 6. They are subject to a 40% tax rate 7. The new mower is expected to be more fuel-efficient, maneuverable, and durable than the previous models and can result in reduced operating expenses of S502 per year. 8. The Thomsons will buy a maintenance contract that calls for annual payments of $119. Create an operating cash flow statement for the replacement of Richard and Linda's John Deere riding mower. Show the operating cash flow for the next 6 years. Calculate the incremental operating cash flow statement below: (Round to the nearest dollar.) Richard and Linda Thomson Incremental Operating Cash Flows Replacement of John Deere Riding Mower Year 1 Savings from new and improved mower $ Less: Annual maintenance cost Less: Depreciation $ Savings (los) before taxes Taxes (40%) Savings (loss) after taxes Incremental operating cash flow Enter any number in the edit fields and then click Check Answer. ? 5 parts Clear All Check Answer remaining

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