Expansion versus replacement cash flows Tesla Systems has estimated the cash flows over the 5-year lives for two projects, A and B. These cash flows are summarized in the following table. (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Initial investment Year 1 2 3 4 5 *After-tax cash inflow expected from liquidation. Year 0 1 2 3 4 LO 5 $ a. Calculate the relevant cash flows for this replacement decision: (Round to the nearest dollar.) Project A - $4,651,000 Relevant Cash Flows $ $ $ $ $ Project B $1,558,000* Operating cash flows $568,000 917,000 1,356,000 2,223,000 3,402,000 $374,000 374,000 374,000 374,000 374,000

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