$1.$ Johnny's Lunches is considering purchasing a new, energy$-$efficient grill. The grill will cost $$24,000$ and will be depreciated straight$-$line over $4$ years to a salvage value of zero. The grill will have no effect on revenues, but will save Johnny's $$8,000$ in energy expenses. The tax rate is $25$ percent.

What are the operating cash flows in years $1$ to $4?$

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Correct response: $7,500$

$2.$I f the discount rate is $12$ percent, what is the net present value of the grill?

Use $$7,500$ for operating cash flow.

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