Question
A. ExpoRestaurant is considering the purchase of a$4,500,000flat top grill.The grill has an economic life of 6years and will be fully depreciated using the straight-line
A. ExpoRestaurant is considering the purchase of a$4,500,000flat top grill.The grill has an economic life of 6years and will be fully depreciated using the straight-line method.The grill is expected to produce 250,000tacos per year for the next 6years,with each costing$2to make and priced at$6.Assume the discount rate is 7%and the tax rate is21%.The restaurant expects the market value of the grill tobe$600,000,6yearsfrom now.
Calculate the initial cash outflow for the grill (e.g. the time 0 cash flow). (Enter a negative value and round to 2 decimals)
B. ExpoRestaurant is considering the purchase of a$4,500,000flat top grill.The grill has an economic life of 6years and will be fully depreciated using the straight-line method.The grill is expected to produce 250,000tacos per year for the next 6years,with each costing$2to make and priced at$6.Assume the discount rate is 7%and the tax rate is21%.The restaurant expects the market value of the grill tobe$600,000,6yearsfrom now.
Calculate the operating cash flow at the end of year 1. (Round to 2 decimals)
C. ExpoRestaurant is considering the purchase of a$4,500,000flat top grill.The grill has an economic life of 6years and will be fully depreciated using the straight-line method.The grill is expected to produce 250,000tacos per year for the next 6years,with each costing$2to make and priced at$6.Assume the discount rate is 7%and the tax rate is21%.The restaurant expects the market value of the grill tobe$600,000,6yearsfrom now.
Calculate the net present value for the project. (Round to 2 decimals)
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