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Assume it is January 2 0 1 8 and Johnny's Lunches is considering purchasing a new, energy - efficient grill. The grill will cost $

Assume it is January 2018 and Johnny's Lunches is considering purchasing a new, energy-efficient grill. The grill will cost $20,500 and will be depreciated in an asset class that carries a CCA rate of 30%. It will be sold for scrap metal after 3 years for $4,900. The grill will have no effect on revenues but will save Johnny's $11,300 in energy expenses. The firm has other assets in this asset class. The tax rate is 35%. Assume the discount rate is 11%.
a. What are the operating cash flows in years 1 to 3?(Do not round intermediate calculations. Round your answers to the nearest whole dollar.)
b. What are total cash flows in years 1 to 3?(Do not round intermediate calculations. Round your answers to the nearest whole dollar. Enter negative values with a minus sign.)
c. If the discount rate is 11%, should the grill be purchased?Assume it is January 2018 and Johnny's Lunches is considering purchasing a new, energy-efficient grill. The grill will cost $20,500 and
will be depreciated in an asset class that carries a CCA rate of 30%. It will be sold for scrap metal after 3 years for $4,900. The grill will
have no effect on revenues but will save Johnny's $11,300 in energy expenses. The firm has other assets in this asset class. The tax
rate is 35%. Assume the discount rate is 11%.
a. What are the operating cash flows in years 1 to 3?(Do not round intermediate calculations. Round your answers to the nearest
whole dollar.)
b. What are total cash flows in years 1 to 3?(Do not round intermediate calculations. Round your answers to the nearest whole
dollar. Enter negative values with a minus sign.)
C. If the discount rate is 11%, should the grill be purchased?
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