Question
Assume it is January 2018 and Johnny's Lunches is considering purchasing a new, energy-efficient grill. The grill will cost $19,200 and will be depreciated in
Assume it is January 2018 and Johnny's Lunches is considering purchasing a new, energy-efficient grill. The grill will cost $19,200 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 $3,600. The grill will have no effect on revenues but will save Johnny's $10,800 in energy expenses. The firm has other assets in this asset class. The tax rate is 35%. Assume the discount rate is 14%. a. What are the operating cash flows in years 1 to 3?
the operating cash flow in year 2018 | $ |
the operating cash flow in year 2019 | $ |
the operating cash flow in year 2020 | $ |
b.What are total cash flows in years 1 to 3?
the total cash flow in year 2018 | $ |
the total cash flow in year 2019 | $ |
the total cash flow in year 2020 | $ |
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