Question
Fuzzy Restaurant is considering the purchase of a $3,500,000 flat top grill. The grill has an economic life of 7 years and will be fully
Fuzzy Restaurant is considering the purchase of a $3,500,000 flat top grill. The grill has an economic life of 7 years and will be fully depreciated using the straight-line method. The grill is expected to produce 125000 tacos per year for the next 7 years, with each costing $2 to make and priced at $6.50. Assume the discount rate is 9% and the tax rate is 21%.
Calculate the after-tax salvage value at the end of year 8. (Round to 2 decimals)
Calculate the initial cash outflow for the grill (e.g. the time 0 cash flow). (Enter a negative value and round to 2 decimals)
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