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Johnny s Lunches is considering purchasing a new, energy - efficient grill. The grill will cost $ 4 9 , 0 0 0 and will

Johnnys Lunches is considering purchasing a new, energy-efficient grill. The grill will cost $49,000 and will be depreciated straight-line over 3 years. It will be sold for scrap metal after 5 years for $12,250. The grill will have no effect on revenues but will save Johnnys $24,500 in energy expenses. The tax rate is 30%.
Required:
a. What are the operating cash flows in each year? Note: Do not round intermediate calculations. Round your answers to 2 decimal places.
b. What are the total cash flows in each year? Note: Negative amounts should be indicated with a minus sign. Do not round intermediate calculations. Round your answers to 2 decimal places.
c. Assuming the discount rate is 12%, calculate the net present value (NPV) of the cash flow stream. Should the grill be purchased? Note: Do not round intermediate calculations. Round your answer to 2 decimal places.

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