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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, energyefficient grill. The grill will cost $ and will be depreciated straightline over years. It will be sold for scrap metal after years for $ The grill will have no effect on revenues but will save Johnnys $ in energy expenses. The tax rate is
Required:
a What are the operating cash flows in each year? Note: Do not round intermediate calculations. Round your answers to 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 decimal places.
c Assuming the discount rate is 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 decimal places.
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