Johnny's Lunches is considering purchasing a new, energy$-$efficient grill. The grill will cost $$50,000$ and will be depreciated straight$-$

line over $3$ years. It will be sold for scrap metal after $5$ years for $$12,500.$ The grill will have no effect on revenues but will save Johnny's

$$25,000$ in energy expenses. The tax rate is $30\%.$

Required:

a$.$ What are the operating cash flows in each year?

b$.$ What are the total cash flows in each year?

c$.$ Assuming the discount rate is $11\%,$ calculate the net present value $($NPV$)$ of the cash flow stream. Should the grill be purchased?

Complete this question by entering your answers in the tabs below.

What are the operating cash flows in each year?

Note: Do not round intermediate calculations. Round your answers to $2$ decimal places.