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Johnny's Lunches is considering purchasing a new. energyefcient grill. The grill will cost $45000 and will be depreciated straight line over 3 years. It will
Johnny's Lunches is considering purchasing a new. energyefcient grill. The grill will cost $45000 and will be depreciated straight line over 3 years. It will be sold for scrap metal after 5 years for $11,250. The grill will have no effect on revenues but will save Johnny's $22,500 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? :. Assuming the discount rate is 10%, calculate the net present value (NPV} ofthe cash ow stream. Should the grill be purchased? Complete this question by entering your answers in the tabs below. Required A Required B Required C What are the operating cash ows in each year? {Do not round intermediate calculations. Round your answers to 2 decimal places.) Year Operating Cash Flows 2 Required A Required B Required C What are the total cash flows in each year? (Ne intermediate calculations. Round your answers Time Total Cash Flows N d 3Complete this question by entering your answers in the tabs Required .5. Required B Required C assuming the discount rate is 10%, calculate the net present value [I purchased? (Do not round intermediate calculations. Round your ans N F\"! of cash ow stream Should the grill be purchased? *1 Required B
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