Johnny's Lunches is considering purchasing a new, energy-efficient grill. The grill will cost $33,000 and will bedepreciated straight-line over 3 years. It will be sold for scrap metal after 5 years for $8,250. The grill will have no effect on revenues but will save Johnny's $16,500 in energy expenses. The tax rate is 30%.

a.What are the operating cash flows in 1, 2,and 3 years?

b.What are the total cash flows in years 0, 1, 2, and 3?

c.Assuming the discount rate is 10%, calculate the net present value (NPV) of the cash flow stream.