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Johnny's Lunches is considering purchasing a new, energy-efficient grill. The grill will cost $45,000 and will be depreciated according to the 3-year MACRS schedule. It
Johnny's Lunches is considering purchasing a new, energy-efficient grill. The grill will cost $45,000 and will be depreciated according to the 3-year MACRS schedule. It will be sold for scrap metal after 3 years for $11,250. The grill will have no effect on revenues but will save Johnny's $22,500 in energy expenses per year. The tax rate is 30%. Use the MACRS depreciation schedule. a. What are the operating cash flows in each year? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Year Operating Cash Flows 20,249.55 21,750.75 b. What are the total cash flows in each year? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Time Total Cash Flows 45,000.00 20,249.55 21,750.75 0
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