Johnnys Lunches is considering purchasing a new, energy-efficient grill. The grill will cost $30,000 and will be depreciated straight-line over 3 years. It will be sold for scrap metal after 5 years for $7,500. The grill will have no effect on revenues but will save Johnnys $15,000 in energy expenses. The tax rate is 30%.

Required: Assuming the discount rate is 10%, calculate the net present value (NPV) of the cash flow stream. Should the grill be purchased?

Year	Operating Cash Flows
1	$13,500.00
2	$13,500.00
3	$13,500.00

Time	Total Cash Flows
0	$(30,000.00)
1	$13,500.00
2	$13,500.00
3	$13,500.00

NPV of cash flow stream	???
Should the grill be purchased?	Yes