ohnny's Lunches is considering purchasing a new, energy-efficient grill. The grill will cost $39,000 and will be depreciated according to the 3-year MACRS schedule. It will be sold for scrap metal after 3 years for $9,750. The grill will have no effect on revenues but will save Johnny's $19,500 in energy expenses per year. The tax rate is 30%. Use theMACRS depreciation schedule.<\/p>
<\/p>
a.<\/strong>What are the operating cash flows in each year?(Do not round intermediate calculations. Round your answers to 2 decimal places.)<\/strong><\/p> <\/p> Year | Operating Cashflow<\/p> 1 ?<\/p> 2 ?<\/p> 3 ?<\/p> <\/p> <\/p> b.<\/strong>What are the total cash flows in each year?(Do not round intermediate calculations. Round your answers to 2 decimal places.)<\/strong><\/p> <\/p> <\/p> <\/p> Time | Total cash Flows<\/p> 0 ?<\/p> 1 ?<\/p> 2 ?<\/p> 3 ?<\/p> <\/p> c.<\/strong>Assuming the discount rate is 10%, calculate the net present value (NPV) of the cash flow stream. Should the grill be purchased?(Do not round intermediate calculations. Round your answer to 2 decimal places.)<\/strong><\/p> <\/p> NPV of cash flow stream?<\/p> Show the grill be purchased?<\/p>",
"transcribed_text": "",
"related_book": {
"title": "Horngrens Financial and Managerial Accounting",
"isbn": "9780133851281, 013385129x, 9780134077321, 133866297, 133851281, 9780133851298, 134077326, 978-0133866292",
"edition": "5th edition",
"authors": "Tracie L. Nobles, Brenda L. Mattison, Ella Mae Matsumura",
"cover_image": "https:\/\/dsd5zvtm8ll6.cloudfront.net\/si.question.images\/book_images\/467.jpg",
"uri": "\/textbooks\/horngrens-financial-and-managerial-accounting-5th-edition-467",
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},
"free_related_book": {
"isbn": "354006849X",
"uri": "\/textbooks\/operating-systems-proceedings-of-an-international-symposium-held-at-rocquencourt-april-23-25-1974-1st-edition-978-3540068495-316005",
"name": "Operating Systems Proceedings Of An International Symposium Held At Rocquencourt April 23 25 1974",
"edition": "1st Edition"
},
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