Question
Please answer all parts to the question, and round to 2 decimal places where appropriate for a like! Thanks 1.a) Johnny's Lunches is considering purchasing
Please answer all parts to the question, and round to 2 decimal places where appropriate for a like! Thanks
1.a) Johnny's Lunches is considering purchasing a new, energy-efficient grill. The grill will cost $21,000 and will be depreciated straight-line over 4 years to a salvage value of zero. The grill will have no effect on revenues, but will save Johnny's $12,000 in energy expenses. The tax rate is 25 percent.
What are the operating cash flows in years 1 to 4?
b) Using the operating cash flow found above, calculate the NPV.
c) Given the net present value found, should the store be opened?
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