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please answer question provided in word document below completley Johnny's Lunches is considering purchasing a new, energy-efficient grill. The grill will cost $35,000 and will
please answer question provided in word document below completley
Johnny's Lunches is considering purchasing a new, energy-efficient grill. The grill will cost $35,000 and will be depreciated according to the 3-year MACRS schedule. It will be sold for scrap metal after 3 years for $8,750. The grill will have no effect on revenues but will save Johnny's $17,500 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 1 Operating Cash Flows $ 2 3 b. What are the total cash flows in each year? (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 2 decimal places.) Time 0 Total Cash Flows $ 1 2 3 c. If the discount rate is 12%, should the grill be purchased? Yes No rev: 11_12_2015_QC_CS-32822Step by Step Solution
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