Question: Johns lunches is considering purchasing a new energy efficient grill. The grill will cost 30,000 and will be depreciated according to the 3 year macrs

Johns lunches is considering purchasing a new energy efficient grill. The grill will cost 30,000 and will be depreciated according to the 3 year macrs schedule. It will be sold for scrap metal after 3 years for 7500. The grill will have no effect on revenues but will save johnnys 15000 in energy expenses. The tax rate is 30%.

What are the operating cash flows in each year?

What are the total cash flows each year?

If the discount rate is 10% should the grill be purchased?

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