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What are the operating cash flows in years 1 to 9

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Johnny's Lunches is considering purchasing a new, energy-efficient grill. The grill will cost $19,000 and will be depreciated straight-line over 9 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 32 percent.

a) What are the operating cash flows in years 1 to 9?

b) If the discount rate is 14 percent, what is the net present value of the grill? Use the correct value for operating cash flow.

Reference no: EM132569537

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