the exercise individually on iLearn before the due date. Please include
group member names. You must show your work and complete all parts of
the problem to receive credit.
the due date.
energy-efficient grill. The grill will cost $40,000 and will be
depreciated according to the 3-year MACRS schedule (allowance
percentages 33%, 45%, 15%, 7%). It will be sold for scrap metal after 3
years for $10,000. The grill will have no effect on revenues but will
save Johnny’s $20,000 in energy expenses each year. The grill will
require an increase in net operating working capital of $2,000. The tax
rate is 35%.
What is the operating cash flow in year 1? The operating cash flow for
year 2 equals $19,300. The operating cash flow for year 3 equals
is 12%, should the grill be purchased?