What is the net present value of the grill

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Johnny's Lunches is considering purchasing a new, energy-efficient grill. The grill will cost $33,000 and will be depreciated straight-line over 8 years to a salvage value of zero. The grill will have no effect on revenues, but will save Johnny's $9,000 in energy expenses. The tax rate is 36 percent.

Question: If the discount rate is 11 percent, what is the net present value of the grill? Use $7,245 for operating cash flow.

Reference no: EM133058375

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