Question
In: Finance
Mad Taco is considering the purchase of a $1,500,000 flat top grill. The grill has an...
Mad Taco is considering the purchase of a $1,500,000 flat top grill. The grill has an economic life of 8 years and will be fully depreciated using straight line method. The grill is expected to produce 59,000 tacos per year for the next 8 years, with each costing $1.50 to make and priced at $5. Assume the discount rate is 8% and the tax rate is 21%. Mad Taco expects the market value of the grill to be $200,000, 8 years from now. Find the following:
a.) Calculate the net present value for the project (round to 2 decimals)
b.) Calculate the operating cash flow at the end of year 1 (enter a negative value and round to 2 decimals)
c.) Calculate the initial cash outflow for the grill (i.e. the time 0 cash flow) (enter a negative value and round to 2 decimals)
d.) Calculate the after tax salvage value at the end of year 8 (round to 2 decimals)
e.) Calculate the annual depreciation value for the grill (round to 2 decimals)
f.) Calculate the book value of the grill at the end of year 5 (round to 2 decimals)
Solutions
jeff jeffy answered 1 year agoRelated Solutions
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