Initial Cash Outflow Assignment | Homework For You

XYZ Restaurant is considering the purchase of a $2,500,000 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 150,000 tacos per year for the next 8 years, with each costing $1.50 to make and priced at $5. Assume the discount rate is 10% and the tax rate is 21%. The restaurant expects the market value of the grill to be $450,000, 8 years from now.

1. Calculate the initial cash outflow for the grill (e.g. the time 0 cash flow). (Enter a negative value and round to 2 decimals)Get Finance homework help today

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