Use the Following Information to Answer the Question(s)below

question 6

Multiple Choice

Use the following information to answer the question(s) below.
Two years ago,Krusty Krab Restaurant purchased a grill for $50,000.The owner,Eugene Krabs,has learned that a new grill is available that will cook Krabby Patties twice as fast as the existing grill.This new grill can be purchased for $80,000 and would be depreciated straight line over 8 years,after which it would have no salvage value.Eugene Krab expects that the new grill will produce EBITDA of $50,000 per year for the next eight years while the existing grill produces EBITDA of only $35,000 per year.The current grill is being depreciated straight line over its useful life of 10 years after which it will have no salvage value.All other operating expenses are identical for both grills.The existing grill can be sold to another restaurant now for $30,000.Krusty Krab's tax rate is 21%.
-The incremental cash flow that Krusty Krab will incur today (Year 0) if they elect to upgrade to the new grill is closest to:

• A)-$80,000.
• B)-$50,000.
• C)-$47,900.
• D)+$30,000.

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Definitions:

Center and Vertices

Key elements in geometry, specifically for ellipses and hyperbolas, where the center is the midpoint of the vertices (the major points).

Method of Substitution

A strategy for solving systems of equations by replacing variables with equivalent expressions to simplify the system.

System of Equations

A set of two or more equations with the same variables.

Method of Elimination

A technique used in solving systems of equations where one variable is eliminated by adding or subtracting the equations.