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Homework: Chapter 4 Save Score: 0 of 1 pt 4 of 43 complete > HW...

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Accounting

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Homework: Chapter 4 Save Score: 0 of 1 pt 4 of 43 complete > HW Score:75%, 3 of 4 pts Question Help Problem 24 Darren Mack owns the "Gasn'Go convenience store and gas station. After hearing a marketing lecture, he realize that it might be possible to draw more customers to his high-margin convenience store by selling his gasoline at a lower price. However, the "Gas 'Go' is unable to qualify for volume discounts on its gasoline purchases and therefore cannot selgasoline for profit if the price is lowered Each new pump will cost $120,000 to instal, but will increase customer traffic in the store by 12,000 customers per you. Also, because the "Gas Go' would be selling its gasoline at no profit, Darren plans on increasing the profit margin on convenience store s incrementally over the next five years. Assume a discount rate of 7 percent. The projected convenience store sales per customer and the projected profit margin for the next five years are given in the table below A Projected Convenience Store Projected Profit Year Sales Per Customer Margin $650 What is the NPV of the next five years of cash flows if Darren had five new pumps installed? NPV =$ (Enter your response rounded to two decimal places)

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