The local supermarket is considering investing in self-checkout kiosks for its customers. The self-checkout kiosks...
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Accounting
The local supermarket is considering investing in self-checkout kiosks for its customers. The self-checkout kiosks will cost
$46,000
and have no residual value. Management expects the equipment to result in net cash savings over three years as customers grow accustomed to using the new technology:
$17,000
the first year;
$20,000
the second year;
$27,000
the third year. Assuming a
10%
discount rate, what is the NPV of the kiosk investment? Is this a favorable investment? Why or why not?
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