Question
A bank is considering a new check clearing machine to automate the clearing house function. The cost of the new machine and installation is $250000.
A bank is considering a new check clearing machine to automate the clearing house function. The cost of the new machine and installation is $250000. The machine is expected to last for 10 years.
| Check Clearing Machine Installed | 1 | ||
| Initial cost for each ATM | $235,000.00 | ||
| Installation cost for each ATM | $15,000.00 | ||
| # of transactions per year | 100,000 | ||
| Increase in transactions per year | 10.00% | ||
| Savings per transaction | $0.50 | ||
| Cost of capital | 12.00% |
What the Net Present Value of this investment, Round up to next Whole $ dollar.
Please show your work
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International Financial Management
Authors: Geert Bekaert, Robert J. Hodrick
4th International Edition
013284298X, 9780132842983
