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answer this The Hub Store at a university in eastern Canada is considering purchasing a self - serve checkout machine similar to those used in
answer this The Hub Store at a university in eastern Canada is considering purchasing a selfserve
checkout machine similar to those used in many grocery stores and other retail
outlets. Currently the university pays parttime wages to students totalling $
per year. A selfserve checkout machine would reduce parttime student wages by
$ per year. The machine would cost $ and has a year useful life.
Total costs of operating the checkout machine would be $ per year, including
maintenance. Major maintenance would be needed on the machine in five years at a
total cost of $ The salvage value of the checkout machine in years would be
$
The CCA rate is Management requires a aftertax return on all equipment
purchases. The company's tax rate is
Required:
Determine the beforetax net annual cost savings that the new checkout machine
will provide.
Net annual cost savings
a Using the data from above and other data from the exercise, compute the
checkout machine's net present value. Hint Use Microsoft Excel to calculate the
discount factorsDo not round intermediate calculations and round your final
answer to the nearest dollar amount. Negative value should be indicated with
minus sign.
Net present value
b Would you recommend that the machine be purchased?
Yes
No
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