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Or Am (a) Uchumi Commercial Bank is considering installing a new automated teller machine in Spring Valley Shopping Centre. The machine is estimated to cost

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Or Am (a) Uchumi Commercial Bank is considering installing a new automated teller machine in Spring Valley Shopping Centre. The machine is estimated to cost sh 4.5 million and sh 1.5 million to install. It is estimated that it will save sh. 100 for each transaction processed through the ATM. The machines expected useful life is 10 years and it will handle 50,000 cash transactions per year. The cost of capital to finance the purchase of the ATM is estimated at 12%. 50, Required: As a director of strategy in the bank, you have been tasked to advice the management on this decision. (12 marks) 500

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