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Chrome - Do Homework - HW 3 (Chapter 4) Operations Management-PROD-315-5S8-202215 Homework: HW 3 (Chapter 4) Question 4, Problem 24 Partl of2 HW Score: 4_86 of 10 points O Points: O of 3 0 Save Darren Mack owns the "Gas n' Go' convenience store and gas statiom After hearing a marketing lecture, he realizes 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 n' Go' IS unable to qual fy for volume discounts on its gasoline purchases, and therefore cannot sell gasoline for prof t If the price is louvered. Each new pump Will cost $105,000 to Install, but Will Increase customer traffic in the store by 10,000 customers per year. Also, because the "Gas n' Go' would be selling Its gasoline at no prof t, Darren plans on Increas ng the profit margin on convenience store Items 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. Projected Convenience Store Year 2 3 4 5 Sales Per Customer $6 $6.50 $9 $10 $12 Projected Profit Margin 25% 35% a. What is the NPV of the next five years of cash flows If Darren had four new pumps Instal ed? NPV (Enter your response rounded to two decima] places.) Get more help Clear all Check answer