Question
Robert is thinking about purchasing a soft drink machine and placing it in a business office. He knows that there is a 13% probability that
Robert is thinking about purchasing a soft drink machine and placing it in a business office. He knows that there is a 13% probability that someone who walks by the machine will make a purchase from the machine, and he knows that the profit on each drink sold is $0.10. If Robert expects 700 people per day to pass by the machine and requires a complete return of his investment in one year, then what is the maximum price he should be willing to pay for the soft drink machine? Assume 250 working days in a year, and ignore taxes and the time value of money.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started