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The local supermarket is considering investing in self-checkout kiosks for its customers. The self-checkout kiosks will cost $45,500 and have no residual value. Management expects
The local supermarket is considering investing in self-checkout kiosks for its customers. The self-checkout kiosks will cost $45,500 and have no residual value. Management expects the equipment to result in net cash savings over three years as customers grow accustomed to using the new technology: $15,000 the first year$18,000 the second year $26,000 the third year. Assuming a 14% discount rate, what is the NPV of the kiosk investment? Is this a favorable investment ? Why or why not?
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