A drug store is looking into the possibility of installing a 24/7-automated prescription refill system to increase its projected revenues by $20,000 per year over the next 5 years. Annual expenses to maintain the system are expected to be $5,000. The system will cost $50,000 and will have no market value at the end of the 5-year study period. The store’s MARR is 20% per year. Use the AW method to evaluate this investment.
A drug store is looking into the possibility of installing a 24/7-automated prescription refill system to increase its projected revenues by $20,000 per year over the next 5 years. Annual expenses to maintain the system are expected to be $5,000. The system will cost $50,000 and will have no market value at the end of the 5-year study period. The store’s MARR is 20% per year. Use the AW method to evaluate this investment.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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A drug store is looking into the possibility of installing a 24/7-automated prescription refill system to increase its projected revenues by $20,000 per year over the next 5 years. Annual expenses to maintain the system are expected to be $5,000. The system will cost $50,000 and will have no market value at the end of the 5-year study period. The store’s MARR is 20% per year. Use the AW method to evaluate this investment.
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