A drug store is looking into the possibility of installing a 24/7-automated prescription refill system to increase its projected revenues by Php 1,000,000 per year over the next 5 years. Annual expenses to maintain the system are expected to be Php 250,000. The system will cost Php 2,500,000 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 Php 1,000,000 per year over the next 5 years. Annual expenses to maintain the system are expected to be Php 250,000. The system will cost Php 2,500,000 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.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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ECONOMICS (UPVOTE WILL BE GIVEN. PLEASE WRITE THE COMPLETE SOLUTIONS. NO LONG EXPLANATION. ANSWER IN2 DECIMAL PLACES. DRAW ALSO THE CASH FLOW DIAGRAM.)

A drug store is looking into the possibility of installing a 24/7-automated
prescription refill system to increase its projected revenues by Php 1,000,000 per
year over the next 5 years. Annual expenses to maintain the system are expected
to be Php 250,000. The system will cost Php 2,500,000 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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