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per year for all five systems. Is this a good investment ? Why ?

per year for all five systems. Is this a good investment ? Why ?

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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ABC Subs does well delivering sandwiches to college students. The owner is installing five portables in-car systems to increase sales. Each system costs $2,600, has 6-year life, and salvage value of $400. The operating cost for all systems is $300 for the first year, increasing by $80 per year. The ROI is 10%. Perform annual worth analysis for the owner, answering: Estimated sales increase is $3,600 per year for all five systems. Is this a good investment ? Why ?
Transcribed Image Text:ABC Subs does well delivering sandwiches to college students. The owner is installing five portables in-car systems to increase sales. Each system costs $2,600, has 6-year life, and salvage value of $400. The operating cost for all systems is $300 for the first year, increasing by $80 per year. The ROI is 10%. Perform annual worth analysis for the owner, answering: Estimated sales increase is $3,600 per year for all five systems. Is this a good investment ? Why ?
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