Essay
A bank can purchase an ATM (automated teller machine)for $110,000 that has an estimated life of 6 years.Maintenance over that period will begin at $2,500 annually and increase at a 10% rate.If the ATM is purchased,the bank will not be required to hire one additional (human)teller.Including fringe benefits,the teller costs $18,000 per year,and this amount is expected to increase 5% annually.If the bank's cost of capital is 10%,which alternative should be selected?
Correct Answer:
Verified
Correct Answer:
Verified
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