Second National Bank Is Considering Adding 5 New ATM Machines

question 32

Multiple Choice

Second National Bank is considering adding 5 new ATM machines.Each machine costs $25,000 and installation costs are $15,000 per machine.Second National Bank expects the new machines to save $0.33 per transaction on 250,000 transactions per year on the new machines.It also expects the new machines to last for 15 years.If the bank needs to earn 14 percent return on this investment,what is the net present value of this investment?

• A)$506,729
• B)$306,729
• C)$272,269
• D)$381,729
• E)$424,228

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Definitions:

Tuition Expenses

Tuition expenses are the fees charged for instruction and training, typically at educational institutions such as colleges or universities.

Opportunity Cost

Opportunity cost refers to the value of the best alternative forgone when a decision is made to pursue a certain action.

Go to College

Refers to the process where individuals enroll and attend an institution of higher education, often to pursue a degree or additional training.

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