You run a small bagel shop and are considering replacing your four employees with automated machines that allow customers to buy their bagels without any human interaction. Of the following, the most difficult task you face in computing the NPV of this change is the:
A) Estimation of the reduction in wages you will have from the decrease in work force.
B) Estimation of the reduction in taxes you will get from the increase in depreciation.
C) Estimation of the cost of purchasing the new equipment.
D) Estimation of the cost of installing the new equipment.
E) Estimation of the total change in sales that will result from the change.

Question

Quizplus · Accepted Answer

Estimating the total change in sales that will result from the change is the most difficult task because it involves predicting customer behavior and preferences, which are uncertain and can be influenced by many unpredictable factors.

You Run a Small Bagel Shop and Are Considering Replacing