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Sam Is Considering Purchase of a Vending Machine to Sell

Question 69

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Sam is considering purchase of a vending machine to sell sodas. The cost of the vending machine is $3,400. Sam estimates that the vending machine will last for five years and will provide net income of $800 each year for its lifetime. Sam is considering purchase of a vending machine to sell sodas. The cost of the vending machine is $3,400. Sam estimates that the vending machine will last for five years and will provide net income of $800 each year for its lifetime.

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a. NPV = -3,400 + 800/1.07 + 800/1.072 + ...

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