Reference no: EM132383938

Paul is thinking about purchasing a soft drink machine and placing it in a business office. He knows that there is a 7.40 percent probability that someone who walks by the machine will make a purchase from the machine, and he knows that the profit on each soft drink sold is $0.10. If Paul expects 700 people per day to pass by the machine and requires a complete return of his investment in one year, then what is the maximum price that he should be willing to pay for the soft drink machine? Assume 250 working days in a year, and ignore taxes and the time value of money.