Should the atm booth set up new atm

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The cost of establishing a new ATM booth is $80,000 which has a cost of capital of 8%. The bank estimates that this will lead to a cost reduction of $1.8 per cash transaction and is expected to be in use for the next 5 years with number of cash transactions processed each year from year one to year five to be 8,000, 12,000, 16,000, 22,000 and 28,000 respectively. Should the ATM booth set up this new ATM? Justify the answer.

Reference no: EM132613950

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