What are present values of the costs of acquiring one atm

Reference no: EM131941463

Question: A bank can purchase an additional ATM (automated teller machine) for $110.000 that has an estimated life of 6 years. Maintenance over that period will begin at $2, 500 annually and increase by 8% per year. The ATM can be depreciated to no value during its useful life and has no resale value at that time If the ATM is purchased, the bank will not be required to hire one additional (human) teller. Including fringe benefits, the teller costs $20,000 per year, and this amount is expected to increase 5% annually. On average, a teller leaves the position and needs to be replaced in four years The bank's cost of capital is 10%, and it pays the corporate tax rate of 35%. What are the present values of the costs of acquiring one ATM and of employing one teller? a- b- What are the equivalent annual costs of acquiring one ATM and of employing one teller? a- b- Which alternative should be selected? a- The ATM b- The Teller c- There is not enough information to determine the better alternative.

Reference no: EM131941463

Questions Cloud

Effective annual interest rate on the lending arrangement : What is your effective annual interest rate on the lending arrangement if you borrow $47 million immediately and repay it in one year?

Identify two techniques or methods to collect data : Identify at least two techniques, sources of data, or methods to collect data for each level.

Now plans to enter consumer electronic : Need help on below assignment. Can you help. "Micromax Corporation a company assembling and Marketing Mobile phone, after successful

Which bank do you select to deposit your money : A bank is offering to pay compound interest of 5% per year on new CD accounts. An e-bank is offering 5.5% per simple interest on a 5-year Savings account.

What are present values of the costs of acquiring one atm : What are the present values of the costs of acquiring one ATM and of employing one teller? a- b- What are the equivalent annual costs of acquiring one ATM.

Describe the methods you would use to recruit someone : Describe the methods you would use to recruit someone for this position. Think 'outside the box' and provide at least 4 suggestions

Which moral principle should we apply in the given case : Given what you read in this and the previous module, which moral principle should we apply in this case? Using real-world examples, and defend your answer.

Values and strategic goals in strategic plan : How to describe mission, vision, values and strategic goals in strategic plan.

Show the balance sheet of bank : Bank X currently has $ 500 million in transaction deposits on its balance sheet. The Federal Reserve has set the reserve requirement at 10% of transaction.

User Account

All Pages