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# A bank can purchase an ATM (automated teller machine) for \$110,000 that has an estimated life of 6 years. Maintenance over that period will begin at...

A bank can purchase an 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 at a 10% rate. If the ATM is purchased the bank will not be required to hire one additional (human) teller. Including fringe benefits, the teller costs \$18,000 per year, and this amount is expected to increase 5% annually. If the bank's cost of capital is 10%, which alternative should be selected?

Statement of proposal evaluation: Option A:
Annual maintenace cost (\$) present value(\$)
@10%
2500.00
2272.50
2750.00
2271.50
3025.00
2271.78
3327.50
2272.68
3660.25
2273.02
4026.28
2270.82 Total...

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