Possibility of buying several coin-operated vending machines

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Reference no: EM13941142

Leila Liverpool is looking into the possibility of buying several coin-operated vending machines and placing them in the local hospitals. Each machine costs $3200, which she will depreciate on a straight-line basis over 10 years. The machine will dispense Coke cans at $1.50 each and Coca Cola Company will replenish them at 65 cents each. Each machine is expected to sell 450 cans a month. The hospitals will provide the space and electricity for the machines for $325 a month at the end of every month. The tax rate of Leila Liverpool is 30% and the after-tax cost of capital 15%. Assume that the income and bills occur at the end of each month, but she pays the taxes annually. Should Leila Liverpool get into this venture?

Reference no: EM13941142

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Possibility of buying several coin-operated vending machines : Leila Liverpool is looking into the possibility of buying several coin-operated vending machines and placing them in the local hospitals. Each machine costs $3200, which she will depreciate on a straight-line basis over 10 years. Assume that the inco..

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