Question: First National Bank of Conway is considering installing two ATMs
First National Bank of Conway is considering installing two ATMs in its Southside branch. The new machines are expected to cost $37,000 apiece. Installation costs will amount to about $15,000 per machine. Each machine has a projected useful life of 10 years. Due to rapid growth in the Southside district, these two machines are expected to handle 50,000 cash transactions per year. On average, each cash transaction is expected to save 30 cents in teller expenses. If First National has a 10 percent cost of capital, should the bank proceed with this investment project?
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