Question: The local Giant Tiger department store is considering investing in
The local Giant Tiger department store is considering investing in self-checkout kiosks for its customers. The self-check-out kiosks will cost $45,000 and have no residual value. Management expects the equipment to result in net cash savings over three years as customers grow accustomed to using the new technology: $14,000 the first year; $19,000 the second year; $24,000 the third year. Assuming a 10% discount rate, what is the NPV of the kiosk investment? Is this a favourable investment? Why or why not?
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