# Question

The local supermarket is considering investing in self- checkout kiosks for its customers. The self- checkout kiosks will cost $ 46,000 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: $ 12,000 the first year; $ 19,000 the second year; $ 26,000 the third year. Assuming a 10% discount rate, what is the NPV of the kiosk investment? Is this a favorable investment? Why or why not?

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