Dixie Chicken is considering installing a new Coke Freestyle machine in one of its franchise stores. The
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Question:
Dixie Chicken is considering installing a new Coke Freestyle machine in one of its franchise stores. The machine will cost $ today, and have an annual operational cost of $ The machine will increase store revenues by $ in the first year. The owner expects that the additional revenues will increase by per year going forward. The operational cost will remain at $ per year. Dixie Chicken has a cost of capital and will value this opportunity over years. What is the NPV of the new freestyle machine?
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