Question: Dixie Chicken is considering installing a new Coke Freestyle machine in one of its franchise stores. The machine will cost $5,238.00 today, and have an

Dixie Chicken is considering installing a new Coke Freestyle machine in one of its franchise stores. The machine will cost $5,238.00 today, and have an annual operational cost of $1,353.00. The machine will increase store revenues by $2,541.00 in the first year. The owner expects that the additional revenues will increase by 3.00% per year going forward. The operational cost will remain at $1,353.00 per year. Dixie Chicken has a 11.00% cost of capital and will value this opportunity over 5.00 years.

What is the NPV of the new freestyle machine?

Answer Format: Currency: Round to: 2 decimal places.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

#38 Dixie Chicken is considering installing a new Coke Freestyle machine in one of its franchise stores. The machine will cost $7,286.00 today, and have an annual operational cost of $1,459.00. The...

Dixie Chicken is considering installing a new Coke Freestyle machine in one of its franchise stores. The machine will cost $ 5 , 8 3 9 . 0 0 today, and have an annual operational cost of $ 1 , 2 8 3...

Dixie Chicken is considering installing a new Coke Freestyle machine in one of its franchise stores. The machine will cost $6,153.00 today, and have an annual operational cost of $1,523.00. The...

Dixie Chicken is considering installing a new Coke Freestyle machine in one of its franchise stores. The machine will cost $ 5 , 6 4 2 . 0 0 today, and have an annual operational cost of $ 1 , 1 9 8...

Dixie Chicken is considering installing a new Coke Freestyle machine in one of its franchise stores. The machine will cost $7,890.00 today, and have an annual operational cost of $1,473.00. The...

Dixie Chicken is considering installing a new Coke Freestyle machine in one of its franchise stores. The machine will cost $ 7 , 2 9 4 . 0 0 today, and have an annual operational cost of $ 1 , 5 6 3...

key macro environmental trends? Cola Wars Continue: Coke and Pepsi in 2010 For more than a century, Coke and Pepsi vied for "throat share" of the world's beverage market. The most intense battles in...

Identify the major participants (i.e., suppliers, buyers, competitors, substitutes and potential new entrants) in the carbonated soft drink industry? Cola Wars Continue: Coke and Pepsi in 2010 For...

Conduct an industry analysis of this case before 2009 using Porter's 5-Forces Model. (3) Given the strengths of the other Industry Forces, is the level of rivalry what you would expect? Why or why...

Which of the two options do you think has the most potential to franchise as a franchisee ? Which of the two concepts do you think has the most to franchise as a franchsior? Use figures from the case...

The current in electric lamp is 5 Ampere, now find the quality of electricity flow towards the filament in 6 minutes ?

Worldwide production of wind power by number of turbines, by country, was recorded as follows: (0) (ii) Server No. of problems United States China Spain Germany India Canada UK France Italy Calculate...

Gomez Corporation, a manufacturer of household paints, is preparing annual financial statements at December 3 1 , 2 0 1 9 . Because of a recently proven health hazard in one of its paints, the...

Draw a class diagram and its relationship based on the following statements. You can use any UML tool/software to represent your class diagram. Do NOT copy and paste your diagram, use the attachment...