Question: Robert is thinking about purchasing a soft drink machine and placing it in a business office. He knows that there is a 13% probability that
Robert is thinking about purchasing a soft drink machine and placing it in a business office. He knows that there is a 13% probability that someone who walks by the machine will make a purchase from the machine, and he knows that the profit on each drink sold is $0.10. If Robert expects 700 people per day to pass by the machine and requires a complete return of his investment in one year, then what is the maximum price he should be willing to pay for the soft drink machine? Assume 250 working days in a year, and ignore taxes and the time value of money.
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
