Jose is thinking about purchasing a soft drink machine and placing it in a business office. He knows that there is a 5% probability that someone who walks by the machine will make a purchase from the machine, and he knows that the profit on each soft drink sold is $0.10. If Jose expeccts a thousand 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 that he should be willing to pay for the soft drink machine? Assume 250 working daysin a year, and ignore taxes and the time value of money.
Jose is thinking about purchasing a soft drink machine and placing it in a business office. He knows that there is a 5% probability that someone who walks by the machine will make a purchase from the machine, and he knows that the profit on each soft drink sold is $0.10. If Jose expeccts a thousand 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 that he should be willing to pay for the soft drink machine? Assume 250 working daysin a year, and ignore taxes and the time value of money.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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| Jose is thinking about purchasing a soft drink machine and placing it in a business office. He knows that there is a 5% probability that someone who walks by the machine will | ||||||||||||
| make a purchase from the machine, and he knows that the profit on each soft drink sold is $0.10. If Jose expeccts a thousand people per day to pass by the machine and requires | ||||||||||||
| a complete |
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| and ignore taxes and the |
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