Kim Epson operates a full-service car wash, which operates from 8AM to 8 PM seven days a week. The car wash has two stations an automatic washing and drying station that can handle 30 cars per hour and an interior cleaning station that can handle 210 cars per day Based on a recent year-end Neview of operations, Kim estimates that future demand for the interior cleaning station for the seven days of the week, expressed in the average number of cars per day would be as follows Day Cars Kim Mon 160 Tues 180 Wed 150 Thurs 140 FIL 270 Sat 250 Sun 250 By installing additional equipment (at a cost of $30,000) Kim can increase the capacity of the interior cleaning to 300 cars per day Each car wash generates a pretax contribution of $3.00 Should Kim install the additional equipment if she expects a pretax payback period of three years or less? install the additional equipment because the payback period is years (Enter your response rounded to be decimal places)
Kim Epson operates a full-service car wash, which operates from 8AM to 8 PM seven days a week. The car wash has two stations an automatic washing and drying station that can handle 30 cars per hour and an interior cleaning station that can handle 210 cars per day Based on a recent year-end Neview of operations, Kim estimates that future demand for the interior cleaning station for the seven days of the week, expressed in the average number of cars per day would be as follows Day Cars Kim Mon 160 Tues 180 Wed 150 Thurs 140 FIL 270 Sat 250 Sun 250 By installing additional equipment (at a cost of $30,000) Kim can increase the capacity of the interior cleaning to 300 cars per day Each car wash generates a pretax contribution of $3.00 Should Kim install the additional equipment if she expects a pretax payback period of three years or less? install the additional equipment because the payback period is years (Enter your response rounded to be decimal places)
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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Transcribed Image Text:Kim Epson operates a full-service car wash, which operates from 8AM to 8 PM seven days a week. The car wash has two stations an automatic washing and drying station that can handle 30 cars per hour
and an interior cleaning station that can handle 210 cars per day Based on a recent year-end Neview of operations, Kim estimates that future demand for the interior cleaning station for the seven days of the
week, expressed in the average number of cars per day, would be as follows
Day
Cars
Kim
Mon
160
Tues
180
Wed
150
Thurs
140
Fri
270
Sat
250
fly instaling additional equipment (at a cost of $30,000) Kim can increase the capacity of the interior cleaning to 300 cars per day Each car wash generates a protax contribution of $1.00 Should Kim install the
additional equipment if she expects a pretax payback penod of three years or less?
install the additional equipment because the payback period is
Sun
250
years (Enter your response rounded to be decimal places)
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