A drug store is looking into the possibility of installing a 24/7-automatedprescription refill system to increase its projected revenues by $20,000 per year over the next 5 years. Annual expenses to maintain the system are expected to be $5,000. The system will cost $50,000 and will have no market value at the end of the 5-year study period. The store’s expected rate of return is 20% per year. Use the AW method to evaluate this investment. What is the annual worth? Is it a desirable investment? *

ENGR.ECONOMIC ANALYSIS
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ISBN:9780190931919
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Chapter1: Making Economics Decisions
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A drug store is looking into the possibility of installing a 24/7-automatedprescription refill system to increase its projected revenues by $20,000 per year over the next 5 years. Annual expenses to maintain the system are expected to be $5,000. The system will cost $50,000 and will have no market value at the end of the 5-year study period. The store’s expected rate of return is 20% per year. Use the AW method to evaluate this investment. What is the annual worth? Is it a desirable investment? *

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