A subway system is considering buying automated ticket machines. Machines would cost 300k and result in savings of 365k over…

A subway system is considering buying automated ticket machines. Machines would cost 300k and result in savings of 365k over 5yrs. Reduces human ticket sellers.

Additional information here: This is the annual savings; patron can use credit or debit cards and reduces amount of human ticket sellers. If the cost of capital is 8%, should the city purchase the ticket selling machines? Justify your answer

Year 1 Cost savings: 50k

Year 2 Cost savings: 60k

Year 3 Cost savings: 75k
Year 4 Cost savings: 90k

Year 5 Cost savings: 90k

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