Answer Happy

c) A large retailer is going to run an experiment at one of its stores to see how cost effective it will be to imbed merchandise with a small radio frequency identification (RFID) chip. Shoppers will select items from the store and walk out without stopping to pay at a checkout lane. The RFID chips will record what items are taken and will automatically deduct their price from shopper's bank accounts. The retailer expects to save the cost of staffing 12 checkout lanes, which amount RM100,000 per year. Scrutinise how much can the retailer afford to spend on its RFID investment if the system has a life of 10 years and no residual value. The retailer's interest rate is 12% per year. Please provides a cash flow diagram to support your answer.