1 answer

A local government awards a landscaping company a contract worth $1.40 million per year for five...

Question:

A local government awards a landscaping company a contract worth $1.40 million per year for five years for maintaining public

A local government awards a landscaping company a contract worth $1.40 million per year for five years for maintaining public parks. The landscaping company will need to buy some new machinery before they can take on the contract. If the cost of capital is 5%, what is the most that this equipment could cost if the contract is to be worthwhile for the landscaping company? A. $5.46 million B. $6.36 million C. $5.76 million OD. $6.06 million

Answers

Information provided:

Annual payment= $1.40 million

Time= 5 years

Yield to maturity= 5%

The question is calculated by computing the present value.

Enter the below in a financial calculator to compute the present value:

PMT= 1.40

I/Y= 5

N= 5

Press the CPT key and PV to compute the present value.

The value obtained is 6.06

Therefore, the equipment will cost $6.06 million.

Hence, the answer is option d.   

In case of any query, kindly comment on the solution.

.

Similar Solved Questions

1 answer
Two point charges are located on the x-axis. One has a charge of 1.15 μC and...
Two point charges are located on the x-axis. One has a charge of 1.15 μC and is located at x = 0.0 m, and the other has a charge of -3.73 μC and is located at x = 15.1 m. At what location on the x-axis (other than at infinity) would the electric force on a third point charge of 3.32 μC be z...
1 answer
Sort the numbers: 2, 1, 4, 5, 7, 1, 7, 11, 8, 9 using the counting...
Sort the numbers: 2, 1, 4, 5, 7, 1, 7, 11, 8, 9 using the counting sort....
1 answer
Use log 67 = 1.946 and/or log 58= 2.079 to find logba logoő-0
Use log 67 = 1.946 and/or log 58= 2.079 to find logba logoő-0...
1 answer
Describe how much evidence should be examined and research completed on an assessment tool before it...
Describe how much evidence should be examined and research completed on an assessment tool before it is used in a clinical setting, and why? Consider the impact of a poorly tested assessment tool on ethnic and other diverse groups. For example, if an assessment tool has not been tested with diverse ...
1 answer
For the Cluster Random Sampling technique, give the steps that are required and identify the step(s)...
For the Cluster Random Sampling technique, give the steps that are required and identify the step(s) in which randomness plays a role for this technique. give at least one advantage, at least one disadvantage, give an example showing how randomization can help this sampling avoid bias....
1 answer
How would you define entropy of a system?
How would you define entropy of a system?...
1 answer
Compute the dollar amount of current assets based on the following account balances. Accounts Receivable Accumulated...
Compute the dollar amount of current assets based on the following account balances. Accounts Receivable Accumulated Depreciation-Equipment Cash Equipment Prepaid Rent Short-term Investments $22,000 27,000 8,400 93,000 7,000 15,000 Current assets amount $...
1 answer
When are menu selection and form fill‐in more appropriate than direct manipulation?
When are menu selection and form fill‐in more appropriate than direct manipulation?...
1 answer
How does exposure to air, light, and temperature affect vitamin c?
how does exposure to air, light, and temperature affect vitamin c?...
1 answer
Exercise 6-34 Estimating Cost Behavior by Multiple Methods (Appendix) (LO 6-1, 6-2, 6-5, 6-9) Gator Beach...
Exercise 6-34 Estimating Cost Behavior by Multiple Methods (Appendix) (LO 6-1, 6-2, 6-5, 6-9) Gator Beach Marts, a chain of convenience grocery stores in the Fort Lauderdale area, has store hours that fluctuate from month to month as the tourist trade in the community varies. The utility costs for o...
1 answer
Through what potential difference AV must electrons be accelerated (from rest) so that they will have...
Through what potential difference AV must electrons be accelerated (from rest) so that they will have the same wavelength as an X-ray of wavelength 0.145 nm ? Use 6.63x10-34 J·s for Planck's constant, 9.11x10-31 kg for the mass of an electron, and 1.60x10-19 C for the charge on an electro...
1 answer
3- The T-beam is subjected to the distributed loading that is applied along its centerline Find...
3- The T-beam is subjected to the distributed loading that is applied along its centerline Find the principle stresses at points A and B and show the results on elements located at each of these points....
1 answer
More than 50 users who run Windows 10 are certain they need to purchase additional disks...
More than 50 users who run Windows 10 are certain they need to purchase additional disks because they are nearly out of space. However, the budget is tight and it is important to eliminate unnecessary purchases. What options can you explain to them before their department heads order new disks?...
1 answer
A Digital Signal Processing system is taking at its input the following analogue signal s(t); s(t)...
A Digital Signal Processing system is taking at its input the following analogue signal s(t); s(t) - 20+ 20 cos(24xt)cos(xt), Where time t is expressed in ms. Part 1 - Setting the sampling frequency: (11 Marks) As a start, the system comprises only a sampler and an ideal analogue reconstructor as fo...
1 answer
How do you write #y-7/2=1/2(x-4)# in slope intercept form?
How do you write #y-7/2=1/2(x-4)# in slope intercept form?...
1 answer
Using the financial data for the sample of Healthcare companies in the table below, calculate the...
Using the financial data for the sample of Healthcare companies in the table below, calculate the number of companies with a Return on Equity greater than 8%. QUESTION 2 10 points Save Answer Using the financial data for the sample of Healthcare companies in the table below, calculate the number of ...
1 answer
#1 Vector A has a magnitude of 5 and is directed at 33 degrees counter-clockwise from...
#1 Vector A has a magnitude of 5 and is directed at 33 degrees counter-clockwise from the +x axis. Vector B has a magnitude of 6 and is directed at 111 degrees counter- clockwise from the +x axis. Vector C has a magnitude of 7 and is directed at 180 degrees counter-clockwise from the +x axis. Lastly...
1 answer
An expensive watch is powered by a 3-volt lithium battery expected to last five years. Suppose...
An expensive watch is powered by a 3-volt lithium battery expected to last five years. Suppose the life of the battery has a standard deviation of 0.7 year and is normally distributed. a. Determine the probability that the watch's battery will last longer than 5.2 years. b. Calculate the probabi...