Meals on Wheels are considered two contracts to renovate its facilities. The first contractor wants $20,000 for

Question:

Meals on Wheels are considered two contracts to renovate its facilities. The first contractor wants $20,000 for the job and, with a maintenance fee of $1,000 per year, will guarantee the repairs for five years. The second contractor wants $14,000 for the same project and, with a maintenance fee of $1,500 per year, will guarantee the project for four years. Assuming a of 8%, which option is the better deal for Meals on Wheels? Why?
Discount Rate
Depending upon the context, the discount rate has two different definitions and usages. First, the discount rate refers to the interest rate charged to the commercial banks and other financial institutions for the loans they take from the Federal...