A local government awards a landscaping company a contract worth $1.5 million per year for five years
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A local government awards a landscaping company a contract worth $1.5 million per year for five years for maintaining public parks. The first payment is made immediately with the remaining 4 paid annually thereafter. The landscaping company will need to buy some new machinery before they can take on the contract. If the cost of capital is 6%, what is the most that this equipment could cost if the contract is to be worthwhile for the landscaping company?
Related Book For
Fundamental Managerial Accounting Concepts
ISBN: 978-0078110894
6th Edition
Authors: Edmonds, Tsay, olds
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