5. 5.16 The City Council in a southwestern city is considering the construction of permanent restrooms in 22 of its smaller parks (i.e., parks less than 12 acres) or pay for portable toilets on a year-round basis. The cost of constructing the 22 permanent restrooms will be $3.8 million. The 22 portable restrooms can be rented for $7500 each the first year with rental cost increases of $25 per portable per year for a maximum contract period of 10 years. The service life of a permanent restroom is 20 years.

Using an interest rate of 6% per year and an annual worth analysis, determine if the city should build the permanent restrooms or lease the portable ones.