Question
7. Net Present Cost in the Town of Pawnee The Parks and Recreation Department in the town of Pawnee intends to hire a new contractor
7. Net Present Cost in the Town of Pawnee The Parks and Recreation Department in the town of Pawnee intends to hire a new contractor for some renovations to the boundary walls of six parks and maintain walls for a period of next three years. Leslie Knope, the deputy director of the parks and recreation department, has received two bids that are illustrated below. Swanson Inc. has quoted a lower renovation cost and higher maintenance cost, while the Haverford Inc. has quoted a higher renovation cost and lower maintenance cost. Which option is better from Leslie's perspective assuming a discount rate of 8 percent and taking into account the time value of money? (3 pts)
Swanson Inc. Haverford Inc. Renovation Cost (Paid in October 2020) $ 20,000 $27,500 Maintenance Year 1 (Paid in October 2021) $7,500 $5,000 Maintenance Year 2 (Paid in October. 2022) $7,500 $5,000 Maintenance Year 3 (Paid in October, 2023) $7,500 $5,000 Total $42,500.00 $42,500.00
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