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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
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?
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