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help asap! 21&22 Use the information below for the next 2 questions. The City of Pawnee, Indiana is considering installing additional trash and recycling bins
help asap! 21&22
Use the information below for the next 2 questions. The City of Pawnee, Indiana is considering installing additional trash and recycling bins throughout its city parks. It will cost $90,000 to buy and install the bins. The city expects the bins will result in reduced clean up costs for the parks equalling cost savings of $11,000 per year for 12 years. The bins have no salvage value. Pawnee has an 8% required rate of return. Deputy Parks Director.Leslie believes that if Pawnee installs the bins they will be eligible for a grant from state equal to 20% of the costs to buy and install the bins. This grant will be paid to Pawnee 2 years after installation is complete. Parks Director Ron does not believe Pawnee will be eligible for the grant. Present Value of $1 Present Value of Annuity $1 15pts Assuming Leslie is correct and Pawnee will receive the grant, what is the NPV of this project? Question 22 10pts Which answer describes the correct decision rule for Pawnee related to the trash and recycling bins? Assume there are no other benefits to the project besides the financial penefits listed. Install the bins if the grant is expected. Do not install the bins if the grant is not expected. Always install the bins regardless of expectations about the grant. Never install the bins regardless of expectations about the grant. Install the bins if the grant is not expected. Do not install the bins if the grant is expeoted Step by Step Solution
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