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Please explain your answer. ASAP Multiple Choice Question 85 State University is considering hiring an outside company for its grounds maintenance. In this regard, State
Please explain your answer. ASAP
Multiple Choice Question 85 State University is considering hiring an outside company for its grounds maintenance. In this regard, State University has received a bid from Mackin Services. Mackin states that its bid of $410,000 will cover all services and planting materials required to "keep State University's grounds in a condition comparable to prior years." State University's cost for grounds maintenance in the preceding year was $412,000 as follows: Salary of three full-time gardeners Plant materials Fertilizer Fuel Depreciation of other equipment Depreciation of tractor and mowers Total $295,000 80,000 9,000 8,000 5,000 15,000 $412,000 If State University hires Mackin, it will be able to sell its other equipment for $30,000, and the three gardeners will be laid off. What is the first year financial impact of hiring the outside company for its grounds maintenance? $30,000 savings $13,000 additional cost $2,000 savings $12,000 savingsStep by Step Solution
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