Jenkins Security Has Learned That a Rival Has Offered to Supply

question 30

Multiple Choice

Jenkins Security has learned that a rival has offered to supply a parking garage with security for ten years for $50,000 up front and a further $20,000 per year.If Jenkins Security offers to provide security for eight years for an upfront cost of $70,000 and a separate yearly payment,what is the maximum that this yearly payment can be so that Jenkins' offer matches the equivalent annual annuity of their rival's offer? (Assume a cost of capital of 6%.)

• A)$13,095
• B)$13,458
• C)$13,995
• D)$15,521
• E)$16,112

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Definitions:

Degrees of Freedom

The number of independent values or quantities which can be assigned to a statistical distribution or to a system without violating any constraint.

Contingency Table

A tabular method to represent and analyze the relationship between two or more categorical variables, showing the distribution of one variable across levels of the other variable(s).

Chi-square Test of Independence

A statistical analysis aimed at identifying a meaningful relationship between two variables that can be categorized.

Quantitative Variables

Variables that represent measurable quantities and can take on numerical values.