A Local Government Awards a Landscaping Company a Contract Worth

question 56

Multiple Choice

A local government awards a landscaping company a contract worth $1.5 million per year for five years for maintaining public parks. 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?

• A) $5.69 million
• B) $6.00 million
• C) $6.32 million
• D) $6.63 million

---

Definitions:

Financialization

The escalating relevance of financial markets, financial reasons, financial bodies, and financial upper echelons in the functioning of the economy and its administrative institutions.

Banking Regulations

Are laws and guidelines established by governments and financial regulatory bodies to ensure stability, fairness, and efficiency in the banking sector.

Corporate Governance

The framework of rules, practices, and processes by which a company is directed and controlled, ensuring accountability, fairness, and transparency in a company's relationship with its stakeholders.

Financial Markets

Platforms where individuals, companies, and governments can trade financial securities, commodities, and other fungible assets.