Which lighting system should the city select based on financial (LCC) considerations? 2. A city has learned that by buying larger garbage trucks, labor costs for garbage removal would be reduced. You, the analyst, have also collected the following information: Cost of the trucks today is $400,000. Annual savings in this year’s constant dollars is $90,000. Trucks will last for four years, then will be sold for $100,000. The city can borrow money (discount rate) at 7 percent. Inflation (for the next four years) is expected to average 3 percent. Note: All the dollar amounts are in this year’s dollars (constant dollars). Assuming the costs and benefits incur at the end of the year, should the city buy the trucks? 3. A major urban center is planning to issue a $100 million, twenty-year, semiannual interest municipal bond for the construction of a stadium. The interest rate is 5.875 percent, based on the economic and financial conditions of the city and city government. The design and issuance costs are estimated to be $10 million and 1 percent, respectively. What is the total interest paid if the city decides to adopt a level debt service structure? How much does the city still owe on this bond at the end of each year? Purchase the answer to view it
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
