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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?
a. $30,000 savings
b. $13,000 additional
c. cost $2,000 savings
d. $12,000 savings
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Answers: 3
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State University is considering hiring an outside company for its grounds maintenance. In this regar...
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