A local government awards a landscaping company a contract worth $1.2 million per year for five years for maintaining public parks

A local government awards a landscaping company a contract worth $1.2 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 7%, what is the most that this equipment could cost if the contract is to be worthwhile for the landscaping company?Question 4 options:A) $4.55 millionB) $4.61 millionC) $4.92 millionD) $5.26 millionQuestion 5 (2 points)Two mutually exclusive investment opportunities require an initial investment of $5 million. Investment A then generates $1.5 million per year in perpetuity, while investment B pays $1 million in the first year, with cash flows increasing by 3% per year after that. At what cost of capital would an investor regard both opportunities as being equivalent?Question 5 options:A) 3%B) 6%C) 9%D) 10%CathFoods will release a new range of candies which contain antioxidants. New equipment to manufacture the candy will cost $2 million, which will be depreciated by straight-line depreciation over five years. In addition, there will be $5 million spent on promoting the new candy line. It is expected that the range of candies will bring in revenues of $4 million per year for five years with production and support costs of $1.5 million per year. If CathFood’s marginal tax rate is 35%, what are the incremental free cash flows in the second year of this project?Question 8 options:A) $1.765 millionB) $2.015 millionC) $2.415 millionD) $2.500 millionQuestion 9 (2 points)Jim owns a farm that he wants to sell. He learns that a highway will be built near the farm in the future, giving access to the farmland from a nearby city and thus making the land attractive to housing developers. Expecting the net present value (NPV) of the sale to be greater after the highway is built, he decides not to sell at this time. What real option is Jim taking?Question 9 options:A) option to delayB) option to expandC) option to abandonD) option to switch