Question - Oakland College is considering outsourcing grounds maintenance. In this regard, Oakland has received a bid from Highline Grounds Maintenance for $308,700 per year. Highline states that its bid will cover all services and planting materials required to "keep Oakland's grounds in a condition comparable to prior years." Oakland's cost for grounds maintenance in the preceding year were $317,690 as follows:
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Salary of three full-time gardeners
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$204,030
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Plant materials
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81,460
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Fertilizer
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8,880
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Fuel
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8,740
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Depreciation of tractor, mowers, and other
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miscellaneous equipment
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14,580
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Total
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$317,690
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If Oakland College outsources maintenance, it will be able to sell equipment for $34,300, and the three gardeners will be laid off.
Analyze the one-year financial impact of outsourcing grounds maintenance.