Question

Maintainit Inc. is asked to submit a bid for watering and spraying trees in a housing development for the next five years. To provide this service, Maintainit would have to buy new equipment for $100,000 and invest $30,000 in working capital requirement. The equipment would be depreciated straight-line to zero salvage value over the five-year period. Total labor and other costs would be $80,000 a year. The tax rate is 40 percent and Maintainit's cost of capital is 10 percent.
What would Maintainit's minimum bid price need to be?


$1.99
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  • CreatedMarch 27, 2015
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