Question: I consider a project supply 100 millon postuge stumps per year to U.S. Postal service for the next 5 yeurs. You have an ideal parcel
I consider a project supply 100 millon postuge stumps per year to U.S. Postal service for the next 5 yeurs. You have an ideal parcel of land available war is worth 1,200,000 arter tex. The land can be sold or $1,500,000 anter tures in 5 years, you will need to instali 3,8 million a new manupucturing plant and equipment to actually produce the stumps this plant and equipment will be depreciated Shaight line to zero over me projects like's 5 years Assume no salvage value at end of the project, No changes in Net Working capital, production costs are 0.5 cents per stamp and fixed cost 2060,000 per year, tux rate= 3490 and required return is 12030. Wnut bid price should you Submit on contracts AF (2,1.90 (3,2.402)4,9024X5, 3.4805)
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