Question: You are working on a bid for a 4-year contract. Thus far, you have determined that you will need $147,300 for fixed assets that will

You are working on a bid for a 4-year contract. Thus far, you have determined that you will need $147,300 for fixed assets that will be depreciated straight-line to zero over the life of the project and then salvaged for 43,000. You will need $42,000 for net working capital at Time 0, but the entire amount will be recoverable at the end of the project. If your costs for this contract will run $97,500 annually, and you face a 21 percent tax rate, what is the minimum annual value you can bid for this contract and still return 21 percent in nominal terms?

Necessary OCF = $

Minimum bid =

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