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Business, 01.12.2019 17:31 rebeccacruzz2017

You are working on a bid to build four cabins a year for the next three years for a local campground. this project requires the purchase of $66,000 of equipment which will be depreciated using straight-line depreciation to a zero book value over the three years. the equipment can be sold at the end of the project for $10,000. you will also need $16,000 in net working capital over the life of the project. the fixed costs will be $18,000 a year and the variable costs will be $88,000 per cabin. your required rate of return is 14 percent for this project and your tax rate is 34 percent. what is the minimal amount, rounded to the nearest $500, that you should bid per cabin?

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