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Consider a project to supply 100 million postage stampsper year to the USPS for the next five years. To pursue theproject, you will need to install $4.1 million in new manufacturingplant and equipment. This will be depreciated straight-line to zeroover the project’s five years. The equipment can be sold for$540,000 at the end of the project. You will also need $600,000 ininitial net working capital for the project and an additionalinvestment of $50,000 in every year thereafter. All net workingcapital will be recouped at the end of the project. Your productioncosts are $.005 per stamp and you have fixed costs of $950,000 peryear. If your tax rate is 34% and your required return is 12%, whatbid price should you submit on the contract.