You are working on a bid for a 7-year contract. Thus far, you have determined...
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You are working on a bid for a 7-year contract. Thus far, you have determined that you will need $165,300 for fixed assets that will be depreciated straight-line to zero over the life of the project and then salvaged for 39,400. You will need $49,200 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 $88,500 annually, and you face a 21 percent tax rate, what is the minimum annual value you can bid for this contract and still return 19 percent in nominal terms?
Necessary OCF =
Minimum bid =
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