$4.$ Your company has been approached to potentially bid on a contract to supply voice recognition keyboards. Under the contract, you would deliver $5,000$ keyboards per year for four years. The necessary production equipment would cost you $$1\mathrm{.}4$ million immediately. This equipment would be depreciated for tax purposes on a straight$-$line basis at the rate of $$350,000$ per year. Production would require an immediate investment of $$395,000$ in working capital, though this amount would be recovered at project end. The production equipment could be sold for $$325,000$ after four years. You would also incur fixed costs of $$150,000$ per year and variable production costs of $$25$ per keyboard. The tax rate is $23\%,$ and the relevant discount rate is $10\%.$

$($a$)$ Your marketing manager suggests that you bid to supply the keyboards at a price of $$150$ each. Compute the incremental cash flows should your bid be accepted.

$($b$)$ Compute the NPV should your bid be accepted.

$($c $)$ Your CEO indicates that investment capital is in short supply, and that unless the NPV was at least $$300,000$ she would deploy the capital to other projects. What price per keyboard should you bid to ensure an NPV of $$300,000?$