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AmazWeb is bidding to provide cloud services for Everything Party Inc. Everything Party Inc. pays its current provider $10,300 per year for the service. AmazWeb
AmazWeb is bidding to provide cloud services for Everything Party Inc. Everything Party Inc. pays its current provider $10,300 per year for the service. AmazWeb figures that it will need to purchase equipment worth $15,200 up front and then spend $1,900 per year on monitoring and updates to provide the service for 3 years. Potential bidders compete on their per year service charge and submit their bids to Everything Party. If AmazWeb's cost of capital is 10.3%, what is AmazWeb's lowest bid that makes financial sense? AmazWeb can bid as low as $ per year for providing the service. (Round to the nearest dollar.)
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