Consider a project to supply 100 million postage stamps per year to the USPS for the next five

years. To pursue the project, you will need to install $4.1 million in new manufacturing plant

and equipment. This will be depreciated straight-line to zero over 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 in

initial net working capital for the project and an additional investment of $50,000 in every year

thereafter. All net working capital will be recouped at the end of the project. Your production

costs are $.005 per stamp and you have fixed costs of $950,000 per year. If your tax rate is 34%

and your required return is 12%, what bid price should you submit on the contract?