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Consider a project to supply 108 million Pokemon trading cards per year for the next five year to the Pokemon-R-Us Corporations. You have some undeveloped

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Consider a project to supply 108 million Pokemon trading cards per year for the next five year to the Pokemon-R-Us Corporations. You have some undeveloped land avallable that cost $1,980,000 five years ago. If you sold the land today you would net $2,180,000 after taxes. You anticipate that the land can be sold in five years for $2,380,000 net of taxes. To supply the trading cards you will need to Install $5.48 million in new plant and equipment. These fixed assets will be depreclated straight-line to zero over the project's five-year life. The plant and equipment will be sold for $580,000 before taxes at the end of five years. You anticipate an Initlal investment in net working capital of $680,000, and an additional $58,000 in each subsequent year. You estimate that all net working capital will be recovered at the end of the project. Your varlable production costs are 0.58 cents per card (or $0.0058 ), and you have fixed costs of $1,050,000 per year. Your tax rate is 30 percent and your required return on this project is 10 percent. What is the lowest that your bid price per card should be? That is, what per-unit price gives the project an NPV =0 ? Part A: Start by calculating the operating cash flow that, when recelved as an annulty for 5 years, would set the NPV =0. (Do not round Intermedlate calculations and round your answer to 2 declmal places, e.g., 32.16.) OCF* \$ Part B: Now calculate the minimum bid price, (Do not round intermedlate calculations fand round your answer to 4 decimal places, e.g., 32.1616.)

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