Hassle-Free Web is bidding to provide web hosting services for Hotel Lisbon. Hotel Lisbon pays its current provider

$ 10,100 per year for hosting its web page, handling transactions, etc. Hassle-Free figures that it will need to purchase equipment worth $ 15,000

up front and then spend $ 1,900 per year on monitoring, updates, and bandwidth to provide the service for 3 years. If Hassle-Free's cost of capital is 10.5 %,

can it bid less than $ 10,100 per year to provide the service and still increase its value by doing so? This is an EAC problem.