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

$10 000

per year for hosting its webpage and handling transactions on it, etc. Hassle-Free figures that it will need to purchase equipment worth

$14 800

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

9.7%,

can it bid less than

$10 000

per year to provide the service and still increase its value by doing so?

Hassle-Free can bid as low as?