LAFic Publishing needs someone to supply it with 20 tons of recycled paper each year to support its book publishing operations over the next three years, and your firm has decided to bid on the contract. It will cost you $300,000 to install the equipment necessary to expand your current production to meet the new demand. This new equipment will depreciate straight-line to zero over the project's life. You estimate that, in three years, this equipment will have an after-tax salvage value of $85,000. Your fixed production costs will be $33,000 per year, and your variable production costs should be $701 per ton. You also need an initial investment in net working capital of $67,000. If your tax rate is 21 percent and you require a return of 17 percent on your investment, what bid price should you submit? wered