Problem $6-36$ Calculating a Bid Price

Your company has been approached to bid on a contract to sell $18,000$ volce recognition

$($VR$)$ computer keyboards per year for four years. Due to technological improvements,

beyond that time they will be outdated and no sales will be possible. The equipment

necessary for the production will cost $$4,600,000$ and will be depreclated on a stralght$-$

IIne basis to a zero salvage value. Production will require an Investment in net working

capital of $$170,000$ to be returned at the end of the project, and the equipment can be

sold for $$290,000$ at the end of production. Flxed costs are $$825,000$ per year and

varlable costs are $$39$ per unit. In addition to the contract, you feel your company can

sell $5,200,12,800,14,800,$ and $8,100$ additional units to companies In other countrles

over the next four years, respectlvely, at a price of $$130.$ This price is fixed. The tax rate

is $24$ percent, and the required return is $12$ percent. Additionally, the president of the

company will undertake the project only if it has an NPV of $$150,000.$ What bid price

should you set for the contract? $($Do not round intermedlate calculations and round

your answer to $2$ decimal places, e$.$g$.,32\mathrm{.}16.)$

Answer is complete but not entirely correct.