1. Roots Canada needs new hats. You are considering bidding on a project. The project details include:
   • 4 year life
   • Initial investment of $50,000 in working capital
   • Upfront costs of $175,000 for a new injection-moulding machine.
   • $20,000 in yearly pre-tax operating costs
   • Your company has a tax rate of 35%
   • Your company's required rate of return is 15%
   • At the end of 4 years you can sell the equipment for $30,000
   • There is no depreciation consideration for this equipment

1. Complete the following table and calculate the net present value for the project costs.
2. determine Equivalent Annual Cost
3. If the contract requires you to make 15,000 toques, what is the minimum amount you would bid/toque?

		Year
Cash Flows	PV	0	1	2	3	4
Initial Cost		-50,000
Upfront Costs		-175,000
After Tax Savings
Total CFs
NPV