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Run Inc. is invited to bid on supplying three Hurry-Up machines to Flee Corporation for each of the next five years. To build these machines,

Run Inc. is invited to bid on supplying three Hurry-Up machines to Flee Corporation for each of the next five years. To build these machines, Run Inc. will have to invest $100,000 in new plants and equipment, as well as additions to net working capital of $30,000. The equipment is subject to CCA rate of 30%, and will have a salvage value of $8,000 at the end of five years. The construction of the machines will require variable cost of $7,000 per unit and annual fixed costs of $39,000. Run Inc.'s required return is 18% and it faces a marginal corporate tax rate of 40%. How much must Run Inc. bid for each of the Hurry-Up machines?

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