The Government of Ontario has offered your company, RoadPro Roadways Inc, a contract to transport 50,000 tonnes of asphalt each year for the next five years, as part of a provincial infrastructure project focusing on the province's northern roads. The busy season lasts for four months, beginning after the spring thaw and wrapping up in the fall. As a small transport company owner, this contract is desirable for you but you don't currently have any extra equipment available. To take the contract you would need to purchase three highway tractor units, three trailers, and a wheel loader. The loader and highway tractors could be purchased used, in good condition, However, it is difficult to find a good used asphalt trailer, so the trailers would be purchased new. Your administrative staff is capable of handling the new work without additional help. The contract specifies first right of refusal (a type of call option), meaning you are essentially guaranteed the full tonnage every year. Details, including estimates for cost, are listed in the table below. Equipment Costs and Salvage Used highway tractors (price for one) $75,000 New asphalt trailers (price for one) $25,000 Used wheel loader $65,000 Total fixed asset expected salvage value $120,000 Expected Revenues and Expenses Contract revenue $7.00/tonne Labour $31,680/season Fuel $125,000/season Maintenance $35,000/season Fixed costs" $40,000/season Initial additional net working capital (NWC) requirement $25,000 Discount rate 15% Corporate tax rate 25% CCA rate 30%