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You are working on a bid to build a bridge per year for the next three years. This project requires the purchase of $ 1

You are working on a bid to build a bridge per year for the next three years. This project requires the purchase of $1,000,000 of equipment that will be depreciated using straight line depreciation to a zero-book value over the project's life. Ignore bonus depreciation. The equipment can be sold at the end of the project for $400,000. You will also need $250,000 in net working capital over the life of the project. The fixed costs will be $500,000 per year and the variable costs will be $3,000,000 per bridge. Your required rate of return is 20 percent for this project and your tax rate is 10 percent. What is the minimal amount, rounded to the nearest $100, you should bid per bridge? Note: 3 years annuity factors of 20% required return =2.106
Value needed to be input below:
"OCF (Operating Cash Flow):
Net Working capital:
Capital spending:
OCF needed to be for the NPV to be =0:
Depreciation:
Net income:
Sales revenue (Net income 1-Tax + Operating cost):"

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