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You are working on a bid to build ten cabins a year for the next four years for a local campground. This project requires the
You are working on a bid to build ten cabins a year for the next four years for a local campground. This project requires the purchase of $215,000 of equipment. The equipment can be sold at the end of the project for $149,000. Your facilities costs will be $22,000 a year and the labour and materials costs will be $127,000 per cabin. Your required rate of return is 13% for this project. Ignoring depreciation and taxes, what is the minimum amount, you should bid per cabin?
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