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You are working on a bid to build two city parks a year for the next three years. This project requires the purchase of $192,000
You are working on a bid to build two city parks a year for the next three years. This project requires the purchase of $192,000 of equipment that will be depreciated using straight-line depreciation to a zero book value over the three-year project life. The equipment can be sold at the end of the project for half of what you paid for it. You will also need $25,000 in net working capital for the duration of the project. The fixed costs will be $64,500 a year and the variable costs will be $101,000 per park. Your required rate of return is 16 percent and your tax rate is 21 percent. a. Fill out the table: Do not include dollar signs in your answers ($). Clearly write negative numbers with a negative (-)sign Year o Year 1 Year 2 Year 3 OCF OCF OCF OCF Change in NWC o o Capital spending o o OCF+ Total cash flow OCF OCF b. Find bid price per park, using the OCF you found in the question above. (Round to nearest $100 dollar) Bid per park is $
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