Your company is asked to submit a bid for watering and spraying trees in a housing development for the next five years. To provide this service, the company would have to buy new equipment for 100 000 and invest 30 000 in its working capital requirement. The equipment would be depreciated straight-line to zero salvage value over the five-year period. Total labor and other costs would be 80000 a year. The tax rate is 40 percent and the companys cost of capital is 10 percent.

Required: What would be the companys minimum bid price?