Bidding to provide web hosting services

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Hassle-Free Web is bidding to provide web hosting services for hotel Lisbon. Hotel Lisbon pays its current provider $10,200 per year fo hosing its web page, handling transactions. Hassle-Free figures that it will need to purchase equipment worth $14,900 up front and then spend $2,100 per year on monitoring updates and bandwidth to provide the service for 3 years. If Hassle-Free cost of capital is 9.8%, can it bid less than $10,200 per year to provide the service and still increase its value by doing so Hassle-Free can bid as low as $?

Reference no: EM13727261

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