Considering making bid for contract for modifying stripped

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Reference no: EM131342123

You are considering making a bid for a contract for modifying stripped down truck platforms for a local distributor. The distributer has requested bids for 6 specifically modified trucks each year for the next 4 years for a total of 24 trucks in all. The lowest possible price you could possibly charge will result in a $0 NPV at your required rate of return of 17%. After some analysis, you have determined your operating cash flow must be $57, 500 per year. If the depreciation per year (straight line) is $27, 500, total costs per year (not including depreciation) are $103,000, and your tax rate is 39%, how much should you bid per truck?

Reference no: EM131342123

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