Problem
A proposed project will require $410,000 in fixed assets that would be depreciated straight-line to zero over the 3-year life of the project. These assets have an expected aftertax salvage value of $110,000 at the end of the project. The project would require $48,000 of net working capital, all of which is recoverable, along with $220,000 in annual expenses. What is the minimum annual price you should bid on this project if you require a rate of return of 17 percent and have a tax rate of 30 percent?