You Are Working on a Bid to Build fiVe Playgrounds

You are working on a bid to build five playgrounds a year for the next two years. This project requires the purchase of $62,000 of equipment which will be depreciated using straight-line
Depreciation to a zero book value over two years. The equipment can be sold at the end of the
Project for $39,001. You will also need $12,000 in net working capital over the life of the project.
The fixed costs will be $18,000 a year and the variable costs will be $49,000 per playground. Your
Required rate of return is 15% for this project and your tax rate is 34%. What is the minimum amount,
Rounded to the nearest $100, you should bid per playground?

A) $57,600
B) $57,900
C) $58,200
D) $58,500
E) $58,800