You are working on a bid to build four cabins a year for the next three years for a local campground. this project requires the purchase of $66,000 of equipment which will be depreciated using straight-line depreciation to a zero book value over the three years. the equipment can be sold at the end of the project for $10,000. you will also need $16,000 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 $88,000 per cabin. your required rate of return is 14 percent for this project and your tax rate is 34 percent. what is the minimal amount, rounded to the nearest $500, that you should bid per cabin?

Sailcloth & more currently produces boat sails and is considering expanding its operations to include awnings for homes and travel trailers. the company owns land beside its current manufacturing facility that could be used for the expansion. the company bought this land 5 years ago at a cost of $319,000. at the time of purchase, the company paid $24,000 to level out the land so it would be suitable for future use. today, the land is valued at $295,000. the company has some unused equipment that it currently owns valued at $38,000. this equipment could be used for producing awnings if $12,000 is spent for equipment modifications. other equipment costing $490,000 will also be required. what is the amount of the initial cash flow for this expansion project?