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You're a publisher of University Text Books. A professor at WSU has written a new...

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You're a publisher of University Text Books. A professor at WSU has written a new a new Customized Corporate Finance text book has asked your firm to prepare and print the text book. He is willing to commit to purchasing 10,000 text books over four years. You are at full production, so you need to purchase new printing equipment at a cost of $3.75 Million which will be depreciated on a straight line basis over the life of the project and can be sold for $300,000 at the end of 4 years. Additionally, you will need $400,000 in excess working capital which you can recoup at the end of the project. Fixed costs are $610,000 and variable costs are $87. While this is a customized version, you believe you can sell the text book to other universities as well and, project those sales at 12,500,14,700,19,000,&12,100 at $195 per unit. Your CFO requires that all projects have an NPV of $150,000. Your firms tax rate is 23% and cost of capital is 10%. What price (per textbook) should you bid on the commitment of 10,000

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