Bidding to provide web hosting services

Assignment Help Financial Management

Reference no: EM132003813

Hassle-Free Web is bidding to provide web hosting services for Hotel Lisbon. Hotel Lisbon pays its current provider $10,100 per year for hosting its web page, handling transactions, etc. Hassle-Free figures that it will need to purchase equipment worth $15,100 up front and then spend $2,000 per year on monitoring, updates, and bandwidth to provide the service for 3 years. If Hassle-Free's cost of capital is 10.3 %, can it bid less than $10,100 per year to provide the service and still increase its value by doing so?

Hassle-Free can bid as low as $?

Reference no: EM132003813

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