What bid price should you submit on the contract

Assignment Help Finance Basics
Reference no: EM132185264

Question - Consider a project to supply 103 million postage stamps per year to the U.S. Postal Service for the next five years. You have an idle parcel of land available that cost $1,930,000 five years ago, if the land were sold today, it would net you $2,130,000 after tax. The land can be sold for $2,330,000 after taxes in five years. You will need to install $5.43 million in new manufacturing plant and equipment to actually produce the stamps; this plant and equipment will be depreciated straight-line to zero over the project's five-year life. The equipment can be sold for $530,000 at the end of the project. You will also need $630,000 in initial net working capital for the project, and an additional investment of $53,000 in every year thereafter. Your production costs are .53 cents per stamp, and you have fixed costs of $1,080,000 per year. If your tax rate is 34 percent and your required return on this project is 12 percent, what bid price should you submit on the contract?

Reference no: EM132185264

How many dollars will the cash management system free up

If the company has $5 million per day in collections and $3 million per day in disbursements, how many dollars will the cash management system free up?  Justify your answers

Basic time value of money

It is a common fact that many lottery winners are "broke" sooner than later. If you won a $1,000,000 lottery, would you want to collect the lump sum winnings today or receive

U.s. resident investing in a foreign market

The realized dollar returns for a U.S. resident investing in a foreign market will depend on the return in the foreign market as well as on the exchange rate fluctuations be

Under unfavorable conditions

If conditions are excellent, the NPV of the project is projected to be $3,000; under fair conditions, the NPV is projected at $950; and under unfavorable conditions, the NPV

What conversion price should be set by the issuer

It was agreed by the investment bankers and the management that the common stock would sell at 14 times earnings, the current price/earnings ratio.a. What conversion price sho

What is gasoline marginal profit and fiber marginal profit

Firms often face the problem of allocating an input in fixed supply among different products. Find the optimal crude oil allocation in the proceeding example if the profit ass

How long does sam have before he will retire

Sam refuses to make any more deposits in the account. The account currently has a balance of $113,217 and earns 6% per year, compounded semi-annually. How long does Sam have

What rate is the dividend growing

A share of common stock is currently selling for $27.73. The last dividend paid was $1.60 per share. The marketrate of return is 10%. At what rate is the dividend growing?

Reviews

Write a Review

 
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd