+1-415-670-9189
info@expertsmind.com
What bid price should you submit on the contract
Course:- Financial Management
Reference No.:- EM13942979




Assignment Help
Expertsmind Rated 4.9 / 5 based on 47215 reviews.
Review Site
Assignment Help >> Financial Management

Consider a project to supply 100 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 $1,900,000 five years ago; if the land were sold today, it would net you $2,100,000 aftertax. The land can be sold for $2,300,000 after taxes in five years. You will need to install $5.4 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 $500,000 at the end of the project. You will also need $600,000 in initial net working capital for the project, and an additional investment of $50,000 in every year thereafter. Your production costs are 0.5 cents per stamp, and you have fixed costs of $1,050,000 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? (Do not round intermediate calculations and round your final answer to 5 decimal places. (e.g., 32.16161))




Put your comment
 
Minimize


Ask Question & Get Answers from Experts
Browse some more (Financial Management) Materials
Bilbo Baggins wants to save money to meet three objectives. First, he would like to be able to retire 30 years from now with retirement income of $25,000 per month for 25 year
What was the original annual rate of return needed to reach your goal when you started the fund two years ago? With only $140,000 in the fund and 10 years remaining until you
An investment project provides cash inflows of $1,350 per year for eight years. What is the project payback period if the initial cost is $4,250? What is the project payback p
Make a series of twelve $1,200 payments at the beginning of each of the next 12 years.- Make a single lump-sum payment today of $10,000 and receive coverage for the next 12 ye
Each of the following is true of Mutual Funds EXCEPT. A sole proprietorship is the most desirable business form in all circumstances. Venture capital funds play an important r
What is customer relationship management? Customer service can be defined as the overall process or strategy that an organization employs to. Which of the following terms best
In a talk at the White House in December 2009, President Barack Obama argued: “Ultimately in this country we rise and fall together: banks and small businesses, consumers and
What is the portfolio beta if 25% of your funds are invested in the market portfolio, 25% in an asset with twice as much risk as the market portfolio, and the remainder in a r