+1-415-670-9189
info@expertsmind.com

# Get Solution

What bid price should you submit on the contract
Course:- Financial Management
Reference No.:- EM13942979

 Tweet

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))

Minimize

Ask Question & Get Answers from Experts
Browse some more (Financial Management) Materials
 Kerr, Inc., a major U.S. exporter of products to Japan, denominates its exports in dollars and has no other international business. It can borrow dollars at 9 percent to finan Assumed the betas for securities A,B, and C are shown here. Security Beta A 1.4 B .80 C -.90. Calculate the change in return for each security if the market experiences an inc Kevin owns a modified endowment contract. Kevin recently reassessed his insurance needs and decided that he would like to exchange his current modified endowment contract for Consider the following information on a portfolio of three stocks: State of Probability of Stock A Stock B Stock C Economy State of Economy Rate of Return Rate of Return Rate Identify specific fraud risk present during PwC's audits of the Lipper hedge funds. Explain how Pwc should have responded to the fraud risk factors that you identified. Firm A just paid a dividend of \$2.50 per share. This dividend is expected to grow at a rate of 18% over the next three years and then grow at a rate of 3% after that into the Orville T. Jaden, a self-proclaimed aficionado of all things relating to the sandwich, opened TJ’s Sandwich Shop in Springville, USA on March 1, 2014. Set up appropriate T-acc Moulton motors is advertising the following deal on a used Honda Accord: "monthly payments of \$225.58 for the next 54 months and this beauty can be yours!" the sticker price o