Determine before tax unit price-joseph production company

Assignment Help Finance Basics
Reference no: EM132715441

Joseph Production Company is bidding an 11-year contract to provide the customer with 12,000 units of product per year. Their accounting department has estimated a labor and material costs of $20 per unit. An initial capital investment of $500,000 is required. The equipment belongs to CCA class 50. Initial net working capital of $20,000 is also needed, as are subsequent investments of $3,000 per year over the life of the contract. The firm must pay factory lease expenses of $75,000 per year. Equipment maintenance expenses are projected to be $15,000 per year. Both lease expenses and maintenance expenses are payable at the end of the year. At the end of the contract, the capital equipment can be sold for $5,000. The firm has a tax rate of 32% and a required return rate of 15%.

Required: Determine the before tax unit price Joseph should bid for this contract. Round the unit price to the nearest dollar. Show all calculations.

Reference no: EM132715441

Questions Cloud

Who will be affected by manny decision : Is Manny behaving ethically by reporting the loan to Tom as a trade account receivable? Why or why not? Who will be affected by Manny decision
What actions would you take in the given situation : As new accounting, you are working with one of our sites on the accounting for the purchase of new equipment. The site believes that this equipment should be.
Information technology decisions for business : How can the IT manager influence the information systems and information technology decisions for a business?
What was the value of ending inventory : Sales for the year were 31,500 units at $29.60 each. Jerrico uses Average Cost accounting. What was the value of ending inventory
Determine before tax unit price-joseph production company : Determine the before tax unit price Joseph should bid for this contract. Round the unit price to the nearest dollar. Show all calculations.
Discuss the financial benefits of chatbots : Some people say that chatbots are inferior for chatting. Others disagree. Discuss. Discuss the financial benefits of chatbots.
What was cost of goods sold in 2019 : The Merchandise Inventory account had a January 1 balance of $30,395 and a December 31 balance of $16,767. What was Cost of Goods Sold in 2019?
Aims and objectives of the regulation : This should include the market failure(s) that this regulation is addressing, the deficiencies of the existing regulation, the aims and objectives
Calculate the net present value of the decision : The Johnson Research Organization, a nonprofit organization that does not pay taxes, Calculate the net present value of this decision.

Reviews

Write a Review

Finance Basics Questions & Answers

  Extract a trial balance and a bank transactions report

FNSACC301 Process financial transactions and extract interim reports - Write an invoice for each in MYOB and Extract a trial balance and a bank transactions

  Suppose that the risk free rate is 5 and that the market

suppose that the risk free rate is 5 and that the market risk premium is 7. what is the required return on 1 the

  Types of business organization except

1. Double taxation is a drawback for which of the following types of business organization except?

  What was the average annual compound rate of interest

Bobby borrowed $7,000 from his father to purchase a high-end bike. Bobby paid back $9,000 to his father at the end of 4 years.

  The next two questions are very lengthy so if i could just

templeton extended care facilities is considering the acquisition of a chain of cemeteries for 380 million dollars.

  Explain the entry strategies

Provide a real-world example of an organization that experienced the choice you selected. Explain the entry strategies taken by the organization.

  You purchased a bond for 1100 the bond has a coupon rate

you purchased a bond for 1100. the bond has a coupon rate of 8 percent which is paid semiannually. it matures in 7

  Standard deviation of pge monthly returns

The past five monthly returns for PG&E are -3.37 percent, 4.38 percent, 3.97 percent, 6.77 percent, and 3.78 percent.

  In your own words explain how to obtain the ldquoexpected

in your own words explain how to obtain the ldquoexpected value of perfect informationrdquo for any payoff table which

  Explain project evaluation through npv

Explain Project evaluation through NPV and ignore small rounding differences between your answer and the choices given

  What would be projected for equity at year-end

You are preparing pro forma financial statements for 2014 using the percent-of-sales method. Sales were $100,000 in 2013 and are projected to be $132,000.

  Consider a project with free cash flows

Consider a project with free cash flows in one year of $90,000 in a weak economy or $117,000 in a strong economy, with each outcome being equally likely. The initial investment required for the project is $80,000, and the project's cost of capital..

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