Determine what bid price should be submitted

Assignment Help Financial Econometrics

Reference no: EM13333896

Dahlia Enterprises needs someone to supply it with 129,000 cartons of machine screws per year to support its manufacturing needs over the next five years, and you've decided to bid on the contract. It will cost you $960,000 to install the equipment necessary to start production; you'll depreciate this cost straight-line to zero over the project's life. You estimate that in five years, this equipment can be salvaged for $79,000. Your fixed production costs will be $334,000 per year, and your variable production costs should be $11.20 per carton. You also need an initial investment in net working capital of $84,000. If your tax rate is 35 percent and your required return is 12 percent on your investment, what bid price should you submit?

Reference no: EM13333896

Questions Cloud

How much tension will be on the rope : A helicopter lowers a rope with a seat at the end to resue someone. The seat has a mass of 4.4 kg. The person has a mass of 74.4 kg. How much tension will be on the rope

Estimate the selling price of a stock at an annual rate : Estimate the selling price of a stock if its dividend is expected to increase indefinitely at an annual rate of 2 percent and comparable stocks are yielding 8 percent.

What is the diameter of the nail : A nail projects 25.0 mm horizontally outward from a wall. A 400 N picture is hung from the end of the nail and the nail deflects downward by 2.00 x 10^-5. what is the diameter of the nail

Present one of descartes skeptical arguments : Present one of Descartes' skeptical arguments from the Meditations and explain his rationalist account of how knowledge is possible? Meditation III: Concerning God, That He Exists..

Determine what bid price should be submitted : Dahlia Enterprises needs someone to supply it with 129,000 cartons of machine screws per year to support its manufacturing needs over the next five years, and you've decided to bid on the contract.

Explain how employee involvement potentially results : Senior management at Candoo Graphics has numerous administrative and client problems. In the past, the company assigned one person (typically a senior executive or department manager) to solve each problem alone.

Make science and its constant revising work even better : Why you think scientists probably want to leave what they do open to revision. What are the hard-and-fast rules of science? Are there any? With so few firm rules, how does science avoid becoming fiction? What might make science and its constant revis..

Determine how large will the last payment be : Six years from today you need $10,000. You plan to deposit $1,600 annually, with the first payment to be made a year from today, in an account that pays a 7% effective annual rate.

Implement comparators to support sorting : Extend Project 1 to use advanced data structures and support sorting on various keys.

User Account

All Pages