Voice recognition computer keyboards year for four years

Assignment Help Financial Management

Reference no: EM131332458

Your company has been approached to bid on a contract to sell 5, 100 voice recognition (VR) computer keyboards a year for four years. Due to technological improvements, beyond that time they will be outdated and no sales will be possible. The equipment necessary for the production will cost $4.7 million and will be depreciated on a straight-line basis to a zero salvage value. Production will require an investment in net working capital of $104,000 to be returned at the end of the project and the equipment can be sold for $284,000 at the end of production. Fixed costs are $649,000 per year, and variable costs are $164 per unit. In addition to the contract, you feel your company can sell 10, 400, 11, 300, 13, 400, and 10, 700 additional units to companies in other countries over the next four years, respectively, at a price of $355. This price is fixed. The tax rate is 40 percent, and the required return is 10 percent. Additionally, the president of the company will only undertake the project if it has an NPV of $100,000. What bid price should you set for the contract?

Reference no: EM131332458

Questions Cloud

Find the set of nash equilibria of the game : Let x, y, a, b be positive numbers. - Find the set of Nash equilibria of this game.- Find the set of correlated equilibria of this game.

Why is caribbean important in understanding british america : Describe three ways that indigenous American communities and cultures were affected by European contact. List three ways that New England colonization and settlement differed from that of the Chesapeake. List two ways that New England colonization a..

Depreciated over five years using straight-line method : Nata, Inc., is considering the purchase of a $ 367.000 computer with an economic life of five years. The computer will be fully depreciated over five years using the straight-line method. The market value of the computer will be $ 67, 000 in five yea..

What is the probability that a transmitted digit : Suppose that 40% of the transmitted digits are 0s. 1. What is the probability that a transmitted digit is correctly received by the satellite?

Voice recognition computer keyboards year for four years : Your company has been approached to bid on a contract to sell 5, 100 voice recognition (VR) computer keyboards a year for four years. Due to technological improvements, beyond that time they will be outdated and no sales will be possible. Additionall..

A two player strategic form game : Prove that there is a two-player strategic-form game satisfying the property that its set of Nash equilibrium payoffs is A, and its set of correlated equilibrium payoffs is B.

What does the film focus on in terms of the prison reform : What are the implications of the American justice system on the Convict leasing of former slaves, criminalization of civil rights in the 1960s to the images of black criminality to win elections in the 1970s and the present moment. Why is it a mor..

The mixed methods approach : Through your work in this unit, you have come to understand just how different quantitative and qualitative decision-making techniques are. Perhaps that is why a mixed methods decision-making technique could be characterized as drawing from the be..

Depreciation is straight-line to zero : Gold Star Industries is contemplating a purchase of computers. The firm has narrowed its choices to the SAL 5000 and the HAL 1000. Gold Star would need six SALs, and each SAL costs $3, 650 and requires $390 of maintenance each year. Assume that the m..

User Account

All Pages