User Account

All Pages

What decision should Transrail make

Assignment Help Accounting Basics
Reference no: EM132597480

Question - Transrail is bidding on a project that it figures will cost $400,000 to perform. Using a 25% markup, it will charge $500,000, netting a profit of $100,000. However, it has been learned that another company, Rail Freight, is also considering bidding on the project. If Rail Freight does submit a bid, it figures to be a bid about $470,000. Transrail really wants this project and is considering a bid with only a 15% markup to $460,000 to ensure winning regardless of whether or not Rail Freight submits a bid.

a) Do a profit payoff table from Transrail's point of view

b) For this payoff table find Transrail's optimal decision using (1) the pessimistic approach, (2) the optimistic approach, and (3) minimax regret approach.

c) If Rail Freight is known to submit bids on only 25% of the projects it considers, what decision should Transrail make?

d) Given the information in (c), what is EVPI?

Reference no: EM132597480

Questions Cloud

Discuss best practices for incident response in the cloud : Discuss in 500 words or more best practices for incident response in the cloud. Refer to at least one incidence response framework. The response must be typed.
Major information warfare or cyberterrorism events : Write a three to four page paper outlining three major information warfare or cyberterrorism events that occurred around the globe in recent history.
What is the rate of return on this investment : In return, agent promises that you will receive payments of $250 a month for the next 20 years. What is the rate of return on this investment
How will changes impact the need for changes in technology : How will changes impact the need for changes in technology, laws and/or regulations?
What decision should Transrail make : If Rail Freight is known to submit bids on only 25% of the projects it considers, what decision should Transrail make
Prepare journal entry to recognize the income tax benefit : Prepare the journal entry to record income taxes in 2022 assuming pretax accounting income is $270 million. No additional temporary differences.
Why should new college graduates consider starting up : Using the Pyramid Principle, answer the following question: Why should new college graduates consider starting up a business?
Hackman and oldham core job dimensions : Using Hackman and Oldham's core job dimensions, compare and contrast the jobs of these two state employees
How would you apply your new knowledge : Base on the course content, discuss the new skills you acquired from this class? How relevant are the new skills in your profession?

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture 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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd