1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Likurg_2 [28]
3 years ago
5

Martin Enterprises needs someone to supply it with 120,000 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 $795,000 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 $143,000. Your fixed production costs will be $435,000 per year, and your variable production costs should be $10.15 per carton. You also need an initial investment in net working capital of $70,000. If your tax rate is 21 percent and you require a return of 9 percent on your investment, what bid price should you submit? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Business
1 answer:
ANEK [815]3 years ago
6 0

Answer:

The Bid Price you should submit is $15.45

Explanation:

NPV = -795000 + 143000*(1-21%)/1.09^5-70000 + 70000/1.09^5 + ((120000*(P-10.15) - 435000 - 795000/5)*(1-21%) + 795000/5)/0.09*(1-1/1.09^5)

        => -795000 + 143000*(1-21%)/1.09^5 - 70000 + 70000/1.09^5 +((120000*(P-10.15) - 435000 - 795000/5)*(1-21%) + 795000/5)/0.09*(1-1/1.09^5) >=0

      =>P = 15.446118865171

Therefore, The Bid Price you should submit is $15.45

You might be interested in
Using the income statement method for accounting for uncollectible accounts, a company estimates that 2.5% of credit sales will
Digiron [165]

Answer:

the adjustment for estimated uncollectible accounts will require

b. Debit to Bad Debt Expense for $10,000.

Explanation:

There are two primary methods for estimating bad-debt expense. The first is an income-statement approach that measures bad debt as a percentage of sales.

Accout receivable at the end_ 80000

Credit sales_______________400000

 

Estimate________________ 2,50%

Debit bas debt expense______10000

7 0
3 years ago
Hardy Inc. has two operating departments (1 and 2) and is considering renting a new machine to help automate the printing proces
gayaneshka [121]

Answer:

$6,900

Explanation:

When you use the incremental cost allocation method, you must rank cost activities and how they will be allocated. In this case, department 2 is the primary user, and therefore, rental costs must be allocated first to them. Rental costs will be allocated at a $25/hour rate.

Since department 1 is the next user, 100 hours will be allocated using the same rate as department 2, but the next 200 hours will be allocated at the lower $22/hour rate. Total rental cost allocation to department 1 = (100 x $25) + (200 x $22) = $2,500 + $4,400 = $6,900

5 0
3 years ago
Owns taxi (automobile) worth $1,315 A. Asset C. Both B. Liability D. Neither
lys-0071 [83]
A automobile would be a asset

5 0
3 years ago
A _________ approach is found frequently among companies with strong engineering orientations, pharmaceutical and biomedical fir
Korvikt [17]

Answer: Option B

   

Explanation: In simple words, top down approach refers to the approach ion which the organisation break down its system to have better and clear understanding of the sub systems within.

This approach is used by organisations doing complex business activities or involving high technical skills. Hence this approach is used by firms like biomedical ,financial services and high technology companies etc.

8 0
3 years ago
As the winter holiday season was approaching, Margie decided to give each team a window display or an indoor display to decorate
Flura [38]

Answer:

The answer is autonomy (Option D)

Explanation:

Autonomy in human resource management refers to the level or degree of discretion and freedom which an employee is permitted to exercise when performing his/her job.  In other words, it means granting employees the freedom on how to approach work.  

A manager or superior like Margie (in the question) who gives employees autonomy simply gives minimal instruction on what needs to be achieved but allows the employees to go about the job in ways that best suit them.

7 0
3 years ago
Other questions:
  • An online buying club offers a membership for $115, for which you will receive a discount of 10 percent on all brand-name items
    14·1 answer
  • What is importing?<br> HELP FAST PLS THX
    11·2 answers
  •   Which of the following business entities would allow you the most personal control?
    14·2 answers
  • When the money market is drawn with the value of money on the vertical axis, the price level increases if Group of answer choice
    9·1 answer
  • Which term describes the cost to replace property minus the deduction for depreciation?
    5·1 answer
  • The optimum approach for escalation is based on a thorough integration of the monitoring process into the
    10·1 answer
  • Eric receives a portion of his income from his holdings of interest-bearing U.S. government bonds. The bonds offer a real intere
    6·1 answer
  • 5. Based on the data in the table below, what is the probability that a driver aged
    10·2 answers
  • If these patterns hold for decreases as well as for increases, by how much would the value of the financial securities decline i
    13·1 answer
  • in a typical balance of payments crisis part 2 a. the interest parity curve shifts out. b. the interest parity curve shifts in.
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!