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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

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Vesna [10]

Answer:

both activities would consider direct investment

3 0
3 years ago
Retscan, Inc. has assets of $625,000, liabilities of $385,000, and equity of $240,000. It buys office equipment on credit for $1
brilliants [131]

Answer: a. Assets increase by $125,000 and liabilities increase by $125,000

Explanation:

The Office equipment bought are considered PPE which means they are fixed assets. Their acquisition will increase the assets held by the company by the value of the equipment, $125,000.

The equipment was however, bought on credit. This means that the company still owes the suppliers, payment for it which will see their liabilities increase by the same amount of $125,000.

5 0
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Follow on public Offer(FPO) <br> it is in primary market or secondary?
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3 0
2 years ago
Baskets Inc. gathered the following actual results for the current month: Actual amounts: ​ Units produced 5600​ Direct material
Novosadov [1.4K]

Answer:

Direct Material Quantity Variance = $10200 Fav

Explanation:

given data

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to find out

direct materials quantity variance

solution

we get here Direct Material Quantity Variance that is express as

Direct Material Quantity Variance = (Standard Quantity - Actual Quantity) × Standard Rate     ......................1

so put here value we get

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Direct Material Quantity Variance = (11200 - 7800 ) × 3

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3 0
3 years ago
The following information is available for Cubic Company before closing the accounts. After all closing entries are made, what w
AysviL [449]

Answer:

Option (a) is correct.

Explanation:

Given that,

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= Retained earnings + Net income - Dividends

= $108,000 + $112,700 - $40,000

= $180,700

Hence, the balance in the retained earnings account is $180,700.

4 0
4 years ago
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