Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. using financial calculator 25. calculating a bid

using financial calculator 25. Calculating a Bid Price (LO3] Consider a project to...

70.2K

Verified Solution

Question

Accounting

imageusing financial calculator
25. Calculating a Bid Price (LO3] Consider a project to supply 100 million postage stamps per year to the U.S. Postal Service for the next five years. You have an idle parcel of land available that cost $750,000 five years ago, if the land were sold today, it would net you $1,125,000 aftertax. The land can be sold for $1.295,000 after taxes in five years. You will need to install $5.1 million in new manufacturing plant and equipment to actually produce the stamps; this plant and equipment will be depreciated straight-line to zero over the project's five-year life. The equipment can be sold for $450,000 at the end of the project. You will also need $425,000 in initial networking capital for the project, and an additional investment of $50,000 in every year thereafter. Your production costs are .38 cents per stamp, and you have fixed costs of S1.1 million per year. If your tax rate is 23 percent and your required return on this project is 10 percent, what bid price should you submit on the contract

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

What is strain hardening and what is its difference with work hardening?

Mechanical Engineering
Q

(a) What is the difference between turning and milling? What is the difference between peripheral milling...

Mechanical Engineering
Q

Jobs Inc. has recently started the manufacture of Tri-Robo, a three wheeled robot that can scan...

Accounting
Q

A cohort is defined as:All of the individuals in a population born at the same...

Biology
Q

40 electric bulbs are connected in series across a 220 V supply After one bulb...

Physics
Q

Triangle QRS is similar to triangle TUV What is the measure of angle V XSA...

Geometry
Q

At I Love Food restaurant you can choose from 8 appetizers 8 entrees and 2...

Statistics
Q

A Norman window has the shape of a semicircle atop a rectangle so that the...

Calculus
Q

Consider the following function Find f x f x X Find all singular points in...

Algebra
Q

box empty; do not select any information and do not enter a zero. Abbreviations used:...

Accounting
Q

APPLY THE CONCEPTS: Prepare the operating activities section The income statement and comparative balance sheets...

Accounting
Q

Consider the following information: Rate of Return if State Occurs State of Economy Boom Good...

Finance