Computation of equivalent annual cash flows for making, Ask an Expert

Finance

Computation of Equivalent Annual cash flows for making decision regarding Bid Price.

Calculating a Bid Price

Heer Enterprises needs someone to supply it with 252,000 cartons of machine screws per year to support its manufacturing needs over the next 7 years, and you've decided to bid on the contract. It will cost you $1,310,400 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 7 years, this equipment can be salvaged for $84,000. Your fixed production costs will be $403,200 per year, and your variable production costs should be $126.000. If your tax rate is 32 percent and you require a 17 percent return on your investment, you should submit a bid price of $________. (Round your answer to 2 decimal places, e.g 32.16)

View complete question

Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M9162286

Have any Question?Write your Review or question?

Related Questions in Basic Finance

Assume that your brother wants to buy shares of either

Assume that your brother wants to buy shares of either Company A or B and is looking for your advice on how to use the financial statements of the companies to make his investment decisions. Which information in the fina ...

Question - find and read 2 articles about a recent merger

Question - Find and read 2 articles about a recent merger or acquisition. Write a paper of approximately 900 words for each article that answers the following questions: • What alternatives to the merger or acquisition m ...

Sheridan company plans to introduce a new product and is

Sheridan Company plans to introduce a new product and is using the target cost approach. Projected sales revenue is $1770000 ($6.00 per unit) and target costs are $1563500. What is the desired profit per unit?

Pk software has 76 percent coupon bonds on the market with

PK Software has 7.6 percent coupon bonds on the market with 23 years to maturity. The bonds make semiannual payments and currently sell for 108.25 percent of par. What is the current yield on PK's bonds? (Do not round i ...

In 1980 the dow jones industrial average stood at 891 in

In 1980 the Dow Jones Industrial Average stood at 891. In the year 2017, the Dow Jones was 22,387. What was the annual return over this period?

We have the following investments in our

We have the following investments in our portfolio: Investment Amount Expected Return Beta A Stock $2,000 ...

Sam has had the following transactions during the

Sam has had the following transactions during the year: Gambling losses $3,000 New suit for work $500 Tax Preparation Fees $1,000 Investment mgmt fee $2,200 Sam's AGI of $110,000 is broken down as follows: Earned income ...

Questions -q1 techno stock was 25 per share at the end of

Questions - Q1: TechNo stock was $25 per share at the end of last year. Since then, it paid a $1.50 per share dividend last year. The stock price is currently $23. If you owned 300 shares of TechNo, what was your percent ...

Discuss hsbc ring-fencing strategy and the setting up of

Discuss HSBC ring-fencing strategy and the setting up of HSBC UK?

Question during 2014 its first year of operations as a

Question: During 2014, its first year of operations as a delivery service, Loonie Corp. entered into the following transactions. 1. Issued shares of common stock to investors in exchange for $80,000 in cash. 2. Borrowed ...

4,153,160 Questions Asked
13,132 Experts
2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Recent Questions

Ask Basic Finance Expert