You will bid to supply three jets every year for each of, Ask an Expert

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problem: You will bid to supply three jets every year for each of the next 3 years to the Navy. To get set up, you will need dollar 60 million in equipment, to be depreciated straight line to zero over three years, with no salvage value. Total fixed costs per year are dollar 10 million, and variable costs are dollar 12 million per jet. Suppose a tax rate of 35% and a required return of 12 percent, estimate the minimum price at which you should offer to supply the jets?

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Basic Finance, Finance

Category:- Basic Finance
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