--%>
Assignment Help - homework help

what bid price per widget should you submit

You are required to submit a bid to supply 200,000,000 widgets per year to the State of Illinois for the next five years. Your company has an idle tract of real estate that cost $1,500,000 ten years ago; if your company sold the land today, it would generate $3,000,000 after the taxes were paid. The land can be sold for $3,500,000 after taxes in five years. You will need to install $4,900,000 in new plant and equipment to actually produce the widgets; this plant and equipment will be depreciated straight-line to zero over the projects five year life. The equipment can be sold for $610,000 at the end of the project. You will need $500,000 in initial working capital for the project, and an additional investment of $60,000 in every year thereafter. Your production costs are .6 cents per widget and you will have fixed costs of $800,000 per year. If your tax rate is 34% and your required return is 14%, what bid price per widget should you submit? 

   Related Questions in Financial Accounting

  • Q : Human race in our modern world Here are

    Here are two papers addressed to the in-class essay from the previous class. Study them in the context of the exact wording of the assignment and take some notes that will enable you to refer to specific features of the two papers when talking about their relative qua

    		•
  • Q : Major reasons of current account

    In contrast to the U.S., Japan has observed constant current account surpluses. What would be the major reasons for such surpluses? Is it advantageous to have constant current account surpluses?

    		•
  • Q : PPE The following information is taken

    The following information is taken from the financial statements of an entity: 20x4 20x3 Property, plant and equipment $4,600,000 $4,200,000 Accumulated depreciation (1,800,000) (1,350,000) Depreciation expense 560,000 Gain on disposal of PPE 65,000 The asset disposed of had a cost

    		•
  • Q : Evaluate the impact of a recent

    A 2000 word essay (maximum allowed 2,200) Accessing Learning Outcomes: Knowledge 1 and 2 Skills 1, 2, 3 and 5                 "Evaluate the impact of a recent healthcare initiative on nursing practice".<

    		•
  • Q : Merits of Budgetary Control Write down

    Write down the merits of Budgetary Control?

    		•
  • Q : Ppe Question 3 The following

    Question 3 The following information is taken from the financi al statements of an entity: 20x6 20x5 Property, plant and equipment $4,100,000 $3,600,000 Accumulated depreciation (1,400,000) (1,050,000) Depreciation expense 650,000 Gain on disposal of PPE 35,000 The asset disposed of had

    		•
  • Q : Hedging transaction exposure and money

    Compare and discuss the hedging transaction exposure by using the forward contract vs. money market instruments. When the optional hedging approaches do creates the same result?

    		•
  • Q : Problem on National income Providing

    Providing reasons, describe the treatment assigned to the following which estimates national income.(i) Family members working freely on farm owned by family.(ii) The Payment of interest on borrowings through general government.

    		•
  • Q : Define sales budget Give a short

    Give a short introduction of the term “sales budget”? While preparing the sales budget what are the factors which can be taken?

    		•
  • Q : Wind turbine I have started to design a

    I have started to design a wind turbine but I am stuck now. I would like you to have a look to my design and tell me what do I have to do.

    		•