pany wants to bid on the sale of 10 customized machines per year for five years. The initial costs for the project are $1.6 million with a salvage value of $800,000 after five years. The machine will be depreciated straight-line to zero over the five years. Annual fixed costs are estimated at $700,000. Variable cost per machine is $81,500. The project requires net working capital of $120,000. The company has a 34% tax rate and desires a 15% return on the project. What is the minimum price that the company should bid per single machine? please show steps and formulas, im using
pany wants to bid on the sale of 10 customized machines per year for five years. The initial costs for the project are $1.6 million with a salvage value of $800,000 after five years. The machine will be depreciated straight-line to zero over the five years. Annual fixed costs are estimated at $700,000. Variable cost per machine is $81,500. The project requires net working capital of $120,000. The company has a 34% tax rate and desires a 15% return on the project. What is the minimum price that the company should bid per single machine? please show steps and formulas, im using
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Your company wants to bid on the sale of 10 customized machines per year for five years. The initial costs for the project are $1.6 million with a salvage value of $800,000 after five years. The machine will be
please show steps and formulas, im using a ba ii plus financial calculator.
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