Answered step by step
Verified Expert Solution
Question
1 Approved Answer
10:24 1 .ull Asynchronous Activity 1.2 (ACC352 Internati... Asynchronous Activity 1.2 10 marks Hi, Aon. When you submit this form, the owner will see your
10:24 1 .ull Asynchronous Activity 1.2 (ACC352 Internati... Asynchronous Activity 1.2 10 marks Hi, Aon. When you submit this form, the owner will see your name and email address. 1. Romo Enterprises needs someone to supply it with 140,000 cartons of machine screws per year to support its manufacturing needs over the next five years, and you have decided to bid on the contract. It will cost you $940,000 to install the equipment necessary to start production; you will depreciate this cost straight-line to zero over the project's life. You estimate that in five years, this equipment can be salvaged for $85,000. Your fixed production costs will be $435,000 per year, and your variable production costs should be $15.10 per carton. You also need an initial investment in net working capital of $90,000, all of which will be recovered when the project ends. Your tax rate is 35 percent and you require a 12 percent return on your investment. What bid price per carton should you submit? (10 Points) Enter your answer Submit
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started