Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Can you please answer in this file format! The OCF Sheet is blank so let me know what to put in it. Thank you! Bidding

image text in transcribedCan you please answer in this file format!

The OCF Sheet is blank so let me know what to put in it. Thank you!

image text in transcribedimage text in transcribed

Bidding Problem (Excel Solver) Alton Enterprises needs someone to supply it with 150,000 cartons of machine screws per year to support its manufacturing needs over the next five years, and you've decided to bid on the contract. It will cost you $425,000 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 $50,000. Your fixed production costs will be $150,000 per year, and your variable production costs should be $6 per carton. You also need an initial investment in net working capital of $60,000. If your tax rate is 34 percent and you require at least a 20 percent return on your investment, calculate the lowest bid price you can submit (and not suffer from the winner's curse). 1 2 3 4 5 Inputs Project Length Initial Outlay NW Co Salvage Value Fixed Costs 6 7 8 Unit Price 9 10 Unit Variable Cost 11 12 Unit Sales Depreciation Tax Rate Required Return 13 14 15 16 17 18 19 20 21 22 23 24 Plagiarism Inputs OCF FCF + Year 0 1 2 3 4 5 Initial Investment OCF ANWC After-tax Salvage FCF NPV Bid Price Plagiarism Inputs OCF FCF +

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting Essentials For Hospitality Managers

Authors: Chris Guilding, Kate Mingjie Ji

4th Edition

1032024321, 9781032024325

More Books

Students also viewed these Accounting questions

Question

Discuss the scope of Human Resource Management

Answered: 1 week ago

Question

Discuss the different types of leadership

Answered: 1 week ago

Question

Write a note on Organisation manuals

Answered: 1 week ago

Question

Define Scientific Management

Answered: 1 week ago

Question

Explain budgetary Control

Answered: 1 week ago