Question
Dahlia Enterprises needs someone to supply it with 120,000 cartons of machine screws per year for the next five years. It will cost you $870,000
Dahlia Enterprises needs someone to supply it with 120,000 cartons of machine screws per year for the next five years. It will cost you $870,000 to install the necessary equipment to start production; youll depreciate this straight-line to zero over five years. The estimated salvage value is $70,000. Your fixed production costs will be $325,000 per year and your variable productions costs will be $10.30 per carton. You also need initial NWC of $75,000, which will be returned at the end of the project. if your tax rate is 35% and you require a 12% return on investment, what bid price( per unit) should you submit
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