{ "key_pair_value_system": true, "answer_rating_count": "", "question_feedback_html": { "html_star": "", "html_star_feedback": "" }, "answer_average_rating_value": "", "answer_date_js": "2024-05-27T15:02:06-04:00", "answer_date": "2024-05-27 15:02:06", "is_docs_available": "", "is_excel_available": "", "is_pdf_available": "", "count_file_available": 0, "main_page": "student_question_view", "question_id": "1785871", "url": "\/study-help\/questions\/the-technique-for-calculating-a-bid-price-can-be-extended-1785871", "question_creation_date_js": "2024-05-27T15:02:06-04:00", "question_creation_date": "May 27, 2024 03:02 PM", "meta_title": "[Solved] The technique for calculating a bid price | SolutionInn", "meta_description": "Answer of - The technique for calculating a bid price can be extended to many other types of problems. Answer the following questi | SolutionInn", "meta_keywords": "technique,calculating,bid,price,extended,types,problems,answer,questions,setting,set,project", "question_title_h1": " The technique for calculating a bid price can be extended to many other types of problems. Answer the following questions using the same technique", "question_title": " The technique for calculating a bid price can be extended to", "question_title_for_js_snippet": "The technique for calculating a bid price can be extended to many other types of problems Answer the following questions using the same technique as setting a bid price that is, set the project NPV to zero and solve for the variable in question Guthrie Enterprises needs someone to supply it with 152,000 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 $1,920,000 to install the equipment necessary to start production you'll depreciate this cost straight line to zero over the project's life You estimate that in five years this equipment can be salvaged for $162,000 Your fixed production costs will be $277,000 per year, and your variable production costs should be $10 60 per carton You also need an initial investment in net working capital of $142,000 The tax rate is 22 percent and you require a return of 12 percent on your investment Assume that the price per carton is $17 20 a Calculate the project NPV (Do not round intermediate calculations and round your answer to 2 decimal places, e g , 32 16 ) b What is the minimum number of cartons per year that can be supplied and still break even (Do not round intermediate calculations and round your answer to the nearest whole number, e g , 32 ) c What is the highest fixed costs that could be incurred and still break even (Do not round intermediate calculations and round your answer to 2 decimal places, e g , 32 16 ) NPV Quantity of cartons Fixed costs", "question_description": "\"image", "transcribed_text": "The technique for calculating a bid price can be extended to many other types of problems. Answer the following questions using the same technique as setting a bid price; that is, set the project NPV to zero and solve for the variable in question. Guthrie Enterprises needs someone to supply it with 152,000 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 $1,920,000 to install the equipment necessary to start production; you'll depreciate this cost straight-line to zero over the project's life. You estimate that in five years this equipment can be salvaged for $162,000. Your fixed production costs will be $277,000 per year, and your variable production costs should be $10.60 per carton. You also need an initial investment in net working capital of $142,000. The tax rate is 22 percent and you require a return of 12 percent on your investment. Assume that the price per carton is $17.20. a. Calculate the project NPV. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the minimum number of cartons per year that can be supplied and still break even? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) c. What is the highest fixed costs that could be incurred and still break even? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) NPV Quantity of cartons Fixed costs", "related_book": { "title": "Essentials of Accounting for Governmental and Not-for-Profit Organizations", "isbn": "007352705X, 978-0073527055", "edition": "10th Edition", "authors": "Paul A. Copley", "cover_image": "https:\/\/dsd5zvtm8ll6.cloudfront.net\/si.question.images\/book_images\/77.jpg", "uri": "\/textbooks\/essentials-of-accounting-for-governmental-and-not-for-profit-organizations-10th-edition-77", "see_more_uri": "" }, "free_related_book": { "isbn": "1118321766", "uri": "\/textbooks\/introduction-to-organic-chemistry-5th-edition-978-1118321768-157903", "name": "Introduction To Organic Chemistry", "edition": "5th Edition" }, "question_posted": "2024-05-27 15:02:06", "see_more_questions_link": "\/study-help\/questions\/business-corporate-finance-2020-July-01", "step_by_step_answer": "The Answer is in the image, click to view ...", "students_also_viewed": [ { "url": "\/study-help\/questions\/when-curly-had-to-leave-the-stooges-shemp-suggested-that-634634", "description": "1. Suppose that a stoichiometric mixture of isooctane (C8H18) and air is burned in an engine and then the fuel is changed to 10% (by liquid volume) ethanol and 90% by liquid volume isooctane. 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