Question
You are trying to win a government contract. Here is some information regarding this contract . You need to produce 5 modified trucks per year
You are trying to win a government contract. Here is some information regarding this contract
. You need to produce 5 modified trucks per year for 4 years
You can buy the truck platforms for $10,000 each ( this is a variable cost)
Facilities will be leased for $24,000 per year (you should realize this is a fixed cost)
Labor and material costs are $4,000 per truck (this is another variable cost)
Need $60,000 investment in new equipment, depreciated straight-line to a zero salvage
Actually expect to sell the equipment for $5000 at the end of 4 years
Need $40,000 in net working capital
Tax rate is 39%
Required return is 20%
What is the bid Price?
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