Question
You have started a company that cleans the outside windows on large buildings. You bid on multi-year contracts with potential clients. In one case, a
You have started a company that cleans the outside windows on large buildings. You bid on multi-year contracts with potential clients. In one case, a property management firm is asking you for a quote on a 3-year cleaning contract with payments due at the end of each of those years. You figure that you face upfront costs from purchasing hardware and hiring and training staff of $15,400 at the start of the contract. In addition, annual run cost to satisfy the commitment to the client will add up to $1,550 per year (assumed at end of each year). A competitor has quoted $10503.0.
If your required rate of return is 9.2%, what is the break-even price you can charge per year? $. (Round to the nearest dollar.)
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