Question
You will bid to supply 5 Navy Destroyers per year for each of the next three years to the U.S. Navy. To get set up
You will bid to supply 5 Navy Destroyers per year for each of the next three years to the U.S. Navy. To get set up you will need $90 million in equipment, to be depreciated straight-line to zero over the next three years, with no salvage value. Total fixed costs per year are $10 million, and variable costs are $15 million per Destroyer. Assume a tax rate of 35 percent and a required return of 12 percent. What is the Net Income (NI) per year associated with this Navy Project? $3,545,674.67 $4,565,675.65 $5,565,654.54 $6,573,564.45 $7,471,408.25
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