3. You are working on a bid to build two on-campus housing units a year for...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
3. You are working on a bid to build two on-campus housing units a year for the next 3 years for WSU. This project requires the purchase of $400,000 of equipment that will be depreciated using straight-line depreciation to a zero-book value over the project's life. The equipment can be sold at the end of the project for $125,000. You will also need $80,000 in net working capital over the life of the project. The fixed costs will be $30,000 a year and the variable costs will be $200,000 per building. Your required rate of return is 12 percent for this project and your tax rate is 35 percent. What is the minimal amount, rounded to the nearest $100, you should bid per housing unit? (13 points) 3. You are working on a bid to build two on-campus housing units a year for the next 3 years for WSU. This project requires the purchase of $400,000 of equipment that will be depreciated using straight-line depreciation to a zero-book value over the project's life. The equipment can be sold at the end of the project for $125,000. You will also need $80,000 in net working capital over the life of the project. The fixed costs will be $30,000 a year and the variable costs will be $200,000 per building. Your required rate of return is 12 percent for this project and your tax rate is 35 percent. What is the minimal amount, rounded to the nearest $100, you should bid per housing unit? (13 points)
Expert Answer:
Posted Date:
Students also viewed these finance questions
-
How does feedback value relate to predictive ability and accountability?
-
What are the major limitations of the balance sheet as a source of information?
-
A certain atom is in the state in which S = 2, the total angular momentum M = 2h, and the magnetic moment is equal to zero. Write the spectral symbol of the corresponding term.
-
At the beginning of the year, KMF Inc. issued \($200\) million aturity value) of 15-year, zero-coupon debentures, at a time when the yield rate was four percent per period. The KMF, Inc. bonds would...
-
In an attempt to increase tax revenues, legislators in several states have introduced legislation that would increase state excise taxes. Examine the impact of such an increase on the equilibrium...
-
Trends of the effects of covid 19 on supply chain management
-
o Find the torque must be applied the limk-2 to retain the static equilibrium (Both graphical and analytical) o Hint: Use superposition A OA = 250 mm 2 * 45 Nm AB = 400 mm 60 AC = 0,0, = 700 mm: %3D...
-
What are the factors that shape software modeling?
-
What are the four concepts that are essential to the extended object-oriented approach to software development?
-
How does encapsulation protect business rules from unauthorized access and manipulation?
-
What are the advantages and weaknesses of the CMM (Capability Maturity Model) approach?
-
What are the characteristics of business domains? Explain them in the context of a specific business.
-
Statements of Allegations of the staff of the Ontario Securities Commission and the U.S. Securities and Exchange Commission against Obiero Corporation and four of its current and former executives....
-
In Problems, solve each system of equations. x + 2y + 3z = 5 y + 11z = 21 5y + 9z = 13
-
State whether the following are true or false. If false, explain why. (a) Gross profit ratio (b) Net profit ratio (c) Current ratio Gross profit Revenue Net profit after taxation Average capital...
-
Devise a set of non-financial performance indicators which might be appropriate for monitoring: (a) The Police (b) The Post Office (now known as Royal Mail in the UK)
-
Each of the main financial statements provides a distinct set of financial ratios. Discuss this statement.
Study smarter with the SolutionInn App