FREE Trial

The No-Shoplift Security Company is interested in bidding on a contract to provide a new security system for a large

Question:

The No-Shoplift Security Company is interested in bidding on a contract to provide a new security system for a large department store chain. The new security system would be phased into ten stores per year for five years. No-Shoplift can purchase the hardware for $50,000 per installation. The labor and material cost per installation is approximately $15,000. In addition, No-Shoplift will need to purchase $100,000 in new equipment for the installation, which will be depreciated to zero using the straight-line method over five years. This equipment will be sold in five years for $25,000. Finally, an investment of $50,000 in net working capital will be needed. Assume that the relevant tax rate is 34 percent. If the No-Shoplift Security Company requires a 10 percent return on its investments, what price should it bid?

This problem has been solved!


Do you need an answer to a question different from the above? Ask your question!

Step by Step Answer:

Answer rating: 50% (10 reviews)

Tax rate 34 Required Return 10 Project life 5 years Initial investment New equipment 100 000 Depreciation 20 000 Salvage value 25 000 Installation cos…View the full answer


answer-question
Answered By
tutor-profile-image
Branice Buyengo Ajevi
I have been teaching for the last 5 years which has strengthened my interaction with students of different level.
4.30+ 1+ Reviews 10+ Question Solved
Related Book For  answer-question
Introduction to Finance Markets, Investments and Financial Management

Introduction to Finance Markets, Investments and Financial Management

ISBN: 978-1119398288

16th edition

Authors: Ronald W. Melicher, Edgar A. Norton

See More Books
Question Details
Chapter # 17
Section: Problem
Problem: 7
View Solution
Create a free account to access the answer
Cannot find your solution?
Post a FREE question now and get an answer within minutes. * Average response time.
Question Posted: June 12, 2019 11:22:35
See More Questions

Students also viewed these Business questions

Q:
For each of the situations listed, identify the primary standard from the IMA Statement of Ethical Professional Practice that is violated (competence, confidentiality, integrity, or credibility). 1....
A:
1 Dawn works in Accounting at White Star Consulting She does not disclose that one of the companies......
Q:
On June 30, the end of the current fiscal year, the following information is available to BND Corporation's accountants for making adjusting entries: a. Among the liabilities of the company is a...
A:
1 a June 30 Interest Expense 12 000 Interest Payable 12 000 To record accrued interest on mortgage b......
Q:
The following is a list of independent events: 1. A company pays $10,000 cash to purchase equipment at a bankruptcy sale. The equipment's fair value is $15,000. 2. A Canadian company purchases...
A:
a and b 1 This is a transaction that should be recorded in the accounts as there has been an exchang......
Q:
The following data pertain to the securities of Linford Company during 2012, the companys first year of operations: a. Purchased 400 shares of Persimmon Corporation stock at $40 per share plus a...
A:
a Investment in Trading Securities Persimmon Corporation 16 200 Cash 16 200 Purchased 400 shares at......
Q:
Find a polynomial p(x) of degree 3 such that: p(0) = p(l) = 1, p(-1) = 2, p(-2) = -3
A:
If p x r 0 r 1 x r 2 x 2 r 3 x 3 the conditions g......
Q:
During 2017, Matti Conners, president of Maggert Company, was paid a semimonthly salary of $5,500. Compute the amount of FICA taxes that should be withheld from her: HI OASDI a. 9th paycheck b. 22nd...
A:
OASDI HI a 9th paycheck 341 00 79 75 b 22nd pa......
Q:
What is the order of the four steps in Deming's Cycle for Continuous Improvement? A. Plan, do, check, and act B. Do, plan, act, and check C. Check, do, act, and plan D. Act, check, do, and plan
A:
D Ac......
Q:
Equipment acquired on January 4, 2009, at a cost of $425,000, has an estimated useful life of nine years and an estimated residual value of $65,000. a. What was the annual amount of depreciation for...
A:
a 2009 depreciation expense 40 000 425 000 65 000 9 2010 depreciation expe......
Q:
As a new incoming CEO for a 100-bed community hospital located in a metropolitan area, you have learned of a situation that is causing a morale issue within your nursing department. The situation is...
A:
Addressing the morale issue in the nursing department and preventing its recurrence is crucial for the overall health and efficiency of the hospital T......
Q:
The financial statements of Columbia Sportswear Company are presented in Appendix B. Financial statements of Under Armour, Inc. are presented in Appendix C. Instructions a. Based on the information...
A:
a Profit margin Net inc Net sales Gross profit rate Gross profit Net sales chg in oper inc Cu......
Q:
Caseys Baseball Bats is planning to export their product to the Asian market. They estimate up-front expenses of $1 million this year (year 0) and $3 million next year (year 1). Operating cash flows...
A:
Required rate of return 15 Given cash flow data Cash flow T......
Q:
Explain why determining a firms optimum debt/equity mix is important.
A:
Expected returns and value or interest......
Q:
Find the equilibrium when h = 1000 and N c = 1000 and r = 1.5. What would happen to solutions starting with values greater than the equilibrium? Use this information, and that in the previous...
A:
The equilibrium if it existed would be a solution of......
Q:
An individual owns 100% of a corporation. He has a desperate need for cash and wants to take out as much cash as possible. Corp. - CDA Balance of $25200 Bank Balance of $197800 GRIP...
A:
To determine the maximum amount of money that the corporation can pay to the individual while minimizing the tax consequences we need to consider the......
Q:
The following transactions related to the shares of Champion Corporation took place during the Number of common shares issued and outstanding at the beginning 2020 year: of the year: 1/1/2020...
A:
To calculate the weighted average number of common shares outstanding for the 2020 year we need to c......
Q:
Hospitality Hotel is a luxury hotel whose guests are mostly business travellers. In Australia, the Hospitality Hotel has three hotels located in Melbourne, Adelaide, and Sydney. Melbourne hotel has...
A:
Task 1 Logical Network Design Network Architecture Components Core Layer Data center for hosting ser......
Q:
1. Pick a futures that you are interested in. ie, a commodity (iron, barley, etc), financial futures (index), etc. 2. State the market your research is based on ie, ASX, CBOE, etc. 3. Put in a price...
A:
1 Futures of Interest Crude Oil Futures 2 Market NYMEX New York Mercantile Exchange 3 Price Chart Hypothetical Data Recent 2 Years Date Spot Price Fut......
Q:
4. Topological Sort What is the topological sort of the graph above? Show the process with the removed, in-degree, and zero degree tables as we did in class.
A:
Indegree Vertices in order 0 01 012 0123 01234 012345 0123456 01234567 0 0 1 0 done 0 2 3......
Q:
Let X1, . . . , Xn be a random sample from the exponential distribution with unknown parameter . Let 0 < 0 < 1 be two possible values of the parameter. Suppose that we wish to test the following...
A:
In the notation of this section f i x for i 0 1 The desired test has the following form reject H......
Q:
Is it a breach of fiduciary duty for a director of a real estate investment trust (REIT) negotiating a joint venture on behalf of the REIT with another director for the development of a portfolio of...
A:
In HMG Courtland Properties Inc v Gray 749 A 2d 94 Del Ch 1999 the Delaware Court of Chancery held that both directors violated their duty of loyalty to the REIT The court characterized Grays undisclo......
Profit From The Core A Return To Growth In Turbulent Times 1st Edition - ISBN: 1422131114 - Free Book