Question: Please solve (a) and (b) asap!!!!!!!! a. Osaka Enterprises needs someone to supply it with 170,000 cartons of machine screws per year to support its

 Please solve (a) and (b) asap!!!!!!!! a. Osaka Enterprises needs someone

Please solve (a) and (b) asap!!!!!!!!

a. Osaka Enterprises needs someone to supply it with 170,000 cartons of machine screws per year to support its manufacturing needs over the next five years, and you've decided to bid on the contract. It will cost you $510,000 to install the equipment necessary to start production; you'll depreciate this cost straight-line to zero over the project's life. You estimate that in five years, this equipment can be salvaged for $40,000. Your fixed production costs will be $160,000 per year, and your variable production costs should be $8 per carton. You also need an initial investment in net working capital of $60,000. If your tax rate is 35 percent and you require a 16 percent return on your investment, what bid price should you submit? 0.2 b. i. Consider the following information on stock A and B: State of Economy Probability of Rate of Return if State Occurs State of Economy Stock A Stock B Recession 0.09 -0.30 Normal 0.6 0.42 0.12 Irrational exuberance 0.2 0.26 0.44 The market risk premium is 10%, and the risk-free rate is 4%. Required: a) Which stock has the most systematic risk? b) Which one has the most unsystematic risk? c) Which stock is "riskier" Explain? d) Is the Security market line constant over time? Why or why not? ii. Differentiate between: a) Debt and Equity financing b) Systematic risk and unsystematic risk

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