You have the opportunity to bid on a project that involves manufacturing 110,000 units per year for four years. The project will require $698,000 in fixed assets that would be depreciated straight-line to zero over the project's life. These assets have an expected pretax salvage value of $149,000 at the end of the project. The project would require $56,000 of net working capital, all of which is recoverable, along with $312,000 in annual expenses. 

What is the minimum price per unit you should bid on this project if you require a rate of return of 18 percent and have a tax rate of 34 percent?

Answer rating: 100% (QA)

To determine the minimum price per unit you should bid on the project we need to calculate the net p... View the full answer