Question: You Plan to bid on a project with a useful life of 5 years that will require an initial investment of $68,000 in fixed assets.

You Plan to bid on a project with a useful life of 5 years that will require an initial investment of $68,000 in fixed assets. These assets will be depreciated straight-line to zero over the projects life. The relevent discount rate is 12.5 percent, the corporate tax rate is 21 percent, there is no additional investment in net working capital, and there is no salvage value. What is the minimal required amount of annual sales revenue given annual cash costs of $47,000?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

A DI has the following assets in its portfolio: $20 million in cash reserves with the Fed, $20 million in T-bills, and $35 million in mortgage loans. If it needs to dispose of its assets at short...

1- Bader us considering two independent projects. Project A costs $168 and has projected cash flows of $720, $592, and $417 for years 1 to 3, respectively. Project B costs $675 and cash flows of...

You plan to bid on a project with a life of 5 years that will require KD____________________ of fixed assets. These assets will be depreciated straight-line to zero over the project's life. Ignore...

Can someone please give me correct answer. I have posted this question earlier but one sick expert gave me wrong solution in 2 lines only. 14. You plan to bid on a project with a life of 5 years that...

You plan to bid on a project with a life of 5 years that will require 345$ of fixed assets. These assets will be depreciated straight-line to zero over the project's life. Ignore bonus depreciation....

Can someone please give me correct answer. I have posted this question earlier but one sick expert gave me wrong solution in 2 lines only. If you dont know finance stay away form this post. 14. You...

You plan to bid on a project with a life of 5 years that will require $68,000 of fixed assets. These assets will be depreciated straight-line to zero over the project's life. Ignore bonus...

1 - Introduction Bach Company is used in a simulation exercise, carried out in teams. It is intended to give realistic training in the use of accounting and financial statements for decision making,...

3-5 Bach Company Topic: Link between statement of financial position/balance sheet, income statement and statement of cash flows - notion of management 1 - Introduction Bach Company is used in a...

On the balance sheet, the net fixed assets (NFA) account is equal to the gross fixed assets (FA) account, which records the acquisition cost of fixed assets, minus the accumulated depreciation (AD)...

Marijuana is legalized and the price of marijuana falls. Draw the demand and supply curves for marijuana before and after it is legalized.

Even with efficient markets, investors must worry about their Blank _ _ _ _ _ _ . Multiple select question. level of risk exposure ability to identify overpriced securities ability to identify...

Calculate the mass in grams of 1.90 x 1024 molecules of SizH6. Give your answer to 3 significant figures. g Submit

=+ d. In this economy, what is the steady-state growth rate of output per worker Y/L? How do the saving rate s and the fraction of the labor force in universities u affect this steadystate growth...

=+would you predict for the following variables? a. The rate of growth of total income b. The level of income per worker c. The real rental price of capital d. The real wage

=+ b. In this economy, what is break-even investment (the amount of investment needed to keep capital per effective worker constant)?