Consider a project to supply 93 million postage stamps per year to the U.S. Postal Service for the next five years. You have an idle parcel of land available that cost $1,670,000 five years ago; if the land were sold today, it would net you $1,745,000 aftertax. The land can be sold for $1,741,000 after taxes in five years. You will need to install $5 million in new manufacturing plant and equipment to actually produce the stamps; this plant and equipment will be depreciated straight-line to zero over the project’s five-year life. The equipment can be sold for $520,000 at the end of the project. You will also need $540,000 in initial net working capital for the project, and an additional investment of $43,000 in every year thereafter. Your production costs are .41 cents per stamp, and you have fixed costs of $980,000 per year. If your tax rate is 24 percent and your required return on this project is 11 percent, what bid price should you submit on the contract?
Consider a project to supply 93 million postage stamps per year to the U.S. Postal Service...
Consider a project to supply 97 million postage stamps per year to the U.S. Postal Service for the next five years. You have an idle parcel of land available that cost $1,690,000 five years ago; if the land were sold today, it would net you $1,765,000 aftertax. The land can be sold for $1,745,000 after taxes in five years. You will need to install $5.2 million in new manufacturing plant and equipment to actually produce the stamps; this plant and...
Consider a project to supply 90 million postage stamps per year to the U.S. Postal Service for the next five years. You have an idle parcel of land available that cost $1,655,000 five years ago; if the land were sold today, it would net you $1,730,000 aftertax. The land can be sold for $1,738,000 after taxes in five years. You will need to install $4.85 million in new manufacturing plant and equipment to actually produce the stamps; this plant and...
Consider a project to supply 94 million postage stamps per year to the U.S. Postal Service for the next five years. You have an idle parcel of land available that cost $1,675,000 five years ago; if the land were sold today, it would net you $1,750,000 aftertax. The land can be sold for $1,742,000 after taxes in five years. You will need to install $5.05 million in new manufacturing plant and equipment to actually produce the stamps; this plant and...
Consider a project to supply 106 million postage stamps per year to the U.S. Postal Service for the next five years. You have an idle parcel of land available that cost $1,735,000 five years ago; if the land were sold today, it would net you $1,810,000 aftertax. The land can be sold for $1,754,000 after taxes in five years. You will need to install $5.65 million in new manufacturing plant and equipment to actually produce the stamps; this plant and...
Consider a project to supply 107 million postage stamps per year to the U.S. Postal Service for the next five years. You have an idle parcel of land available that cost $1,740,000 five years ago; if the land were sold today, it would net you $1,815,000 aftertax. The land can be sold for $1,755,000 after taxes in five years. You will need to install $5.7 million in new manufacturing plant and equipment to actually produce the stamps; this plant and...
Consider a project to supply 102 million postage stamps per year to the U.S. Postal Service for the next five years. You have an idle parcel of land available that cost $1,920,000 five years ago; if the land were sold today, it would net you $2,120,000 aftertax. The land can be sold for $2,320,000 after taxes in five years You will need to install $5.42 million in new manufacturing plant and equipment to actually produce the stamps; this plant and...
Consider a project to supply 102 million postage stamps per year to the U.S. Postal Service for the next five years. You have an idle parcel of land available that cost $1,920,000 five years ago; if the land were sold today, it would net you $2,120,000 aftertax. The land can be sold for $2,320,000 ter taxes in five years You will need to install $5.42 million in new manufacturing plant and equipment to actually produce the stamps; this plant and...
Consider a project to supply 102 million postage stamps per year to the U.S. Postal Service for the next five years. You have an idle parcel of land available that cost $1,920,000 five years ago; if the land were sold today, it would net you $2,120,000 aftertax. The land can be sold for $2,320,000 after taxes in five years You will need to install $5.42 million in new manufacturing plant and equipment to actually produce the stamps; this plant and...
points Consider a project to supply 97 million postage stamps per year to the U.S. Postal Service for the next five years. You have an idle parcel of land available that cost $1,690,000 five years ago, if the land were sold today, it would net you $1,765,000 aftertax. The land can be sold for $1,745,000 after taxes in five years. You will need to install $5.2 million in new manufacturing plant and equipment to actually produce the stamps, this plant...
Consider a project to supply 102 million postage stamps per year to the U.S. Postal Service for the next five years. You have an Idle parcel of land available that cost $1.715,000 five years ago, If the land were sold today. It would net you $1.790,000 aftertax. The land can be sold for $1,750,000 after taxes In five years. You will need to Install $5.45 million in new manufacturing plant and equipment to actually produce the stamps; this plant and...