(Solution) Alson Enterprises needs someone to supply it with 168,000 cartons of machine screws per year to support its manufacturing needs over the next 8... > Snapessays.com

(Solution) Alson Enterprises needs someone to supply it with 168,000 cartons of machine screws per year to support its manufacturing needs over the next 8...

Alson Enterprises needs someone to supply it with 168,000 cartons of machine screws per year to support its manufacturing needs over the next 8 years, and you've decided to bid on the contract. It will cost you \$873,600 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 8 years, this equipment can be salvaged for \$56,000. Your fixed production costs will be \$268,800 per year, and your variable production costs should be \$9.52 per carton. You also need an initial investment in net working capital of \$84,000. If your tax rate is 34 percent and you require a 15 percent return on your investment, you should submit a bid price of \$

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This question was answered on: Sep 21, 2023

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