Question

In: Finance

Cougar Athletics is soliciting bids on a 3-year contract to produce 3,000 t-shirts per year to...

Cougar Athletics is soliciting bids on a 3-year contract to produce 3,000 t-shirts per year to be given away at athletic events. You have decided to bid on the contract. It will cost you $3 per shirt in variable costs (buying plain t-shirts and paying an employee to imprint them) and $5,000 per year in fixed costs. A t-shirt printing machine will cost $7,500. The machine will be depreciated to zero over its 3-year life and it will not have any salvage value. There are no net working capital implications for the project. If your tax rate is 20% and your required return on this project is 10%, how much would you bid for the contract? State your answer in the total price, not the per-unit price.

Solutions

Expert Solution

Please upvote if the solution is helpful. Thanks.


Related Solutions

Cougar Athletics is soliciting bids on a 3-year contract to produce 3,000 t-shirts per year to...
Cougar Athletics is soliciting bids on a 3-year contract to produce 3,000 t-shirts per year to be given away at athletic events. You have decided to bid on the contract. It will cost you $3 per shirt in variable costs (buying plain t-shirts and paying an employee to imprint them) and $5,000 per year in fixed costs. A t-shirt printing machine will cost $7,500. The machine will be depreciated to zero over its 3-year life and it will not have...
Q.3 Mohammed Garment Industry workers produce T- Shirts. The three basic processes of garment production are...
Q.3 Mohammed Garment Industry workers produce T- Shirts. The three basic processes of garment production are cutting, sewing and pressing. According to the Labour department there are 5 sewing operator, 10 cutting operators and 8 pressing operators. the Standard rate per hour for operators is OMR 25, Normal rate per hour is OMR 30, Normal rate per unit is OMR 25, Working hours per day are 8 hours, Standard Output per hour is 120 units. Five workers Khalid, Rashid, Ahmed,...
James Company manufactures t-shirts. During the year, it manufactured 250,000 t-shirts, using 2 hours of direct...
James Company manufactures t-shirts. During the year, it manufactured 250,000 t-shirts, using 2 hours of direct labor at a rate of $8.50 per hour. The materials and labor standards for manufacturing the t-shirts are: Direct materials (6 yards of fabric @ $3 per yard) $18 Direct labor (2.4 hours @ $8.00 per hour) 17 ​ It took James 1,400,000 yards at $2.50 per yard to make the 250,000 t-shirts. What is the entry to close the variances of labor and...
James Company manufactures t-shirts. During the year, it manufactured 250,000 t-shirts, using 2 hours of direct...
James Company manufactures t-shirts. During the year, it manufactured 250,000 t-shirts, using 2 hours of direct labor at a rate of $8.50 per hour. The materials and labor standards for manufacturing the t-shirts are: Direct materials (6 yards of fabric @ $3 per yard) $18 Direct labor (2.4 hours @ $8.00 per hour) 17 ​ It took James 1,400,000 yards at $2.50 per yard to make the 250,000 t-shirts. What is the entry to record the purchase of materials? a....
2. A city is hosting an annual marathon event and wants to produce t-shirts. Maria was...
2. A city is hosting an annual marathon event and wants to produce t-shirts. Maria was able to obtain previous years’ demand and probability data as given in below table. She also estimates: Selling price is $10, cost is $3, and the salvage value is $1. Calculate all numbers in the payoff table. Show all work. How many shirts should be made to maximize profit? Demand = 1000, 20% Demand = 2000, 30% Demand = 3000, 30% Demand = 4000,...
If an investment requiring a $20,000 initial investment is forecasted to produce income of $3,000 per...
If an investment requiring a $20,000 initial investment is forecasted to produce income of $3,000 per year for five years and will be sold at the end of year 5 for $20,000, what is its projected IRR?
You are bidding on a contract to supply 100,000 scarves per year for the next 3...
You are bidding on a contract to supply 100,000 scarves per year for the next 3 years. To pursue this project, you must purchase $10,000 in new equipment today, which you will depreciate straight-line to zero over 3 years. The cost to you is $5.00 per scarf plus $20,000 per year in fixed costs. The project requires no additional net working capital investment and there is no salvage value for the equipment you will purchase. You have a required return...
You are bidding on a contract to supply 100,000 scarves per year for the next 3...
You are bidding on a contract to supply 100,000 scarves per year for the next 3 years. To pursue this project, you must purchase $10,000 in new equipment today, which you will depreciate straight-line to zero over 3 years. The cost to you is $5.00 per scarf plus $20,000 per year in fixed costs. The project requires no additional net working capital investment and there is no salvage value for the equipment you will purchase. You have a required return...
Brenda and Sam produce Bread and Shirts per hour consistent with the following table. Brenda Sam...
Brenda and Sam produce Bread and Shirts per hour consistent with the following table. Brenda Sam Bread per hour 6 1 Shirts per hour 2 1 a). Who have comparative advantage in bread production? b). Who has comparative advantage in shirt production? c). Is trade profitable between the two?
The Shirt Shop had the following transactions for T-shirts for Year 1, its first year of...
The Shirt Shop had the following transactions for T-shirts for Year 1, its first year of operations: Jan. 20 Purchased 490 units @ $ 8 = $ 3,920 Apr. 21 Purchased 290 units @ $ 10 = 2,900 July 25 Purchased 370 units @ $ 13 = 4,810 Sept. 19 Purchased 180 units @ $ 15 = 2,700 During the year, The Shirt Shop sold 1,080 T-shirts for $24 each. b. Record the above transactions in general journal form and...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT