Question
In: Finance
•Alton Enterprises needs someone to supply it with 175,000 cartons of machine screws per year to...
•Alton Enterprises needs someone to supply it with 175,000 cartons of machine screws per year to support its manufacturing needs over the next 5 years, and you have decided to bid on the contract. It will cost you $570,000 to install the equipment necessary to start production. The equipment belongs to asset class 10 (30% CCA rate) and you estimate that it can be salvaged for $77,000 at the end of the 5-year contract. Your fixed production costs will be $182,000 per year, and your variable production costs would be $6.25 per carton. You also need an initial NWC investment of $75,000 (assume this will be recovered at the end of the project). You corporate tax rate is 40% and you require a 20% return on your investment.
2.What is your breakeven price per carton?
Solutions
jeff jeffy answered 1 year agoRelated Solutions
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