You Are Working on a Bid to Build Four Cabins

question 91

Multiple Choice

You are working on a bid to build four cabins a year for the next three years for a local campground. This project requires the purchase of $66,000 of equipment which will be depreciated using
Straight-line depreciation to a zero book value over the three years. The equipment can be sold at
The end of the project for $40,001. You will also need $16,000 in net working capital over the life of
The project. The fixed costs will be $18,000 a year and the variable costs will be $88,000 per cabin.
Your required rate of return is 14% for this project and your tax rate is 34%. What is the minimal
Amount (rounded to the nearest $500) that you should bid per cabin?

• A) $95,000
• B) $95,500
• C) $97,000
• D) $98,500
• E) $115,000

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Definitions:

Repressed Impulses

Desires or inclinations that are suppressed and remain unexpressed due to their potentially disruptive or unacceptable nature to the conscious mind.

Psychoanalytic Perspective

A theory in psychology introduced by Freud which asserts that human behavior is influenced by unconscious drives and conflicts.

Political Dissidents

Individuals who oppose or criticize the policies of their government, often facing repression or punishment.

PTSD

Post-Traumatic Stress Disorder, a mental health condition triggered by experiencing or witnessing a traumatic event, characterized by severe ongoing anxiety and distress.