Your Company Wants to Bid on the Sale of 10

question 318

Multiple Choice

Your company wants to bid on the sale of 10 customized machines per year for five years. The initial costs for the project are $1.6 million with a salvage value of $800,000 after five years. The
Manufacturing equipment belongs in a 30% CCA class. Annual fixed costs are estimated at
$700,001. Variable cost per machine is $81,501. The project requires net working capital of
$120,001. The company has a 34% tax rate and desires a 15% return on the project. What is the
Minimum price that the company should bid per single machine?

• A) $197,320
• B) $212,028
• C) $219,887
• D) $221,009
• E) $223,619

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Definitions:

Cluster Sampling

An approach to sampling in which the entire population is split into various segments, with a random selection of these segments being picked for examination.

Stratified Random Sampling

A sampling method that divides the population into smaller groups, or strata, based on shared characteristics before randomly selecting participants from each stratum.

City's Beaches

City's beaches refer to the coastal waterfronts that are within or adjacent to a city, often developed for recreational and tourism activities.

Stratified Random Sampling

A method of sampling that involves dividing a population into smaller groups known as strata and then randomly selecting samples from each of these groups.