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You Are Working on a Bid to Build Four Small

question 195

Multiple Choice

You are working on a bid to build four small apartment buildings a year for the next three years for a local community. This project requires the purchase of $900,000 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 $400,000. You will also need $200,000 in net
Working capital over the life of the project. The ﬁxed costs will be $475,000 a year and the variable
Costs will be $140,000 per building. Your required rate of return is 12% for this project and your tax
Rate is 34%. What is the minimal amount, rounded to the nearest $500 that you should bid per
Building?

Grasp the principles of excess supply (surplus) and excess demand (shortage) and how they lead to adjustments in market prices.

Recognize the role of production costs and factor inputs on the supply side of the market.

Interpret market scenarios to determine the directional change in equilibrium price and quantity given shifts in supply and demand.

Distinguish between the short-term and long-term impacts of market changes on price and quantity.

Definitions:

Bookkeeping Practices

The systematic recording, organizing, and maintaining of financial transactions for a business or individual.

Toner Adhesion

The process by which toner powder in laser printers and copiers bonds to the paper, often involving heat and pressure to ensure the print is fixed and durable.

Printer Damage

Physical or functional harm caused to a printing device, often resulting from mishandling, mechanical failure, or external factors.

Personal Checking

A type of bank account that allows individuals to deposit, withdraw, and write checks against their balance for personal, not business, transactions.