Which One of the Following Statements Is Correct Concerning Bid

question 5

Multiple Choice

Which one of the following statements is correct concerning bid prices?

• A) The bid price is the maximum price that a firm should bid.
• B) A firm can submit a bid that is higher than the computed bid price and still break even.
• C) A bid price ignores taxes.
• D) A bid price should be computed based solely on the operating cash flows of the project.
• E) A bid price should be computed based on a zero percent required rate of return.

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Definitions:

Marginal Utility

The extra value or benefit derived from the use of one more unit of a product or service.

Additional Slice

Generally refers to an extra portion or piece of something, often used metaphorically to describe an additional amount or increment of a resource or benefit.

Marginal Utility

The extra pleasure or benefit gained from the consumption of an additional unit of a product or service.

Total Utility

The overall satisfaction or benefit received by consuming a particular quantity of goods or services.