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:

Tax Free

Refers to financial income or accounts that are not subject to taxation by the government, often used to encourage specific investments or savings.

Variable Annuity

A type of annuity plan that allows the contract owner to choose investments which then dictate the fluctuation of the payout amounts.

Life Expectancy

Life Expectancy is the statistical measure that reflects the average period a person is expected to live, based on demographic factors.

Governance

Governance encompasses all of the processes of governing, whether undertaken by a government, market, or network, over a social system (family, tribe, formal or informal organization, a territory or across territories) and whether through the laws, norms, power or language of an organized society.