Assume a Firm Sets Its Bid Price for a Project

question 100

Essay

Assume a firm sets its bid price for a project at the minimum level as computed using the discounted cash flow method.Given this,what do you know about the net present value and the internal rate of return on the project as bid?

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Definitions:

Total Fixed

The sum of all costs that do not change with the level of production or business activity, such as rent or salaries.

Total Variable

The total of all costs that vary with the level of output or production.

Average Fixed Costs

The fixed costs of production (costs that do not vary with the level of output) divided by the quantity of output produced.

Drones

Unmanned aerial vehicles (UAVs) capable of flying autonomously or being controlled remotely, used for various purposes including photography, surveillance, and delivery.