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:

British Pound

The official currency of the United Kingdom, also known as GBP (Great British Pound).

Spot Price

The current market price at which a particular asset, like a commodity or currency, can be bought or sold for immediate delivery.

Wheat Future

A standardized contract traded on futures exchanges to buy or sell a specific amount of wheat at a predetermined price on a specified future date.

Profit

Profit refers to the financial gain that is realized when the amount of revenue gained from a business activity exceeds the expenses, costs, and taxes needed to sustain the activity.