You Plan to Bid on a Project with a Life

question 44

Multiple Choice

You plan to bid on a project with a life of 5 years that will require $68,000 of fixed assets.These assets will be depreciated straight-line to zero over the project's life.Ignore bonus depreciation.The relevant discount rate is 12.5 percent,the tax rate is 21 percent,there is no interest expense,net working capital is unaffected,and there is no salvage value.What is the minimal required amount of annual sales revenue given annual cash costs of $47,900?

• A)$74,515.75
• B)$82,018.27
• C)$57,202.19
• D)$68,459.58
• E)$52,311.89

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Definitions:

Worthy

Deserving attention, effort, or respect due to qualities such as importance or nobility.

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A demographical term referring to people of Spanish-speaking origin or ancestry, particularly from Latin America and Spain.