Transrail Is Bidding on a Project That It Figures Will

question 34

Essay

Transrail is bidding on a project that it figures will cost $400,000 to perform. Using a 25% markup, it will charge $500,000, netting a profit of $100,000. However, it has been learned that another company, Rail Freight, is also considering bidding on the project. If Rail Freight does submit a bid, it figures to be a bid of about $470,000. Transrail really wants this project and is considering a bid with only a 15% markup to $460,000 to ensure winning regardless of whether or not Rail Freight submits a bid.
a.
Prepare a profit payoff table from Transrail's point of view.
b.
What decision would be made if Transrail were conservative?
c.
If Rail Freight is known to submit bids on only 25% of the projects it considers, what decision should Transrail make?
d.
Given the information in (c), how much would a corporate spy be worth to Transrail to find out if Rail Freight will bid?

Simplify radical expressions, including square roots and higher-order roots.

Apply the concepts of square and cubed roots in solving geometric problems.

Understand and apply properties of exponents in simplification of expressions.

Perform operations with radical expressions, including addition, subtraction, and rationalization.

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Definitions:

Representative

An individual who acts on behalf of another person or group, often in a professional context to express or defend interests.

Reliable

Describes something or someone that consistently performs or behaves in a predictable and dependable manner.

Valid

Something that is logically sound, well-founded, or acceptable as per current laws or principles.

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