MCQ 10-61 Run Inc. is invited to bid on supplying... Run Inc. is invited to bid on supplying five Hurry-Up machines to Flee Corporation for each of the next four years. To build these machines, Run Inc. will have to invest $70,000 in new plants and equipment. The equipment is subject to CCA rate of 30%, and will have a salvage value of zero at the end of four years. The construction of the machines will require variable cost of $4,500 per unit and annual fixed costs of $12,000. Run Inc.'s required return is 15% and it faces a marginal corporate tax rate of 36%. How much must Run Inc. bid for each of the Hurry-Up machines? Multiple Choice $13,036 $9,234 $22,443 $12,843 $12,068

MCQ 10-61 Run Inc. is invited to bid on supplying... Run Inc. is invited to bid on supplying five Hurry-Up machines to Flee Corporation for each of the next four years. To build these machines, Run Inc. will have to invest $70,000 in new plants and equipment. The equipment is subject to CCA rate of 30%, and will have a salvage value of zero at the end of four years. The construction of the machines will require variable cost of $4,500 per unit and annual fixed costs of $12,000. Run Inc.'s required return is 15% and it faces a marginal corporate tax rate of 36%. How much must Run Inc. bid for each of the Hurry-Up machines? Multiple Choice $13,036 $9,234 $22,443 $12,843 $12,068

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter10: Project Cash Flows And Risk

Section: Chapter Questions

Problem 13PROB

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MCQ 10-61 Run Inc. is invited to bid on supplying...

Run Inc. is invited to bid on supplying five Hurry-Up machines to Flee Corporation for each of the next four years. To build these machines, Run Inc. will have to invest $70,000 in new plants and equipment. The equipment is subject to CCA rate of 30%, and will have a salvage value of zero at the end of four years. The construction of the machines will require variable cost of $4,500 per unit and annual fixed costs of $12,000. Run Inc.'s required return is 15% and it faces a marginal corporate tax rate of 36%. How much must Run Inc. bid for each of the Hurry-Up machines?

Multiple Choice

$13,036
$9,234
$22,443
$12,843
$12,068

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