You are an estimator at Eagle Construction and recently bid against Southern Construction Compant for a retaining wall project in Statesboro. Your construction cost was $1,125,572, and you added a 6% profit and overhead markup. The total bid price became $1,193,106. The Southern bid was $1,179,999. What profit and overhead markup would you need to add (or deduct) to your construction costs to get Southern's bid? Deduct 1.16% Add 1.16% Deduct 4.84% Add 4.84%
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- Condo Construction Company is bidding on an important construction job. The job will cot $2 million to complete. One other company is bidding for the job. Condo believes that the opponent's bid is equally likely to be any amount between $2 million and $4 million. If Condo wants to maximize its expected profit, what should it's bid be?Fabulous Fabricators needs to decide how to allocate space in its production facility this year. It is considering the following contracts: a. What are the profitability indexes of the projects? b. What should Fabulous Fabricators do? a. What are the profitability indexes of the projects? The profitability index for contract A is (Round to two decimal places.) Data table (Click on the following icon in order to copy its contents into a spreadsheet.) NPV Use of Facility Contract A $1.99 million 100% $0.96 million 50% $1.52 million 50% B с Print ACCES Done - XTrent Incorporated needs an additional worker on a multiyear project. It could hire an employee for a $65,000 annual salary. Alternatively, it could engage an independent contractor for a $72,000 annual fee. Trent's income tax rate is 21 percent. Compute the annual after-tax cost of each option and indicate which minimizes the after-tax cost of obtaining the worker. (Round all your intermediate calculations to the nearest whole dollar amount.) This was a homework question that I missed. Could you please help me figure out what I did wrong? My answer: After-tax cost of employee: $51,350 After-tax cost of independent contractor: $56,880
- Your company decided to offer product delivery service and would need a truck for the delivery. You are evaluating the following two options. Option 1: Your company can lease a truck at a pretax cost of $27,000 per year. Option 2: Your company can buy a truck at a cost of $84,000, with annual pretax maintenance expenses of $14,000. The truck will depreciate to zero on a straight-line basis. The truck has a 4 years life and will have a salvage value of $18,000 at the end of its life. If the tax rate is 35% and the discount rate is 10%, which option would you prefer? (Hint: compute the equivalent annual cost (EAC).)O Δ You work for a construction company that is considering a bid on a project to modernize the power grid in a country that is recovering from an earthquake. The cost to prepare the documentation that is necessary to submit the bid is $50,000. If a bid is submitted, you estimate that the project will be awarded with probability 0.5. The company's profit depends on the political situation prevalent in the country at the time of the project. Based on your experience, you conclude that with probability 0.2, the country would present favorable conditions and that the company would earn $240,000; with probability 0.7, the country would present stable conditions and the company would earn $140,000; and that with probability 0.1, the country would present unstable conditions and the company would lose 560,000. a. Would you recommend that the company bid on the project? b. Before your company bids on the project, what is the maximum amount you would pay for a forecast of the political…Tate Inc. and Booth Inc. are two small manufacturing companies that are considering leasing a cutting machine together. If Tate rents the machine on its own, it will cost $26,000. If Booth rents the machine alone, it will cost $14,000. If they rent the machine together, the cost will decrease to $36,000. Q. Calculate Tate’s and Booth’s respective share of fees using the Shapley value method
- Fabulous Fabricators needs to decide how to allocate space in its production facility this year. It is considering the following contracts: a. What are the profitability indexes of the projects? b. What should Fabulous Fabricators do? **round to two decimal places**Dante Development Corporation is considering bidding on a contract for a new office building complex. The following figure shows the decision tree prepared by one of Dante’s analysts. At node 1, the company must decide whether to bid on the contract. The cost of preparing the bid is $200,000. The upper branch from node 2 shows that the company has a 0.8 probability of winning the contract if it submits a bid. If the company wins the bid, it will have to pay $2 million to become a partner in the project. Node 3 shows that the company will then consider doing a market research study to forecast demand for the office units prior to beginning construction. The cost of this study is $150,000. Node 4 is a chance node showing the possible outcomes of the market research study.Nodes 5, 6, and 7 are similar in that they are the decision nodes for Dante to either build the office complex or sell the rights in the project to another developer. The decision to build the complex will result in an…You are the project manager for Becker Enterprises, LTD. and have been asked to analyze two alternatives for the company’s newest plastics The two alternatives, A and B, will perform the same task, but Alternative A will cost $80,000 to purchase while Alternative B will cost only $55,000. Moreover, the two alternatives will have very different cash flows and useful lives. The after-tax costs for the two projects are as follows: Year A B 0 $(80,000) $(55,000) 1 (20,000) (6,000) 2 (20,000) (6,000) 3 (20,000) (6,000) 4 (20,000) 5 (20,000) 6 (20,000) 7 (20,000) Calculate each project’s EAC, given a 10% discount Which of the alternatives do you think the company should select and why?
- Phoenix Products Inc. requires a new machine to produce a part for a solar air conditioner. Two companies have submitted bids, and you have been assigned the task of choosing one of the machines. Cash flow analysis indicates the following: Year Machine A Machine B 0 −$1,000 −$1,000 1 0 417 2 0 417 3 0 417 4 1,938 417 If the required rate of return for Phoenix Products is 5 percent, which of the following is the most valid statement? Group of answer choices The IRRA < IRRB, therefore accept Machine B. The NPVA < NPVB, therefore accept Machine B. The IRRA > IRRB, therefore accept Machine A. The NPVA > NPVB, therefore accept Machine A. None of these.You are evaluating two different silicon wafer milling machines. The Techron I costs $303,000, has a 3-year life, and has pretax operating costs of $84,000 per year. The Techron Il costs $525,000, has a 5-year life, and has pretax operating costs of $57,000 per year. For both milling machines, use straight-line depreciation to zero over the project's life and assume a salvage value of $61,000. If your tax rate is 25 percent and your discount rate is 13 percent, compute the EAC for both machines. (A negative answer should be Indicated by a minus sign. Do not round Intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Techron I Techron II Which machine do you prefer? Techron I Techron IIOuzts Corporation is considering Alternative A and Alternative B. Costs associated with the alternatives are listed below: Alternative A Alternative B Materials costs $ 49,000 $ 64,700 Processing costs $ 44,900 $ 44,900 Equipment rental $ 15,500 $ 15,500 Occupancy costs $ 17,400 $ 26,100 What is the financial advantage (disadvantage) of Alternative B over Alternative A? Garrison_16e_Rechecks_2019_10_10 Multiple Choice $126,800 $(24,400) $151,200 $(139,000)