Business, 23.12.2020 03:50, RayQuan115

Cougar Athletics is soliciting bids on a 3-year contract to produce 5,000 t-shirts per year to be given away at athletic events. You have decided to bid on the contract. It will cost you $4 per shirt in variable costs (buying plain t-shirts and paying an employee to imprint them) and $8,000 per year in fixed costs. A t-shirt printing machine will cost $17,500. The machine will be depreciated to zero over its 3-year life and it will not have any salvage value. There are no net working capital implications for the project. If your tax rate is 21% and your required return on this project is 12%, how much would you bid for the contract? State your answer as the annual sales amount (to 2 decimal places, $XX, XXX. XX), not the per-unit price. Write up your solutions by hand and email them to me after the exam (do NOT send a spreadsheet).

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Cougar Athletics is soliciting bids on a 3-year contract to produce 5,000 t-shirts per year to be gi...