Martin Enterprises needs someone to supply it with 105,000 cartons of machine screws per year to support its manufacturing needs over the next five years, and you’ve decided to bid on the contract. It will cost you $720,000 to install the equipment necessary to start production; you’ll depreciate this cost straight-line to zero over the project’s life. You estimate that, in five years, this equipment can be salvaged for $68,000. Your fixed production costs will be $285,000 per year, and your variable production costs should be $9.40 per carton. You also need an initial investment in net working capital of $55,000. If your tax rate is 21 percent and you require a return of 9 percent on your investment, what bid price should you submit?CHEGG EXCEL

Make or buy eastside company incurs a total cost of $120,000 in producing 10,000 units of a component needed in the assembly of its major product. the component can be purchased from an outside supplier for $11 per unit. a related cost study indicates that the total cost of the component includes fixed costs equal to 50% of the variable costs involved. a. should eastside buy the component if it cannot otherwise use the released capacity? present your answer in the form of differential analysis. use negative sign represent a net disadvantage answer; otherwise do not use negative signs with your answers. cost from outside supplier $answer variable costs avoided by purchasing answer net advantage (disadvantage) to purchase alternative $answer b. what would be your answer to requirement (a) if the released capacity could be used in a project that would generate $50,000 of contribution margin? use negative sign represent a net disadvantage answer; otherwise do not use negative signs with your answers.