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Should Bill bid on the contract? Why or why not?

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Can you please help with the attachment I have below;Attachment Preview;Experential Exercise Financials 11-16.docx Download Attachment;Experiential Exercise;The Project Proposal;Bill Sergent has just received a request for proposal (RFP) from a large computer firm. The firm is looking;for a supplier to provide it with high-tech components for a supercomputer being built for the Department;of Defense. Bills firm, which is only eight months old, was founded by a group of scientists and engineers;whose primary expertise is in the area of computers and high technology. Bill is thinking about making a;reply to the RFP, but first he wants to conduct a break-even analysis to determine how profitable the;venture will be. Following is the information he will use in his analysis;The computer firm wants 12 different components built, and the purchase price will be $11,000;per component.;The total cost of building the first component will be $20,000.;The cost of building each of the 11 other components will be $8,000, $6,000, $5,000, $4,000;$5,000, $6,000, $8,000, $11,000, $28,000, $40,000, and $40,000, respectively.;Bills company will not accept any proposal that will give it less than an 11 percent return on sales.;On the basis of this information, complete the following break-even chart, and then answer the two;questions.;1. Should Bill bid on the contract? Why or why not?;2. If Bill has some room for negotiation with the computer firm, what would you recommend he do?;Why?

 

Paper#24822 | Written in 18-Jul-2015

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