Should companies bid for a project with a price under the "project bid price"? No, this will not make financial sense. It depends on the project payback time. Yes, because they will still have positive profits.

Should companies bid for a project with a price under the "project bid price"? No, this will not make financial sense. It depends on the project payback time. Yes, because they will still have positive profits.

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter14: Real Options

Section: Chapter Questions

Problem 4Q: If a company has an option to abandon a project, would this tend to make the company more or less...

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Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

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Should companies bid for a project with a price under the "project bid price"?
No, this will not make financial sense.
It depends on the project payback time.
Yes, because they will still have positive profits.

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