Which one of the following will increase a bid price?
A)a decrease in the fixed costs
B)a reduction in the net working capital requirement
C)a reduction in the firm's tax rate
D)an increase in the salvage value
E)an increase in the required rate of return

Question

Quizplus · Accepted Answer

An increase in the required rate of return will increase the bid price because the project needs to generate higher returns to meet the new rate, thus requiring a higher initial bid price to justify the investment.

Which One of the Following Will Increase a Bid Price