In 2016, general dynamics corporation began selling a new line of products that carries a two-year warranty against defects. based upon past experience with other products, the estimated warranty costs related to dollar sales are as follows:

first-year of warranty 2%
second-year of warranty 5%
sales and actual warranty expenditures for 2016 and 2017 are presented below:

2016 2017
sales $600,000 $800,000
actual warranty expenditures $20,000 $40,000
what is the estimated warranty liability at the end of 2017 in $?

a. 20,000
b. 64,000
c. 38,000
d. 96,000

You are working on a bid to build two city parks a year for the next three years. this project requires the purchase of $249,000 of equipment that will be depreciated using straight-line depreciation to a zero book value over the three-year project life. ignore bonus depreciation. the equipment can be sold at the end of the project for $115,000. you will also need $18.000 in net working capital for the duration of the project. the fixed costs will be $37000 a year and the variable costs will be $148,000 per park. your required rate of return is 14 percent and your tax rate is 21 percent. what is the minimal amount you should bid per park? (round your answer to the nearest $100) (a) $214,300 (b) $214,100 (c) $212,500 (d) $208,200 (e) $208,400