Ch12-3

Ch. 12 Homework O a ezto.mheducation.com Saved Help Problem 12-18 Net Present Value Analysis [L012-2] Oakmont Company has an opportunity to manufacture and sell a new product for a four-year period. The company's discount rate i 14%. After careful study, Oakmont estimated the following costs and revenues for the new product: 2 points eBook Print O References Cost of equipment needed Working capital needed Overhaul of the equipment in year two Salvage value of the equipment in four Annual revenues and costs: Sales revenues Variable expenses Fixed outofpocket operating costs yea rs $ 140, $ 62,000 9,000 $ 13,000 $ 270, $ 130, $ 72, When the project concludes in four years the working capital will be released for investment elsewhere within the company. Click here to view Exhibit 12B-1 and Exhibit 1?B-2, to determine the appropriate discount factor(s) using tables. Required: Calculate the net present value of this investment opportunity. (Round your final answer to the nearest whole dollar amount.) et s - Olue