Oakmont Company has an opportunity to manufacture and sell a new product for a four-year period....

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Oakmont Company has an opportunity to manufacture and sell a new product for a four-year period. The company's discount rate 16% and it estimated the following costs and revenues for the new product Cost of equipment needed Working capital needed Overhaul of the equipment in two years Salvage value of the equipment in four years Annual revenues and costs: Sales revenues Variable expenses Fixed out-of-pocket operating costs $ 250,000 $ 82,000 $ 8,000 $ 11,000 $ 380,000 $ 185,000 $ 83,000 When the project concludes in four years, the working capital will be released for investment elsewhere within the company. Click here to view Exhibit 148-1 and Exhibit 14B-2. to determine the appropriate discount factor(s) using tables. Required: Calculate the net present value of this investment opportunity. Note: Round your final answer to the nearest whole dollar amount. Net present value Oakmont Company has an opportunity to manufacture and sell a new product for a four-year period. The company's discount rate 16% and it estimated the following costs and revenues for the new product Cost of equipment needed Working capital needed Overhaul of the equipment in two years Salvage value of the equipment in four years Annual revenues and costs: Sales revenues Variable expenses Fixed out-of-pocket operating costs $ 250,000 $ 82,000 $ 8,000 $ 11,000 $ 380,000 $ 185,000 $ 83,000 When the project concludes in four years, the working capital will be released for investment elsewhere within the company. Click here to view Exhibit 148-1 and Exhibit 14B-2. to determine the appropriate discount factor(s) using tables. Required: Calculate the net present value of this investment opportunity. Note: Round your final answer to the nearest whole dollar amount. Net present value

Answer rating: 100% (QA)

To calculate the net present value NPV of the investment opportunity we need to discount the cash flows associated with the project to their present v... View the full answer