Problem $14-18($Static$)$ Net Present Value Analysis $[$LO$14-2]$

Oakmont Company has an opportunity to manufacture and sell a new product for a four$-$year period. The company$$s discount rate is $15\%$ and it estimated the following costs and revenues for the new product:

Cost of equipment needed $ $130,000$

Working capital needed $ $60,000$

Overhaul of the equipment in two years $ $8,000$

Salvage value of the equipment in four years $ $12,000$

Annual revenues and costs:

Sales revenues $ $250,000$

Variable expenses $ $120,000$

Fixed out$-$of$-$pocket operating costs $ $70,000$

When the project concludes in four years, the working capital will be released for investment elsewhere within the company.

Click here to view Exhibit $14$B$-1$ and Exhibit $14$B$-2,$ to determine the appropriate discount factor$($s$)$ using tables.

Required:

Calculate the net present value of this investment opportunity.