Question: Problem 13-18 Net Present Value Analysis [LO13-2] Oakmont Company has an opportunity to manufacture and sell a new product for a four-year period. The company's
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Problem 13-18 Net Present Value Analysis [LO13-2] Oakmont Company has an opportunity to manufacture and sell a new product for a four-year period. The company's discount rate is 18%. After careful study, Oakmont estimated the following costs and revenues for the new product Cost of equipment needed Working capital needed Overhaul of the equipment in year $265, 000 $ 88,000 $8,000 $ 14,000 salvage value of the equipment in four years Annual revenues and costss Sales revenues $440,000 $215, 000 Fixed out-of-pocket operating 89,000 When the project concludes in four years the working capitall Wl be released for investment elsewhere within the company. Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factoris) using tables Required: Calculate the net present value of this investment opportunity. Net present
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