Business, 28.04.2021 20:20 asmita9876

Oakmont Company has an opportunity to manufacture and sell a new product for a four-year period. The company’s discount rate is 13%. After careful study, Oakmont estimated the following costs and revenues for the new product: Cost of equipment needed$135,000
Working capital needed$61,000
Overhaul of the equipment in year two$7,000
Salvage value of the equipment in four years$11,000

Annual revenues and costs:
Sales revenues$260,000
Variable expenses$125,000
Fixed out-of-pocket operating costs$71,000

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

Click here to view Exhibit 14B-1 and Exhibit 14B-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.)

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

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