Oakmont Company has an opportunity to manufacture and sell a new product for a four-year period. After careful study, Oakmont estimated the following costs and revenues for the new product: Cost of equipment needed $130,000 Working capital needed.... Overhaul of the equipment in two years $60,000 $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. Required: Using Excel (this will save you time and effort) answer the following: (a) Oakmont's cost of capital is 15%, and management does not feel it should have any adjustment for risk, compute the NPV. NPV- $16,415.79 (b) Same situation as (a), but management does feel this project does possess a greater than average risk, so 19% should be the required rate of return. Compute the NPV. NPV- $1,430.04 (c) Management thinks that, while all of the assumptions about cash flows are the same, but rather than a four-year life, the product will have a six-year life (the salvage of the equipment will also remain the same at end of 6 years as what was estimated for 4 years). Using a 19% required rate of return, compute the NPV. (d) Management thinks that if they can spend another $10,000 on advertising each of the next 4 years (at the end of the year), it will cause sales volume to increase by 10% for each of the next 4 years (the 10% will increase for each year over year, starting with the first year). (Assume all cast flows occur at the end of the year) Compute NPV using a 19% cost of capital