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 two Salvage value of the equipment in four years Annual revenues and costs: Sales revenues Variable expenses Fixed out-of-pocket operating costs $ 270,000 $ 85,000 $ 8,000 $ 12,500 $ 410,000 $ 200,000 $ 86,000 When the project concludes in four years the working capital will be released for investment elsewhere within the company. Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using tables. (Use the tables to get your discount factors. The linked tables are the same tables as the ones in your course packet. If you calculate discount factors using Excel or a financial calculator, your answer may be different enough due to rounding that the system marks it wrong.) Required: Calculate the net present value of this investment opportunity. (Round your final answer to the nearest whole dollar amount.) EXHIBIT 12B-1 1 Present Value of $1: ((1 + r))" 0.376 0.351 0.391 0.676 Periods 4% 5% 6% 7% 8% 9% 10% 11% 12% % 13% 14% 15% 16% 17% 18% 19% 20% 21% 22% 23% 1 24% 25% 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.901 0.893 0.885 0.877 0.870 0.862 0.855 0.847 0.840 0.833 0.826 0.820 0.813 0.806 2 0.800 0.925 - 0.907 0.890 0.873 0.857 0.842 0.826 0.812 0.812 0.797 0.783 0.769 0.756 0.743 0.731 0.7180.706 0.694 0.683 0.672 0.661 0.650 3 0.640 0.889 0.864 0.840 0.816 0.794 0.772 0.751 0.731 0.712 0.693 0.675 0.658 0.641 0.624 0.609 0.593 0.579 0.564 0.551 0.537 0.524 0.512 4 4 0.855 0.823 0.792 0.763 0.735 0.708 V0+ 0.683 0.659 0.636 0.613 0.592 Vila 0.572 0552 0.534 0.516 0.499 0.482 0.467 0.451 0.437 0.423 0.410 5 0.822 0.784 0.747 0.713 0.681 0.650 0.621 0.593 0.567 0.543 0.519 0.497 0.476 4 0.456 0.437 0.419 ad 0.402 0.386 0.370 0.355 0.341 0.328 aan 6 0.790 0.746 0.705 0.6660.630 0.596 0.564 0.535 0.507 0.480 0.456 0.432 0.410 # 5 0.390 0.370 0.352 0.335 0.319 0.303 0.289 0.275 0.262 7 7 0.760 0.711 0.665 0.623 0.583 0.547 0.513 0.482 0.452 0.425 0.400 0.376 0.354 0.333 0.314 0.296 0.279 0.263 0.249 0.235 8 0.222 0.210 4 20- 0.731 0.677 0.627 0.582 0.540 0.502 0.467 0.434 0.404 0.376 0.327 0.305 0.285 0.266 0.249 0.233 0.218 0.204 2012 0.191 0.179 0.168 9 0.703 0.645 0.592 0.544 0.500 0.460 0.424 0.361 0.333 0.308 0.284 0.263 0.243 0.225 0.209 0.194 0.180 16 0.167 0.155 0.144 0.134 10 0.614 0.558 0.508 0.463 0.422 0.386 0.352 0.322 0.295 0.270 0.247 0.227 0.208 0.191 0.176 0.162 0.149 0.137 0.126 0.116 0.107 11 0.650 0.585 0.527 0.527 0.475 0.429 0.388 0.350 0.317 0.287 0.261 0.237 0.215 0.195 0.178 0.162 0.148 0.135 0.123 0.112 0.103 0.094 0.086 12 0.625 V.231 0.557 0.444 0.397 0.497 1.491 0.356 0.319 0.319 0.286 0.257 0.231 0.208 0.187 0.168 0.152 0.187 0.137 0.137 0.124 0.112 13 0.1020.092 0.124 0.601 V.112 0.102 0.083 0.076 0.069 0.530 V... 1.402 0.469 1.412 0.415 0.368 0.326 ) 0.290 0.258 0.229 W320 W. N.236 W.229 0.182 0.204 0.163 1.204 0.130 0.145 0.116 0.104 W.142 0.093 W.1234 14 0.084 0.075 1.09. 0.577 0.50S W.10 0.068 Warto 1.064 0.442 0.388 0.061 0.340 0.299 0.263 0.232 0.055 VW W. VAD Vr! 2010 Mata 0.160 0.205 0.181 Van 0.111 0.100 0.141 W.10 0.125 0.141 0,099 V.12 0.088 0.078 0.069 15 0.062 0.481 0.055 0.049 0.044 V. 0.555 VIVO 0.417 0.362 0.315 0.275 0.239 0.209 0.183 0.160 0.140 Wat VA 0.123 0.108 0.095 0.084 0.074 | 0.065 0.057 0.051 0.045 0.040 0.035 16 0.534 0.458 0.394 0.339 0.292 0.252 0.218 0.188 0.163 0.141 0.123 0.107 0.093 0.081 0.071 0.062 0.054 Way 0.047 0.042 0.036 0.032 0.028 17 0.513 0.436 0.436 0.371 0.317 0.270 0.231 0.198 0.1700.146 0.125 0.108 0.093 0.080 0.069 0.060 0.052 0.045 0.039 0.034 0.030 0.026 0.023 18 0.494 0.416 0.350 0.296 0.250 0.212 0.180 0.153 0.130 0.111 0.095 0.081 0.069 0.059 0.051 0.044 0.038 0.032 0.028 0.024 0.021 0.018 19 0.475 0.396 0.331 0.277 0.232 0.194 0.164 0.138 0.116 0.098 0.083 0.070 0.060) 0.051 0.043 0.037 0.031 0.027 0.023 0.020 0.017 0.014 20 0.456 0.377 0.312 0.258 0.215 0.178 0.149 0.124 0.104 0.087 0.073 0.061 0.051 | 0.043 0.037 0.031 0.026 0.022 0.019 0.016 0.014 0.012 21 0.439 0.359 0.294 0.242 0.199 0.164 0.135 0.112 0.093 0.077 0.064 0.053 0.044 0.037 0.031 0.026 0.022 0.018 0.015 0.013 0.011 0.009 22 0.422 0.342 0.278 0.226 0.184 0.150 0.123 0.101 0.083 0.068 0.056 0.046 0.038 0.026 0.022 0.018 0.015 0.013 0.011 0.009 0.007 23 0.406 0.326 0.262 0.211 0.170 0.138 0.112 0.091 0.074 0.060 0.049 0.040 0.033 0.027 0.022 0.018 0.015 0.012 0.010 0.009 0.007 0.006 24 0.390 0.310 0.247 0.197 0.158 0.126 0.102 0.082 0.066 0.053 0.043 0.035 0.028 0.023 0.019 0.015 0.013 0.010 0.008 0.007 0.006 0.005 25 0.375 0.295 0.233 0.184 0.146 0.116 0.092 0.074 0.059 0.047 0,038 0.030 0.024 0.020 0.016 0.013 0.010 0.009 0.007 0.006 0.005 0.004 26 0.361 0.281 0.220 0.172 0.172 0.135 0.106 106 0.084 0.066 0.053 0.042 0.033 0.026 0.021 0.017 0.014 014 | 0.011 0.009 0.007 0.006 0.005 0.004 0.003 27 0.347 0.268 0.207 0.161 0.125 0.098 0.076 0.060 0.047 0.037 0.029 0.023 0.018 0.014 0.011 0.009 0.007 0.006 0.005 0.004 0.03 0.002 28 0.333 0.255 0.196 0.150 0.116 0.090 0.069 0.054 0.042 0.033 0.026 0.020 0.016 0.012 0.010 0.008 0.006 0.005 0.004 29 0.003 0.002 0.002 0.321 0.243 0.141 0.082 0.063 0.048 0.037 0.029 0.022 0.014 0.011 0.008 0.006 0.005 0.004 0.003 0.002 0.002 0.002 30 0.308 0.231 0.174 0.131 0.099 0.075 0.075 0.057 0.044 0.033 0.026 0.020 0.015 0.012 0.009 0.007 0.005 0.004 0.003 0.003 0.002 0.002 0.001 40 0.208 0.142 0.097 0.067 0.046 0.032 0.022 0.015 0.011 0.008 0.005 0.004 0.003 0.002 0.001 0.001 0.001 0.000 0.000 0.000 0.000 0.000 0.032 0.185 0.107 0.017 EXHIBIT 12B-2 Present Value of an Annuity of $1 in Arrears; 1/r(1-(1/(1+r)^n)) 10% 0.840 0.833 1.647 1.626 1.547 1.528 Periods 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 2 24 24 25 26 27 28 29 30 40 4% 5% 6% 7% 8% 9% 11% 12% 13% 14% 15% 16% 17% 18% 19% 20% 21% 22% 23% 24% 0.962 0.952 0.943 0.935 25% 0.926 0.917 0.909 0.901 0.893 0.885 0.877 0.870 0.862 0.855 0.847 0.847 0.826 0.820 0.813 0.806 0.800 1.886 1.859 1.033 1.833 1.808 1.783 1.759 1.736 1.713 1.690 1.668 1.605 1.585 1.566 11003 1.509 2.775 1.09 2.723 2.673 1.457 | 1.440 1.492 1.474 2.624 3:12 2.577 2.531 2.21 2.487 12+ 1.490 2.40 Suster 2.444 | 2.402 2.283 2:1744 2.322 2.361 RI 2.20. 2.246 2.210 2.174 2.140 2.106 2.042 2.074 2.011 3.630 3.546 SU 1.981 3.465 2.772 3.387 1.952 3.312 SA 2.034 w 3.240 wit 3.30 1270 3.170 232 3.102 212 Witry 2.914 3.037 2.974 Site 2.743 2.855 2.798 2017 2.743 2170 2.690 2.639 1024 2.589 2:27 2.494 2.540 4.329 2.404 4.452 2.448 2.DOS 4.100 2.362 SITY 4.212 3.993 172 wito 3.890 Todo 3.791 22 Sito SA 3.696 3.605 warz w 3.517 3.352 3.433 3.274 3.199 3.127 3.058 wie 2.991 2.926 5.242 2.864 | 2.803 5.076 2.745 4.917 le? 4.767 41220 4.623 2.689 4.486 wany 4.355 4.193 100 4.231 1.10 4.111 ave 3.998 3.889 TON 00 3.784 w.007 3.685 3.589 3.498 3.410 3.326 3.245 10 3.167 3.092 6.002 3.020 5.786 2.951 5.582 wita 5.389 www 5.206 sir 5.033 4.868 ware 4.712 10 4.564 4.423 4.288 4.160 4.039 3.922 3.812 3.706 3.605 3.508 3.416 3.327 3.242 | 3.161 od 6.733 6.463 6.210 5.971 5.747 5.535 5.335 5.146 Ver 4.968 16 ny 4.799 4.639 4.487 4.344 110 idee con 4.207 4.078 am 3.954 3.837 3.726 3.619 0! 3.518 3.421 3.329 7.435 World 7.108 6.802 6.515 6.247 5.995 5.759 5537 5.328 5.132 www 4.946 4.7724.607 29 4.163 4.451 4.303 4.031 3.905 are 3.786 3.673 3.566 3.463 8.111 7.722 7.360 7.024 6.710 6.418 6.145 5.889 re 5.650 5.216 ay 5.426 ta 5.019 4.833 4.659 4.494 si 4.339 4.1924.054 3.923 3.799 3.682 3.571 8.760 8.306 7.887 7.499 7.139 6.805 6.495 6.207 5.938 we 5.687 5.453 5.234 5.029 . 4.836 4.656 4.486 4.327 4.177 4,035 3.902 3.776 9.385 3,656 8.863 8.384 Tiere 7.943 7.536 7.161 6.814 6.492 Tam 6.194 5.918 5.660 ce 5.421 5.197 4.988 4.793 4.611 4.439 4.278 4.127 3.985 3.851 3.725 9.986 9.394 8.853 8.358 7.904 7.487 7.103 6.750 6.424 6.122 5.842 5.583 5.342 5.118 4.910 4.715 4.533 4.362 4.203 4.053 3.912 3.780 10.563 9.899 9.295 8.745 8.244 7.786 7.367 6.982 6.628 To 6.302 6.002 5.724 5.468 5.229 ce 5.008 4.802 4.611 4.432 acor 4.265 4.108 3.962 11.118 10.380 9.712 3.824 9.108 8.559 8.061 7.606 7.191 6.811 6.462 6.142 140020 5.847 5.575 5.324 5.092 au 4.876 4.675 4.489 oc 4.315 4.153 4.001 09 11.652 10.838 10.106 9.447 3.859 8.851 8.313 7.824 7.824 7.379 6.974 6.604 6.26 5.954 5.668 5.405 5.162 4.938 4.730 4.730 4.536 4.357 4.189 4.033 000 4.033 3.887 7540 12.166 11.274 10.4779.763 9.122 8.544 8.022 7.549 7.120 12 6.729 6.373 6.047 5.749 5.475 5.222 201 4.990 4 4.775 4.391 4.219 4.576 2012 4.059 3.910 12.659 11.690 10.828 10.059 9.372 8001 8.756 8.201 7.702 7.250 6.840 6.467 6.128 5.818 5.534 5.273 5 5022 5.033 va 4.812 4.608 4242 4.419 4.243 09 4.080 2009 205 3.928 13.134 12.085 11.158 10.336 9.604 8.950 8.365 8 265 7020 7.839 7.366 6039 6.938 6.550 6.198 5.877 5.584 5.316 5.070 4.843 A 4.635 4262 4.4424.263 4.097 2007 3042 0 120 3.942 13.590) 12.462 11.470 10.594 9.818 9.129 8.514 7.963 7.469 7.025 6623 6.623 6.259 5.929 5.628 5.353 5.101 4870 4.657 4.870 A770 4.460 4.279 4.110 3.954 14.029 12.821 11.764 10.836 10.017 9.292 8.649 8.075 7.562 7.102 6687 0.087 6.312 5.973 5.665 5.384 5.127 d 801 4.675 4.476 4.292 4.121 3.963 14.451 13.163 12.042 11.061 10.201 9.442 8.772 8.176 7.645 7.170 6.743 1.170 6.359 0.743 6.011 S 5.696 5.410 5.149 4.909 4.690 4.488 4.302 4.130 3.970 14.857 13.489 12.303 11.272 10.371 9.580 9.80 8.883 8.266 7.718 7.230 6.792 6.399 6.044 0.044 5.723 5.432 4 5.167 4.925 4.703 4.499 4.311 4.137 3.976 15.247 13.799 12.550 11.469 10.529 9.707 8.985 8.348 0.703 7.784 2.210 6.833 7.283 6.434 0.033 6.073 5.746 5.451 Wewe 5.182 0.073 4.937 4.713 4.507 4.318 4.207 15.622 14.094 12.783 11.654 10.675 9.823 4.143 3.981 9,077 8.422 13.022 14.024 12.10 11.00 3.901 10.072 2017 0.444 7.843 | 7.330 1.043 1.330 6.873 0404 6.464 6,097 0.074 5.1954.9484.721 J.192 4.514 4.323 4.147 15.983 14.375 13.003 11.826 10.810 9.929 *2014 3.985 9.161 +323 8.488 7.896 7.372 6.906 6.491 5.783 5.480 5.206 4.956 4.728 4.520 4.328 4.151 3.988 16.330 14.643 13.211 11.987 10.935 10.027 9.237 8.548 7.943 7.409 6.935 6.514 6.136 5.798 5.492 5.215 4.964 4.734 4.524 4.332 4.332 4.154 4.154 | 3.990 16.663 14.898 13.406 12.137 11.051 10.116 9.307 8.602 7.984 7.441 6.961 6.534 6.152 5.810 5.502 5.223 4.970 4.739 4.528 4.335 4.157 16.984 15.141 13.591 12.278 11.158 10.198 9.370 8.650 8.022 7.470 6.983 6.551 6.166 5.820 5.510 5.229 4.975 4.743 4.531 4.337 4.159 3.994 17.292 15.372 13.765 12.409 11.258 10.274 9.427 8.694 8.055 7.496 7.003 6.566 6.177 5.829 5.517 5.235 4.979 4.746 4.160 3.995 19.793 17.159 15.046 13.332 11.925 10.757 9.779 8.951 8.244 7.634 7.105 6.642 6.233 5.871 5.548 5.258 4.997 4.760 4.544 4.347 4.166 3.999 - 5.766 5.467 6.118 3.992 4.534 4.339