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Oakmont Company has an opportunity to manufacture and sell a new product for a four - year period. The company s discount rate is 1
Oakmont Company has an opportunity to manufacture and sell a new product for a fouryear period. The companys discount rate is and it estimated the following costs and revenues for the new product:
Cost of equipment needed $
Working capital needed $
Overhaul of the equipment in two years $
Salvage value of the equipment in four years $
Annual revenues and costs:
Sales revenues $
Variable expenses $
Fixed outofpocket operating costs $
When the project concludes in four years, the working capital will be released for investment elsewhere within the company.
Click here to view Exhibit B and Exhibit B to determine the appropriate discount factors using tables.Oakmont Company has an opportunity to manufacture and sell a new product for a fouryear period. The company's discount rate is
and it estimated the following costs and revenues for the new product:
When the project concludes in four years, the working capital will be released for investment elsewhere within the company.
Click here to view Exhibit B and Exhibit B to determine the appropriate discount factors using tables.
Required:
Calculate the net present value of this investment opportunity.
Note: Round your final answer to the nearest whole dollar amount.
Net present value
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