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: $ 260,000 $ 87,000 $ 10,500 $ 13,500 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 out-of-pocket operating costs $ 430,000 $ 210,000 $ 88,000 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.) Net present value EXHIBIT 14B-1 Present Value of $1; 1 (1+r) n Periods 1 2 3 hilo 9% 0.917 0.842 0.772 0.708 0.650 0.596 0.547 0.502 0.460 ohhh 4 5 6 7 8 9 10 le 4% 0.962 0.925 0.889 0.855 0.822 0.790 0.760 0.731 0.703 0.676 0.650 0.625 0.601 0.577 0.555 0.534 0.513 0.494 0.475 0.456 0.439 0.422 0.406 0.390 0.375 0.361 0.347 0.333 0.321 0.308 0.208 5% 0.952 0.907 0.864 0.823 0.784 0.746 0.711 0.677 0.645 0.614 0.585 0.557 0.530 0.505 0.481 0.458 0.436 0.416 0.396 0.377 0.359 0.342 0.326 0.310 0.295 0.281 0.268 0.255 0.243 0.231 0.142 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 40 6% 0.943 0.890 0.840 0.792 0.747 0.705 0.665 0.627 0.592 0.558 0.527 0.497 0.469 0.442 0.417 0.394 0.371 0.350 0.331 0.312 0.294 0.278 0.262 0.247 0.233 0.220 0.207 0.196 0.185 0.174 0.097 7% 8% 0.935 0.926 0.873 0.857 0.816 0.794 0.763 0.735 0.713 0.681 0.666 0.630 0.623 0.583 0.582 0.540 0.544 0.500 0.508 0.463 0.475 0.429 0.444 0.397 0.415 0.368 0.388 0.340 0.362 0.315 0.339 0.292 0.317 0.270 0.296 0.250 0.277 0.232 0.258 0.215 0.242 0.199 0.226 0.184 0.211 0.170 0.197 0.158 0.184 0.146 0.172 0.135 0.161 0.125 0.150 0.116 0.141 0.107 0.131 0.099 0.067 0.046 10% 11% 0.909 0.901 0.826 0.812 0.751 0.731 0.683 0.659 0.621 0.593 0.564 0.535 0.513 0.482 0.467 0.434 0.424 0.391 0.386 0.352 0.350 0.317 0.319 0.286 0.290 0.258 0.263 0.232 0.239 0.209 0.218 0.188 0.198 0.170 0.180 0.153 0.164 0.138 0.149 0.124 0.135 0.112 0.123 0.101 0.112 0.091 0.102 0.082 0.092 0.074 0.084 0.066 0.076 0.060 0.069 0.054 0.063 0.048 0.057 0.044 0.022 0.015 0.422 0.388 0.356 0.326 0.299 0.275 0.252 0.231 0.212 0.194 0.178 0.164 0.150 0.138 0.126 0.116 0.106 0.098 0.090 0.082 0.075 0.032 12% 0.893 0.797 0.712 0.636 0.567 0.507 0.452 0.404 0.361 0.322 0.287 0.257 0.229 0.205 0.183 0.163 0.146 0.130 0.116 0.104 0.093 0.083 0.074 0.066 0.059 0.053 0.047 0.042 0.037 0.033 0.011 13% 14% 0.885 0.877 0.783 0.769 0.693 0.675 0.613 0.592 0.543 0.519 0.480 0.456 0.425 0.400 0.376 0.351 0.333 0.308 0.295 0.270 0.261 0.237 0.231 0.208 0.204 0.182 0.181 0.160 0.160 0.140 0.141 0.123 0.125 0.108 0.111 0.095 0.098 0.083 0.087 0.073 0.077 0.064 0.068 0.056 0.060 0.049 0.053 0.043 0.047 0.038 0.042 0.033 0.037 0.029 0.033 0.026 0.029 0.022 0.026 0.020 0.008 0.005 15% 0.870 0.756 0.658 0.572 0.497 0.432 0.376 0.327 0.284 0.247 0.215 0.187 0.163 0.141 0.123 0.107 0.093 0.081 0.070 0.061 0.053 0.046 0.040 0.035 0.030 0.026 0.023 0.020 0.017 0.015 0.004 16% 17% 0.862 0.855 0.743 0.731 0.641 0.624 0.552 0.534 0.476 0.456 0.410 0.390 0.354 0.333 0.305 0.285 0.263 0.243 0.227 0.208 0.195 0.178 0.168 0.152 0.145 0.130 0.125 0.111 0.108 0.095 0.093 0.081 0.080 0.069 0.069 0.059 0.060 0.051 0.051 0.043 0.044 0.037 0.038 0.032 0.033 0.027 0.028 0.023 0.024 0.020 0.021 0.017 0.018 0.014 0.016 | 0.012 0.014 0.011 0.012 0.009 0.003 0.002 18% 0.847 0.718 0.609 0.516 0.437 0.370 0.314 0.266 0.225 0.191 0.162 0.137 0.116 0.099 0.084 0.071 0.060 0.051 0.043 0.037 0.031 0.026 0.022 0.019 0.016 0.014 0.011 0.010 0.008 0.007 0.001 19% 0.840 0.706 0.593 0.499 0.419 0.352 0.296 0.249 0.209 0.176 0.148 0.124 0.104 0.088 0.074 0.062 0.052 0.044 0.037 0.031 0.026 0.022 0.018 0.015 0.013 0.011 0.009 0.008 0.006 0.005 0.001 20% 0.833 0.694 0.579 0.482 0.402 0.335 0.279 0.233 0.194 0.162 0.135 0.112 0.093 0.078 0.065 0.054 0.045 0.038 0.031 0.026 0.022 0.018 0.015 0.013 0.010 0.009 0.007 0.006 0.005 0.004 0.001 21% 0.826 0.683 0.564 0.467 0.386 0.319 0.263 0.218 0.180 0.149 0.123 0.102 0.084 0.069 0.057 0.047 0.039 0.032 0.027 0.022 0.018 0.015 0.012 0.010 0.009 0.007 0.006 0.005 0.004 0.003 0.000 22% 23% 0.820 0.813 0.672 0.661 0.551 0.537 0.451 0.437 0.370 0.355 0.303 0.289 0.249 0.235 0.204 0.191 0.167 0.155 0.137 0.126 0.112 0.103 0.092 0.083 0.075 0.068 0.062 0.055 0.051 0.045 0.042 0.036 0.034 0.030 0.028 0.024 0.023 0.020 0.019 0.016 0.015 0.013 0.013 0.011 0.010 0.009 0.008 0.007 0.007 0.006 0.006 0.005 0.005 0.004 0.004 | 0.003 0.003 0.002 0.003 0.002 0.000 0.000 24% 0.806 0.650 0.524 0.423 0.341 0.275 0.222 0.179 0.144 0.116 0.094 0.076 0.061 0.049 0.040 0.032 0.026 0.021 0.017 0.014 0.011 0.009 0.007 0.006 0.005 0.004 0.003 0.002 0.002 0.002 0.000 Id 25% 0.800 0.640 0.512 0.410 0.328 0.262 0.210 0.168 0.134 0.107 0.086 0.069 0.055 0.044 0.035 0.028 0.023 0.018 0.014 0.012 0.009 0.007 0.006 0.005 0.004 0.003 0.002 0.002 0.002 0.001 0.000 - EXHIBIT 14B-2 Present Value of an Annuity of $1 in Arrears; 1 r [1-1(1+r)n] Periods 1 2 3 4 5 6 7 8 9 TOT 4% 5% 6% 7% 8% 9% 10% 11% 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.901 1.886 1.859 1.833 1.808 1.783 1.759 1.736 1.713 2.775 2.723 2.673 2.624 2.577 2.531 2.487 2.444 3.630 3.546 3.465 3.387 3.312 3.240 3.170 3.102 4.452 4.329 4.212 4.100 3.993 3.890 3.791 3.696 5.242 5.076 4.917 4.767 4.623 4.486 4.355 4.231 6.002 5.786 5.582 5.389 5.206 5.033 4.868 4.712 6.733 6.463 6.210 5.971 5.747 5.535 5.335 5.146 7.435 7.108 6.802 6.515 6.247 5.995 5.759 5.537 8.111 7.722 7.360 7.024 6.710 6.418 6.145 5.889 8.760 8.306 7.887 7.499 7.139 6.805 6.495 6.207 9.385 8.863 8.384 7.943 7.536 7.161 6.814 6.492 9.986 9.394 8.853 8.358 7.904 7.487 7.103 6.750 10.563 9.899 9.295 8.745 8.244 7.786 7.367 6.982 11.118 10.380 9.712 9.108 8.559 8.061 7.606 7.191 11.652 10.838 10.106 9.447 8.851 8.313 7.824 7.379 12.166 | 11.274 10.477 | 9.763 9.122 8.544 8.022 7.549 12.659 11.690 | 10.828 | 10.059 9.372 8.756 8.201 7.702 13.134 | 12.085 | 11.158 10.336 9.604 8.950 8.365 7.839 13.590 12.462 | 11.470 10.594 9.818 9.129 8.514 7.963 14.029 12.821 11.764 10.836 10.017] 9.292 8.649 8.075 14.451 | 13.163 | 12.042 11.061 10.201 9.442 8.772 8.176 14.857 | 13.489 | 12.303 | 11.272 10.371 9.580 8.883 8.266 15.247 | 13.799 | 12.550 | 11.469 | 10.529 9.707 8.985 8.348 15.622 14.094 | 12.783 | 11.654 10.675 9.823 9.077 8.422 15.983 14.375 13.003 | 11.826 10.810 9.929 9.161 8.488 16.330 | 14.643 13.211 | 11.987 10.935 10.027 9.237 16.663 14.898 | 13.406 12.137 | 11.051 | 10.116 | 9.307 8.602 16.984 15.141 | 13.591 | 12.278 11.158 | 10.198 9.370 8.650 17.292 | 15.372 13.765 12.409 | 11.258 10.274 9.427 8.694 19.793 17.159 | 15.046 | 13.332 | 11.925 10.757 9.779 8.951 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 40 12% 0.893 1.690 2.402 3.037 3.605 4.111 4.564 4.968 5.328 5.650 5.938 6.194 6.424 6.628 6.811 6.974 7.120 7.250 7.366 7.469 7.562 7.645 7.718 7.784 7.843 7.896 7.943 7.984 8.022 8.055 8.244 13% 0.885 1.668 2.361 2.974 3.517 3.998 4.423 4.799 5.132 5.426 5.687 5.918 6.122 6.302 6.462 6.604 6.729 6.840 6.938 7.025 7.102 7.170 7.230 7.283 7.330 7.372 7.409 7.441 7.470 7.496 7.634 14% 0.877 1.647 2.322 2.914 3.433 3.889 4.288 4.639 4.946 5.216 5.453 5.660 5.842 6.002 6.142 6.265 6.373 6.467 6.550 6.623 6.687 6.743 6.792 6.835 6.873 6.906 6.935 6.961 6.983 7.003 7.105 15% 0.870 1.626 2.283 2.855 3.352 3.784 4.160 4.487 4.772 5.019 5.234 5.421 5.583 5.724 5.847 5.954 6.047 6.128 6.198 6.259 6.312 6.359 6.399 6.434 6.464 6.491 6.514 6.534 6.551 6.566 6.642 16% 0.862 1.605 2.246 2.798 3.274 3.685 4.039 4.344 4.607 4.833 5.029 5.197 5.342 5.468 5.575 5.668 5.749 5.818 5.877 5.929 5.973 6.011 6.044 6.073 6.097 6.118 6.136 6.152 6.166 6.177 6.233 17% 18% 0.855 0.847 1.585 1.566 2.210 2.174 2.743 2.690 3.199 3.127 3.589 3.498 3.922 3.812 4.207 4.078 4.451 4.303 4.659 4.494 4.836 4.656 4.988 4.793 5.118 4.910 5.229 5.008 5.324 5.092 5.405 5.162 5.475 5.534 5.273 5.584 5.316 5.628 5.353 5.665 5.384 5.696 5.410 5.723 5.432 5.746 5.451 5.766 5.467 5.783 5.480 5.798 5.492 5.810 5.502 5.820 5.510 5.829 5.517 5.871 5.548 19% 20% 21% 0.840 0.833 0.826 1.547 1.528 1.509 2.140 2.106 2.074 2.639 2.589 2.540 3.058 2.991 2.926 3.410 3.326 3.245 3.706 3.605 3.508 3.954 3.837 3.726 4.163 4.031 3.905 4.339 4.192 4.054 4.486 4.327 4.177 4.611 4.439 4.278 4.715 4.533 4.362 4.802 4.611 4.432 4.876 4.675 4.489 4.938 4.730 4.536 4.990 4.775 4.576 5.033 4.812 4.608 5.070 4.843 4.635 5.101 4.870 4.657 5.127 4.891 4.675 5.149 4.909 4.690 5.167 4.925 4.703 5.182 4.937 4.713 5.1954.948 4.721 5.206 4.956 4.728 5.215 4.964 4.734 5.223 4.970 4.739 5.229 4.975 4.743 5.235 4.979 4.746 5.258 4.997 4.760 22% 0.820 1.492 2.042 2.494 2.864 3.167 3.416 3.619 3.786 3.923 4.035 4.127 4.203 4.265 4.315 4.357 4.391 4.419 4.442 4.460 4.476 4.488 4.499 4.507 4.514 4.520 4.524 4.528 4.531 4.534 4.544 23% 24% 25% 0.813 0.806 0.800 1.474 1.457 1.440 2.011 1.981 1.952 2.448 2.404 2.362 2.803 2.745 2.689 3.092 3.020 2.951 3.327 3.242 3.161 3.518 3.421 3.329 3.673 3.566 3.463 3.799 3.682 3.571 3.902 3.776 3.656 3.985 3.851 3.725 4.053 3.912 3.780 4.108 3.962 3.824 4.153 4.001 3.859 4.189 4.033 3.887 4.219 4.059 3.910 4.243 4.080 3.928 4.263 4.097 3.942 4.279 4.110 3.954 4.292 4.121 3.963 4.302 4.130 3.970 4.311 4.137 3.976 4.318 4.143 3.981 4.323 4.147 3.985 4.328 4.151 3.988 4.332 4.154 3.990 4.335 4.157 3.992 4.337 4.159 3.994 4.339 4.160 3.995 4.347 4.166 3.999 5.222 - 8.548 1 WTTTT