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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 17%. After careful study,
Oakmont Company has an opportunity to manufacture and sell a new product for a four-year period. The company's discount rate is 17%. 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 two years Salvage value of the equipment in four years $190,000 $69,000 $6,000 $16,500 Annual revenues and costs Sales revenues Variable expenses Fixed out-of-pocket operating costs $340,000 $165,000 $ 79,000 When the project concludes in four years the working capi ital will be released for investment elsewhere within the company Use Excel or a financial calculator to solve Required Calculate the net present value of this investment opportunity. (Round to the nearest dollar.) Net present value
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