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please help PROBLEM 14-18 Net Present Value Analysis LO14-2 Oakmont Company has an opportunity to manufacture and sell a new product for a four-year period.
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PROBLEM 14-18 Net Present Value Analysis LO14-2 Oakmont Company has an opportunity to manufacture and sell a new product for a four-year period. The company's discount rate is 15% After careful study, Oakmont estimated the following costs and revenues for the new product Cost of equipment needed $130,000 Working capital needed $60,000 Overhaul of the equipment in two years $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: Calculate the net present value of this investment opportunity Step by Step Solution
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