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Saved 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
Saved 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 costel Sales revenues Variable expenses Fixed out-of-pocket operating costs $160,000 $66.000 $ 11.000 $ 15.000 $ 310,000 $ 150,000 76.000 When the project concludes in four years the working capital will be released for investment elsewhere within the company. Click here to view Exhibit 7B-1 and Exhibit 7B-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)
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