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  3. inculcu tu pun ct for a four-year d the following

inculcu tu pun ct for a four-year d the following PROBLEM 13-18 Net Present Value...

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inculcu tu pun ct for a four-year d the following PROBLEM 13-18 Net Present Value Analysis LO13-2 Oakmont Company has an opportunity to manufacture and sell a new product for a fom period. The company's discount rate is 15%. After careful study, Oakmont estimated the follo costs and revenues for the new product: $130,000 $60,000 $8,000 $12,000 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 ......... $250,000 $120,000 $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

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