Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. oakmont company has an opportunity to manufacture

Oakmont Company has an opportunity to manufacture and sell a new product for a four-year...

80.2K

Verified Solution

Question

Accounting

Oakmont Company has an opportunity to manufacture and sell a new product for a four-year period. The companys discount rate is 17%. After careful study, Oakmont estimated the following costs and revenues for the new product: Cost of equipment needed $ 275,000 Working capital needed $ 86,000 Overhaul of the equipment in two years $ 10,000 Salvage value of the equipment in four years $ 13,000 Annual revenues and costs: Sales revenues $ 420,000 Variable expenses $ 205,000 Fixed out-of-pocket operating costs $ 87,000 When the project concludes in four years the working capital will be released for investment elsewhere within the company. Click here to view Exhibit 11B-1 and Exhibit 11B-2, to determine the appropriate discount factor(s) using tables. Required: Calculate the net present value of this investment opportunity. (Use the appropriate table to determine the discount factor(s).)

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Basic Math
1.2K views

Graph the function and evaluate the following f x x 1 z 1 2x 1...

Psychology
1.2K views

Consider your own gender. What do you think it means to be that gender in our...

Electrical Engineering
1.2K views

Two parallel connected loads take a total of 2.4 kW, with a 0.8 line delay at...

Biology
1.2K views

The recorder point for amoxicillin 250mg is 4 and the maximum is 7 How many...

Basic Math
1.2K views

Let x represent the number of hours Trenton spends studying algebra, and let y represent...

Basic Math
1.2K views

Use the cosine of a sum and cosine of a difference identities to find cos...

Basic Math
1.2K views

Find the indefinite integral using the substitution x = 10 sin(?). (Use C for the...

Statistics
1.2K views

A manufacturer makes steel rods that are supposed to have a mean length of 50...

Algebra
1.2K views

1 point Solve the inequality statement 4r 5 5r 7 Or Or 12 Or 12...

Accounting
1.2K views

Additional information, which is not required for financial statements to be in accordance with U.S....

Accounting
1.2K views

What is a dependent variable? The variable in a model that affects another variable. The...

Accounting
1.2K views

Assume the partnership of V & X had a net income of $62,000 for the...