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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	$	190,000
Working capital needed	$	69,000
Overhaul of the equipment in year two	$	6,000
Salvage value of the equipment in four years	$	16,500
Annual revenues and costs:
Sales revenues	$	340,000
Variable expenses	$	165,000
Fixed out-of-pocket operating costs	$	79,000

Problem 13-18 Net Present Value Analysis (L013-2 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 year two 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 capital will be released for investment elsewhere within the company. Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor(s) using tables Required Calculate the net present value of this investment opportunity. Net present value

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