Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. problem 14-18 net present value analysis 2014-2 oa

PROBLEM 14-18 Net Present Value Analysis 2014-2 Oakmont Company has an opportunity to manufacture and...

50.1K

Verified Solution

Question

Accounting

image
PROBLEM 14-18 Net Present Value Analysis 2014-2 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 $5,000 Salvage value of the equipment in four years $ 12,000 Annual revenues and costs $250,000 Variable expenses $120.000 Fixed out of pocket operating costs $70,000 Sales revenues 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

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

Finance
1.2K views

Fijisawa Inc. is considering a major expansion of its product line and has estimated the following...

Psychology
1.2K views

Well, I'm Lillian, and I'm here because I was in a really significant car accident about...

Physics
1.2K views

The end A of a ladder AP of length 5 m kept inclined to a...

Basic Math
1.2K views

Consider the following differential equation dy dx Y 2 x 1 which option that correctly...

Statistics
1.2K views

A golf association requires that golf balls have a diameter that is 1 68 inches...

Calculus
1.2K views

Use Gaussian elimination to solve the given system of equations 2m 6n 6 and 8m...

Accounting
1.2K views

Sheridan Company prepared the tabulation below at December 31,2022. Net Income Adjustments...

Accounting
1.2K views

Can anyone solve this? it's urgent PAGE 34 Preparation of Income...

Accounting
1.2K views

For the following questions, you will need the Expenses by Department Excel file linked in...

Accounting
1.2K views

The tax capital account balance of a partners partnership interest is increased by

Accounting
1.2K views

A project has an initial cost of $42,350, expected net cash inflows of $8,000 per...

Accounting
1.2K views

9:10 PM 9:10 PM