User Account

All Pages

Calculate the net present value of investment opportunity

Assignment Help Managerial Accounting
Reference no: EM132511000

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 $265,000

Working capital needed $88,000

Overhaul of the equipment in two years $8,000

Salvage value of the equipment in four years $14,000

Annual revenues and costs:

Sales revenues $440,000

Variable expenses $215,000

Fixed out-of-pocket operating costs $89,000

When the project concludes in four years the working capital will be released for investment elsewhere within the company. Use Excel or a financial calculator to solve.

Required:

Question 1: Calculate the net present value of this investment opportunity. (Round to the nearest dollar.)

Reference no: EM132511000

Questions Cloud

Make schedule for each month showing budget cash receipts : Make a schedule for each month showing budgeted cash receipts for Cloaks Company. Make a schedule for each month showing budgeted cash disbursements
Discuss concepts and principals of systems analysis : Describe and discuss concepts and principals of systems analysis and design and Use specifications such as user interfaces, databases, and systems interfaces
Research and organize information about stem cells : What is the research and organize information about Stem Cells? What is its Description, Types and Properties, Medical
Importance of phenotypic variation in louse body : a) Describe the importance of phenotypic variation in louse body color among individuals in a population of lice.
Calculate the net present value of investment opportunity : Calculate the net present value of this investment opportunity. (Round to the nearest dollar.) Oakmont Company has an opportunity to manufacture.
Comparison of daphnia that developed in the absence : Daphnia longicephala is a freshwater crustacean that can detect chemical cues produced by the predator Notonecta glauca. Researchers raised Daphnia
Response to discussion : You stated, "Therefore, the obscenity of the act does not lie so much in its nature as in its eventual transcendence to third parties,
Skin cancer resulting from xeroderma pigmentosum : Marshal and Angela have skin cancer resulting from xeroderma pigmentosum (XP). They meet at an event for teenagers with cancer.
What is home center inventoriable cost per unit : What is Home Center's inventoriable cost per unit using absorption costing? What is Home Center's inventory cost per faucet using variable costing?

Reviews

Write a Review

Managerial Accounting Questions & Answers

  How should lauden deal with this situation

Assuming that Orvieto Industries causes a disproportionate amount of indirect service costs, how should Lauden deal with this situation?

  Evaluate and use quantitative and qualitative information

Evaluate and use quantitative and qualitative information to measure financial and non financial performance of an organisation

  What impact would accepting on operating profit

What impact would accepting this special order have on operating profit? (Select option "higher" or "lower", keeping Status Quo as the base.)

  Compute the equity balance in your account for each month

Assume the price of each stock is as follows for the next three months (month-end).

  Explain the difference between interval and ratio data

List at least 3 qualitative attributes of the snack food about which they might want to ask consumers. Make sure at least one of them is nominal.

  Schedule of cash collections on accounts receivable

A. a schedule of cash collections on accounts receivable for March. B. a schedule of cash disbursements on accounts payable for March.

  Prepare Company financial statements

Prepare Company financial statements

  Castles in the sand generates a rate of return

What happens to the P/E ratio if the plow back ratio is reduced to .20? Show that if plow back equals zero, the earnings-price ratio, E/P, falls to the expected rate of return on the stock.

  Draw up an income statement for crane company

Draw up an income statement for Crane Company for the year ended December 31, 2021.The items and amounts below were taken from Cravex Company's 2021

  What is the new price per flying hour

This will be accomplished by revising the price paid per flying hour based on the revised estimates of flying hours. What is the new price per flying hour?

  Find activity variance for personnel expenses in november

The activity variance for personnel expenses in November would be closest to. Tennies Clinic uses client-visits as its measure of activity.

  Frontera company output for the current period results

Frontera Company's output for the current period results in a $ 20,000 unfavorable direct labor rate variance and a $10,000 unfavorable direct labor efficiency variance.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd