When the project concludes in four years the working

Reference no: EM13588795

Oakmont Company has an opportunity to manufacture and sell a new product for a four-year period. The companys discount rate is 18%. After careful study, Oakmont estimated the following costs and revenues for the new product:

Cost of equipment needed $ 260,000

Working capital needed $ 87,000

Overhaul of the equipment in two years $ 10,500

Salvage value of the equipment in four years $ 13,500

Annual revenues and costs:

Sales revenues $ 430,000

Variable expenses $ 210,000

Fixed out-of-pocket operating costs $ 88,000

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. (Round discount factor(s) to 3 decimal places.)

Reference no: EM13588795

Questions Cloud

What is the maximum acceleration of the table without the : a shaker table is a tool used in engineering tests to find out how a device responds to vibrations. it is simply a

Aex companys copy department which does almost all of the : apex companys copy department which does almost all of the photocopying for the sales department and the administrative

Two wires a and b made of the same material and having the : two wires a and b made of the same material and having the same lengths are connected across the same voltage source.

How do the percent of revenue method and the percent of : how do the percent of revenue method and the percent of receivables method to estimate uncollectible accounts expense

When the project concludes in four years the working : oakmont company has an opportunity to manufacture and sell a new product for a four-year period. the companys discount

An object on a horizontal spring oscillates with a period : an object on a horizontal spring oscillates with a period of 1.20 s and an amplitude of 10.0 cm. at t 0 s the object

Classic wants to switch to an activity-based approach in : classic wants to switch to an activity-based approach in the upcoming year to assign prices to the gowns. production

This question deals with air track experiment and : this question deals with air track experiment and collisions of the track cars. was it necessary to have equal length

Alice gibbons owns and operates alices abstracting service : alice gibbons owns and operates alices abstracting service. alices two revenue generating operations abstracting

User Account

All Pages