When the project concludes in four years the working

Reference no: EM13588868

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:

Working Capital Needed	$87,000
Cost of Equipment Needed	$260,000
Overhaul of the equipment in 2 years	$10,500
Salvage Value of the equipment in 4 years	$13,500
Annual Revenues and Costs:
Sales Revenue	$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: EM13588868

Questions Cloud

Your roommate is working on his bicycle and has the bike : your roommate is working on his bicycle and has the bike upside down. he spins the 64 -diameter wheel and you notice

This portion of the continuous problem continues the : this portion of the continuous problem continues the general fund and special revenue fund examples by requiring the

Alpaca corporation had revenues of 300000 in its first year : alpaca corporation had revenues of 300000 in its first year of operations. the company has not collected on 20000 of

X owned an office building that he had purchased at a cost : a the deferral of taxation on unrecognized gains from a nontaxable property transaction is1. is generally accomplished

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

Land was sold for 35000 the land was received as a property : spencer duck sssn 000-22-111 is single and his eight year old son mitch lives with him nine months of the year in a

Refer to the most recent financial statements and related : refer to the most recent financial statements and related disclosure notes of walmart stores inc. managements

It is the first year of operations at johnnys subs and the : it is the first year of operations at johnnys subs and the cost of all work in process during the year is 830000.

Calc inc owns a machine that produces baskets for the gift : calc inc. owns a machine that produces baskets for the gift packages the company sells. the company uses 900 baskets in

User Account

All Pages