kau.3answer must be in table format or i will give down vote Oakmont Company has an opportunity to manufacture and sell a new product for a four-year period. The company’s discount rate is 16%. After careful study, Oakmont estimated the following costs and revenues for the new product: Cost of equipment needed $170,000 Working capital needed $68,000 Overhaul of the equipment in two years $12,000 Salvage value of the equipment in four years $16,000 Annual revenues and costs: Sales revenues $330,000 Variable expenses $160,000 Fixed out-of-pocket operating costs $78,000 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. (Round discount factor(s) to 3 decimal places.)Net Present value:

The problem involves the determination of the NPV or Net Present Value. Net Present Value is a…

Answered: kau.3 answer must be in table format or…

Excel Applications for Accounting Principles

4th Edition

ISBN:9781111581565

Author:Gaylord N. Smith

Publisher:Gaylord N. Smith

Chapter26: Capital Budgeting (capbud)

Section: Chapter Questions

Problem 5R

See similar textbooks

Related questions

Question

kau.3

answer must be in table format or i will give down vote

Oakmont Company has an opportunity to manufacture and sell a new product for a four-year period. The company’s discount rate is 16%. After careful study, Oakmont estimated the following costs and revenues for the new product:


Cost of equipment needed	$	170,000
Working capital needed	$	68,000
Overhaul of the equipment in two years	$	12,000
Salvage value of the equipment in four years	$	16,000

Annual revenues and costs:
Sales revenues	$	330,000
Variable expenses	$	160,000
Fixed out-of-pocket operating costs	$	78,000