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 Attached are 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.)
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