5 value: 1.00 points Oakmont Company has an opportunity to manufacture and sell a new...
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5 value: 1.00 points Oakmont Company has an opportunity to manufacture and sell a new product for a four-year period. The company's discount rate is 17%. After careful study, Oakmont estimated the following costs and revenues for the new product: Cost of equipment needed Working capital needed Overhaul of the equipment in two years Salvage value of the equipment in four years $155,000 S 65,000 $ 9,000 S 14,500 Annual revenues and costs Sales revenues Variable expenses Fixed out-of-pocket operating costs $300,000 $ 145,000 $ 75,000 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
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