1. Halcyon Lines is considering the purchase of a new bulk carrier for $8.1 million. The forecasted revenues are $5.1 million a year and operating costs are $4.1 million. A major refit costing $2.1 million will be required after both the fifth and tenth years. After 15 years, the ship is expected to be sold for scrap at $1.6 million. a. What is the NPV if the opportunity cost of capital is 9%? (Enter your answer in dollars, not millions of dollars. Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to the nearest whole dollar amount.)

2. Old Time Savings Bank pays 8.25% interest on its savings account. If you deposit $1,000 in the bank and leave it there:

A. How much interest will you earn in the second year? "I answered it as 171.81, and it showed incorrect"

B. How much interest will you earn in the tenth year? "I answered it as 209.42, and it showed incorrect"

3. Kangaroo Autos is offering free credit on a new $12,000 car. You pay $1,800 down and then $340 a month for the next 30 months. Turtle Motors next door does not offer free credit but will give you $1,040 off the list price.

a. If the rate of interest is 0.83% a month, calculate the present value of the payments to Kangaroo Autos. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

4. You own an oil pipeline that will generate a $3.7 million cash return over the coming year. The pipelines operating costs are negligible, and it is expected to last for a very long time. Unfortunately, the volume of oil shipped is declining, and cash flows are expected to decline by 5.0% per year. The discount rate is 8%.

What is the PV of the cash flows if the pipeline is scrapped after 17 years? (Enter your answer in dollars, not millions of dollars. Do not round intermediate calculations. Round your answer to the nearest whole dollar amount.)

5. A leasing contract calls for an immediate payment of $111,000 and nine subsequent $111,000 semiannual payments at six-month intervals. What is the PV of these payments if the annual discount rate is 9%? (Do not round intermediate calculations. Round your answer to 2 decimal places.)