a$.$ Prepare an NPV profile of the purchase.

b$.$ Identify the IRR on the graph.

c$.$ Should OpenSeas proceed with the purchase?

d$.$ How far off could OpenSeas' cost of capital estimate be before your purchase decision would change?

a$.$ Prepare an NPV profile of the purchase.

To plot the NPV profile we compute the NPV of the project for various discount rates and plot the curve.

The NPV for a discount rate of $2\mathrm{.}0\%$ is $ million. $($Round to one decimal place.$)$

The NPV for a discount rate of $11\mathrm{.}5\%$ is $ million. $($Round to one decimal place.$)$

The NPV for a discount rate of $17\mathrm{.}0\%$ is $ million. $($Round to one decimal place.$)$

The NPV profile is:

b$.$ Identify the IRR on the graph.

The approximate IRR from the graph is $,\%.($Round your answer to one decimal place.$)$

c$.$ Should OpenSeas go ahead with the purchase? $($Select the best choice below.$)$

A$.$ No$,$ because at a discount rate of $12\mathrm{.}0\%,$ the NPV is positive.

B$.$ No$,$ because at a discount rate of $12\mathrm{.}0\%,$ the NPV is negative.

C$.$ Yes, because at a discount rate of $12\mathrm{.}0\%,$ the NPV is positive.

D$.$ Yes, because at a discount rate of $12\mathrm{.}0\%,$ the NPV is negative.

The cost of capital estimate can be off by $\%.($Round to one decimal place.$)$