AND 1 THE USE OF CALCULATORS SPREADSHEETS 2. PLEASE MAKE SURE TO WRITE Sttolal ANSWER EXPLANATIONS THAT ARE SUPPORTED BY YOUR CALCULATIONS WHEN ASKED IN A GINEN QUESTION 3. PLEASE USE EXCEL TO CALCULATE AND SHOW WORKINGS. THANKS. Data Review View Formulas File Help Insert Page Layout Home X Cut General == L Arial - 10 - APA BIU - B.A.A. Wrap Text Merge & Center - Merge & Center - I Copy $ . % 68-98 Cor For - Format Painter Clipboard Number Alignment Font H 07 1 x for 4A A B C D E F G 1 Cruisin' with Lincoln Alumni 2 3 After successfully earning a MBA, Lincoln alumni decide to form their own 4 cruise ship company based out of San Francisco. Lincoln Alumni cruises offers luxury trips along the Pacific Coast 5 and to the Hawaiian Islands. They are debating what to do with their existing ship, S.S. 6 Mission Bay which was built 15 years ago for $90 M and is now fully depreciated. To replace the Mission Bay 7 would cost $180M and its current market value is $150M. Lincoln Alumni Cruises' cost of capital is 15%. 8 9 Lincoln Alumni, dusting off some accounting materials, were able to determine the operating costs 10 for a two-week cruise to Alaska, which would be a change from a three week cruise from travelling down to 11 Guatemala. Here are their estimates (based on 2,000 passengers per cruise and 25 cruises per year) 12 Variable Costs 750,000 750,000 13 14 PER CRUISE 15 16 Labor 17 Food 18 Fuel 19 Port fees and services 20 Marketing, ads, promotion 21 Supplies 22 Totals 23 Fixed Costs 150,000 75,000 650,000 125,000 350,000 150,000 1,500,000 500,000 2,000,000 och 7 a. Assuming that the two-week Alaskan cruise will be priced at $2,000 per passenger, please calculate 8 the break-even number of passengers per cruise based on the data above. 30 b. What do the Lincoln Alumni need to consider beyond these estimates, and if they included this consideration, 1 what would happen to the break-even point? Would there be an issue if the max capacity of the ship was 2000 passengers? 3 HINT: Please calculate the OPPORTUNITY COST and compare against its capacity