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answer a,b,c, and d will give thumbs up OpenSeas, Inc. is evaluating the purchase of a new cruise ship. The ship will cost $501 million
answer a,b,c, and d will give thumbs up
OpenSeas, Inc. is evaluating the purchase of a new cruise ship. The ship will cost $501 million and will operate for 20 years. OpenSeas expects annual cash fiows from operating the ship to be $70.7 million and its cost of capital is 12.0%. a. Prepare an NPV profile of the purchase. b. Identity the IRR on the graph. c. Should OpenSeas go ahead with the purchase? d. How far off could Openseas's cost of capital estimate be before your purchase decision would change? a. Prepare an NPV profle 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 2.0% is 5 million. (Round to one decimal place.) Step by Step Solution
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