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ASAP will leave a like OpenSeas , Inc. is evaluating the purchase of a new cruise ship. The ship will cost $ 4 9 5
ASAP will leave a like OpenSeas Inc. is evaluating the purchase of a new cruise ship. The ship will cost $ million and will operate for years. OpenSeas expects annual cash flows from operating the ship to be $ million and its cost of capital is
a Prepare an NPV profile of the purchase.
b Identify 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?
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