Carnival Corporation has recently placed into service some of the largest cruise ships in the world. One of these ships can hold up to 3.600 passengers and cost $750 million to build. Assume the following additional information - There will be 300 cruise days per year operated at a fu capacity of 3.600 passengers The variable expenses per passenger are estimated to be 890 per cruise day - The revenue per passenger is expected to be $450 per cruise day The forced expenses for running the ship, other than depreciation estimated to be $100.000.000 - The ship has a service life of 10 years, with a residual value of $120.000.000 at the end of 10 years Present Value of $1 at Compound Interest Year 6% 10% 12% 15% 20% 0.943 0.90 0.909 0.093 0.93 0.870 0.870 0.833 0.00 0.826 0.07 0.250 0.604 040 0.751 0.712 0.658 0.579 0.683 0.636 0.572 0.482 0.747 0.567 0.497 0.402 0.705 0.564 0.507 0.432 0.335 0.665 0.513 0.452 0.37 0229 0.627 0.467 0.404 0.327 0.233 0.592 0.424 0.361 0.284 0.104 10 0 .550 0.000 0.322 0.247. 0.792 Present Value of an Annuity of $1 at Compound Interest Year 696 109 129 15% 209 0.943 0.909 0.893 0.870 0.833 1.833 1.736 1.690 1.626 1.528 2.673 2.487 2.402 2.283 2.106 3.465 3.170 3.037 2.855 2.589 4.212 3.791 3.605 3.353 2.991 4.917 4.355 4.111 3.785 3.326 5.582 4.868 4.564 4.160 3.605 6.210 5.335 4.968 4.487 3.837 6.802 5.759 5.328 4.772 4.031 10 7.360 6.145 5.650 5.019 4.192 a. Determine the annual net cash flows from operating the cruise ship. Enter all amounts as positive numbers Revenues 4,039,200 x X Less: Variable expenses 1,663,200 Fixed expenses Annual net cash flows 107.360 6.145 5.6505.0194.192 a. Determine the annual net cash flows from operating the cruise ship. Enter all amounts as positive numbers. Revenues 4,039,200 x 1,663,200 x Less: Variable expenses Fixed expenses Annual net cash flows b. Determine the net present value of this investment, assuming a 12% minimum rate of retum. Use the present value tables above. Present value of annual net cash flows S Present value of residual value Total present value $ 935,520,000 X Initial Investment Net present value