ch 11 q 4

Net Fresent Value Method for a Service Company Opulence Corporation has recentiy placed into service some of the largest cruise ships in the world. One of these ships, the Bellwether, can hold up to 2,400 passengers and it can cost \\( \\$ 490 \\) million to bull. Assume the following adetional information: - There mill be 300 cruise dars per vear operated at a full capacty of 2,400 passengers. - The variable expenses per passenger are estimated to be \\( \\$ 80 \\) per cruise day. - The revenue per possenger is expected to be \\( \\$ 400 \\) per cruise day. - The fixed expenses for running the ship, other than deprecistion, are estimated to be \\( \\$ 59,904,000 \\) per year. - The ship has a service lfe of 10 years, with a residual value of \\( \\$ 80,000,000 \\) at the end of 10 years. Present Value of an Anmuity of \\( \\$ 1 \\) at Compound Interest a. Determine the annual net cash flow from operating the cruise ship