Congratulations, you were hired as a financial analyst for Opulent Oceans$*$ following successful

completion of your MBA at UTS. Opulent Oceans is the leading luxury cruise provider in the

Australasian region. You fought off tough competition for the job, the recruitment team selected

you for your personable character, analytical mind, ability to solve problems, and experience of

working well in teams. You have really impressed senior management with your finance knowledge

and ability to get the job done.

As a result, the Chief Financial Officer $($CFO$)$ Tim Smart has asked you to perform a capital

budgeting analysis of a new cruise ship. In order to conduct your analysis you will need to collect

information from different departments of the firm. The information that you have collected is

detailed in the numbered paragraphs below. It is your job as a financial analyst to decipher which

information is relevant to the capital budgeting analysis. Upon completion, you will present your

analysis to the Board of Directors who will approve$/$decline the investment in a new cruise ship.

Information gathered from various departments:

Upon hearing news of record numbers of tourists in Sydney, Mary Jones $($CEO of Opulent

Oceans$)$ ordered Insight Partners Consultants to provide a preliminary assessment of the value

that could be added to the firm by the introduction of a new cruise ship "Azure Majesty". The

report projected that tourism and the population in Sydney will continue to grow and a survey

indicated an increase in demand for cruises for adults aged $40-70.$ You discover that such

analysis was provided three$-$months ago and cost Opulent Oceans $$175,000.$

You further discover that five months ago both Tim and Mary travelled to America to learn

more about the latest innovations in cruise ship design and technology. In an email, Jenny Chan

$($from the Accounting department$)$ provides you with their travel receipts which total to

$$17,000.$ She suggests that this amount be included as an opportunity cost incurred in year $0$ of

the Azure Majesty investment decision.