FastTrack Bikes, Inc. is thinking of developing a new composite road bike. Development will take six years and the cost is $223,000 per year. Once in production, the bike is expected to make $312,200 per year for 10 years. Assume the cost of capital is 14%. Calculate the NPV of this investment opportunity, assuming all cash flows occur at the end of each year. Should the company make the investment? Accept NPV 968,659 Reject NPV =125.263 Accept NPV 968,223 Reject NPV 867,173 OpenSeas, Inc. is evaluating the purchase of a new cruise ship. The ship would cost $500 million, but would operate for 20 years. OpenSeas expects annual cash flows from operating the ship to be $69.6 million (at the end of each year). Should you accept or reject the project if the cost of capital is 2% Accept because IRR=13%, which is greater than the cost of capital Reject because IRR =3%, which is greater than the cost of capital Reject because IRR=13%, which is greater than the cost of capital Accept because IRR=3%, which is greater than the cost of capital