Halcyon Lines is considering the purchase of a new bulk carrier for $10 million. The forecasted revenues are $6 million a year and operating costs are $4 million. A major refit costing $3 million will be required after both the second and fourth years. After 5 years, the ship is expected to be sold for scrap at $6 million. Question: What is the NPV if the opportunity cost of capital is 8%?

Multiple Choice

-$3.3

-$4.2

-$3.7

-$3.0

-$2.9