Halcyon Lines is considering the purchase of a new bulk carrier for $$7\mathrm{.}2$ million. The forecasted revenues are $$6\mathrm{.}4$ million a year and operating costs are $$5\mathrm{.}4$ million. A major refit costing $$3\mathrm{.}4$ million will be required after both the fifth and tenth years. After $15$ years, the ship is expected to be sold for scrap at $$2\mathrm{.}9$ million.

a$.$ What is the NPV if the opportunity cost of capital is $10\%?$

b$.$ Halcyon could finance the ship by borrowing the entire investment at an interest rate of $4\mathrm{.}5\%.$ Will this borrowing opportunity affect your calculation of NPV$?$

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Required $A$

Required $B$

What is the NPV if the opportunity cost of capital is $10\%?$

Note: Negative amount should be indicated by a minus sign. Enter your answer in dollars, not millions of dollars. Do not round intermediate calculations. Round your answer to the nearest whole dollar amount.

Net present value