Halcyon Lines is considering the purchase of a new bulk carrier for $$8\mathrm{.}6$ million. The forecasted revenues are $$6\mathrm{.}0$ million a year and

operating costs are $$5\mathrm{.}0$ million. A major refit costing $$3\mathrm{.}0$ 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{.}5$ million.

a$.$ What is the NPV if the opportunity cost of capital is $8\%?$

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$?$