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Homework.H08 Score: 0 of 1 pt B 8-12 (book/static) HW Score: 37.5%, 3 of 8 pts OpenSeas, Inc. is evaluating the purchase of a new
Homework.H08 Score: 0 of 1 pt B 8-12 (book/static) HW Score: 37.5%, 3 of 8 pts OpenSeas, Inc. is evaluating the purchase of a new cruise ship. The ship will cost $500 million, and will operate for 20 years. OpenSeas expects annual cash flows from operating the ship to be $70.0 million and its cost of capital is 12.0%. a. Prepare an NPV profile of the purchase Identify the IRR on the graph. d. How far off could OpenSeas' cost of capital estimate be before your purchase decision would change? a. Prepare an NPV profile of the purchase To plot the NPV profile we compute the NPV of the project for various discount rates and plot the cur The NPV for a discount rate of 2.0% iss million. (Round to one decimal place.) Enter your answer in the answer box and then click Check Answer MacBook
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