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How a.For each of the itineraries, calculate the present values of the cash flows using required rates of return of both 12 and 16% using
How a.For each of the itineraries, calculate the present values of the cash flows using required rates of return of both 12 and 16% using both present value factors and separately using Excel PV function. Assume a 15-year time horizon. Should the company purchase the ship with either or both required rates of return? (Use Appendix Table B9.2 to arrive at the factor) Caribbean/Alaska 12% Cash Flow Factor $ 169,000,000 6.8109 = $ 1,151,036,099 16% $ 169,000,000 5.5755 = $ 942,252,091 Caribbean/ Eastern Canada 12% $ 155,000,000 6.8109 = $ 1,055,683,996 16% $ 155,000,000 5.575456163 = $ 864,195,705 Caribbean/Alaska Caribbean/ Eastern Canada Rate 12% 16% 12% 16% Number of periods 15 15 15 15 Cash Flow $ 169,000,000 $ 169,000,000 $ 155,000,000 $ 155,000,000 Future value $0 $0 $0 $0 Type 0 0 0 0 PV
| How | ||||||
| a.For each of the itineraries, calculate the present values of the cash flows using required rates of return of both 12 and 16% using both present value factors and separately using Excel PV function. Assume a 15-year time horizon. Should the company purchase the ship with either or both required rates of return? | ||||||
| (Use Appendix Table B9.2 to arrive at the factor) | ||||||
| Caribbean/Alaska | ||||||
| 12% | Cash Flow | Factor | ||||
| $ 169,000,000 | 6.8109 | = | $ 1,151,036,099 | |||
| 16% | ||||||
| $ 169,000,000 | 5.5755 | = | $ 942,252,091 | |||
| Caribbean/ Eastern Canada | ||||||
| 12% | ||||||
| $ 155,000,000 | 6.8109 | = | $ 1,055,683,996 | |||
| 16% | ||||||
| $ 155,000,000 | 5.575456163 | = | $ 864,195,705 | |||
| Caribbean/Alaska | Caribbean/ Eastern Canada | |||||
| Rate | 12% | 16% | 12% | 16% | ||
| Number of periods | 15 | 15 | 15 | 15 | ||
| Cash Flow | $ 169,000,000 | $ 169,000,000 | $ 155,000,000 | $ 155,000,000 | ||
| Future value | $0 | $0 | $0 | $0 | ||
| Type | 0 | 0 | 0 | 0 | ||
| PV |
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Organizational Behaviour Concepts Controversies Applications
Authors: Nancy Langton, Stephen P. Robbins, Timothy A. Judge, Katherine Breward
6th Canadian Edition
132310317, 978-0132310314
