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I am having a hard time getting my answers using the Excel formulas, can you please show me all my answers using the excel formulas
I am having a hard time getting my answers using the Excel formulas, can you please show me all my answers using the excel formulas for each. I believe my work is correct but I did it by hand.
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 million (at the end of each year) and its cost of capital is 12%. Complete the steps below using cell references to given data or previous calculations. In some cases, a simple cell reference is all you need. To copy/paste a formula across a row or down a column, an absolute cell reference or a mixed cell reference may be preferred. If a specific Excel function is to be used, the directions will specify the use of that function. Do not type in numerical data into a cell or function. Instead, make a reference to the cell in which the data is found. Make your computations only in the blue cells highlighted below. In all cases, unless otherwise directed, use the earliest appearance of the data in your formulas, usually the Given Data section. a. Prepare an NPV profile of the purchase. b. Calculate IRR from the data. c. Is the purchase attractive based on these estimates? d. How far off could OpenSeas' cost of capital estimate be before your purchase decision would change? Investment (million) Number of periods (years) Annual cash flow (million) Cost of capital $500 20 $70 12% a. Prepare an NPV profile of the purchase. Cost of Capital 0% 1% NPV (million) $900.00 $763.19 2% $644.60 3% $541.42 $451.32 4% 5% $372.35 S302.89 6% 7% S241.58 $187.27 8% 9% $139.00 10% $95.95 11% $57.43 $22.86 12% 13% 14% 15% 16% 17% -$8.27 $36.38 $61.85 $84.98 -$106.06 -$125.31 $142.94 18% 19% 20% $159.13 NPV Profile $1,000.00 $800.00 $600.00 $400.00 NPV $200.00 $0.00 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 -$200.00 -$400.00 Cost of Capital b. Calculate IRR from the data. Calculated IRR 12.72% c. Is the purchase attractive based on these estimates? Make the investment (Yes/No) Yes d. How far off could OpenSeas' cost of capital estimate be before your purchase decision would change? Maximum deviation 0.72%Step by Step Solution
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