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Icyon Lines is considering the purchase of a new bulk carrier for $ 7 . 2 million. The forecasted revenues are $ 6 . 4

Icyon Lines is considering the purchase of a new bulk carrier for $7.2 million. The forecasted revenues are $6.4 million a year and erating costs are $5.4 million. A major refit costing $3.4 million will be required after both the fifth and tenth years. After 15 years, the ip is expected to be sold for scrap at $2.9 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 4.5%. Will this borrowing opportunity affect your calculation of NPV?
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Halcyon could finance the ship by borrowitg the entire investment at an interest rate of 4.5%. Will this borrowing opportunity affect your calculation of NPV?
Will this borrowing opportunity affect your calculation of NPV?
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