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Net Present Value Method Opulence Corporation operates several large cruise ships. One of these ships, the Bellwether, can hold up to 3,000 passengers and cost
Net Present Value Method Opulence Corporation operates several large cruise ships. One of these ships, the Bellwether, can hold up to 3,000 passengers and cost $600 million to build. Assume the following additional information: - There will be 300 cruise days per year operated at a full capacity of 3,000 passengers. - The variable expenses per passenger are estimated to be $80 per cruise day. - The revenue per passenger is expected to be $400 per cruise day. - The fixed expenses for running the ship, other than depreciation, are estimated to be $74,880,000 per year. - The ship has a service life of 10 years, with a residual value of $100,000,000 at the end of 10 years. a. Determine the annual net cash flow from operating the cruise ship. a. Determine the annual net cash flow from operating the cruise ship
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