OpenSeas, Inc. is evaluating the purchase of a new cruise ship. The ship would cost $504 million, but would operate for 20 years. OpenSeas expects annual cash flows from operating the ship to be $69.3 million (at the end of each year, and its cost of capital is 11.5% a. Prepare an NPV profile of the purchase using discount rates of 2.0%, 11.5% and 17.0%. b. Identify the IRR (to the nearest 1%) on a graph. c. Is the purchase attractive based on these estimates? d. How far off could OpenSeas? cost of capital be (to the nearest 1%) before your purchase decision would change? Note: Subtract the discount rate from the actual IRR. Use Excel to compute the actual IRR. 1004 3 10 12 0- -100- 200- 18 20 Discount rate (%) The approximate IRR from the graph is 12.1%. (Round to the nearest integer.) C. Is the purchase attractive based on these estimates? (Select the best choice below.) A. Yes, because at a 11.5% discount rate, the NPV is positive. B. Yes, because at a 11.5% discount rate, the NPV is negative. OC. No, because at a 11.5% discount rate, the NPV is negative, OD. No, because at a 11,5% discount rate, the NPV is positive. d. How far off could OpenSeas? cost of capital be to the nearest 1%) before your purchase decision would change? The cost of capital estimate can be off by [% (Round to three decimal places.)