Question
OpenSeas, Inc., is evaluating the purchase of a new cruise ship. The ship would cost $400 million today. OpenSeas expects annual cash flows from the
OpenSeas, Inc., is evaluating the purchase of a new cruise ship. The ship would cost $400 million today. OpenSeas expects annual cash flows from the new ship to be $70 million and these cash flows will last forever. The cost of capital is 16%.
What is the IRR of the new cruise ship? Please make your answer in the unit of percent.
______%
Following question 4, suppose the company has a desired payback period of 5 years.
Which statement is true about applying the payback method to the new project?
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Financial Markets And Institutions
Authors: Anthony Saunders, Marcia Cornett
8th Edition
1264098723, 978-1264098729
