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OpenSeas, Inc. is evaluating the purchase of a new cruise ship. The ship will cost $504 million and will operate for 20 years. OpenSeas expects
OpenSeas, Inc. is evaluating the purchase of a new cruise ship. The ship will cost $504 million and will operate for 20 years. OpenSeas expects annual cash flows from operating the ship to be $69.4 million and its cost of capital is 11.8%. ***** a. Prepare an NPV profile of the purchase. To plot the NPV profile, we compute the NPV of the project for various discount rates and plot the curve The NPV for a discount rate of 2.0% is $ 630.8 million. (Round to one decimal place.) million. (Round to one decimal place.) The NPV for a discount rate of 11.5% is $
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