Opulence Corporation operates several large cruise ships. One of these ships, the Bellwether, can hold up to 2,300 passengers and cost $460 million to build. Assume the following additional information:

• There will be 300 cruise days per year operated at a full capacity of 2,300 passengers.
• The variable expenses per passenger are estimated to be $95 per cruise day.
• The revenue per passenger is expected to be $475 per cruise day.
• The fixed expenses for running the ship, other than depreciation, are estimated to be $68,172,000 per year.
• The ship has a service life of 10 years, with a residual value of $70,000,000 at the end of 10 years.

Present Value of $1 at Compound Interest
Year	6%	10%	12%	15%	20%
1	0.943	0.909	0.893	0.870	0.833
2	0.890	0.826	0.797	0.756	0.694
3	0.840	0.751	0.712	0.658	0.579
4	0.792	0.683	0.636	0.572	0.482
5	0.747	0.621	0.567	0.497	0.402
6	0.705	0.564	0.507	0.432	0.335
7	0.665	0.513	0.452	0.376	0.279
8	0.627	0.467	0.404	0.327	0.233
9	0.592	0.424	0.361	0.284	0.194
10	0.558	0.386	0.322	0.247	0.162

Present Value of an Annuity of $1 at Compound Interest
Year	6%	10%	12%	15%	20%
1	0.943	0.909	0.893	0.870	0.833
2	1.833	1.736	1.690	1.626	1.528
3	2.673	2.487	2.402	2.283	2.106
4	3.465	3.170	3.037	2.855	2.589
5	4.212	3.791	3.605	3.352	2.991
6	4.917	4.355	4.111	3.784	3.326
7	5.582	4.868	4.564	4.160	3.605
8	6.210	5.335	4.968	4.487	3.837
9	6.802	5.759	5.328	4.772	4.031
10	7.360	6.145	5.650	5.019	4.192

a. Determine the annual net cash flow from operating the cruise ship.

Revenues	$fill in the blank 1
Variable expenses	fill in the blank 2
Fixed expenses	fill in the blank 3
Annual net cash flow	$fill in the blank 4

b. Determine the net present value of this investment, assuming a 10% minimum rate of return. Use the present value tables provided above. If required, round to the nearest whole dollar.

Present value of annual net cash flows	$fill in the blank 5
Present value of residual value	fill in the blank 6
Total present value	$fill in the blank 7
Less amount to be invested	fill in the blank 8
Net present value	$fill in the blank 9