Should they buy the ship?

Costa Cruises is considering ordering a new mega cruise ship to replace the lost Concordia. The new ship would cost $1 billion $500,000,000 to be paid today (2020) and the balance upon completion one year from now (2021) (Hint: Year 1). The new ship can hosts 5,000 passengers on each of 40 weekly cruises per year. The average revenue per passenger is $2.500 per weekly cruise. Variable costs equal 40% of passenger revenue. Fixed Costs to operate the ship will total $15,000,000 per year. In addition, after 7 years of service (Hint: Year 8] (the ship will require an overhaul at a cost of $50,000,000. The ship's service life will be 14 years, after which it can be sold to the navy of Andorra for $125,000,000 [Year: 15). The ship's fist year of service will be 2021 [Year: 2). Due to the negative publicity and the Covid-19 fears, the ship is expected to sail with a 40% vacancy rate the first two years of service (2021-22). The next 3 years the (2023-25) the ship will sail with a vacancy rate of 25%. A normal 10% vacancy rate is expected in the last nine years of service. The discount rate is 12%