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ch$09$ Excel Student

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Problem $9-4$ Present Value and "What IT$"$ Analysis

National Cruise Line, Ince. is considering the acquisition of a new ship that will cost $$3000000,000.$ In this regand. the president of the company asked the CFO to analyze cadt flows associated with operining the ship onder two alternative itineraries: Ltinerary $1,$ Caribbean Wintee$/$Alaska Summer and linerary $2,$ Canlecan Winter Eavern Canada Summer. The CFO estimated the following cash flows, which are expectod ho apply to cach of the sext $15$ years:

$2.$ For each of the inineraries, calculate the present values of the cadd flows uing required nates of netiurs of boch $12$ and $16\%$ using both present value fistoes and separately uing Eweel PV functive. Auame a $15-$year time borison. Should the company parchase the ship with either or both required rates of notern?

b$.$ The peveident is unceriain whether a $12$ percent or a $16$ percent required return is appoprime. Lyplais why.

$6.$ Fecusing on a $12$ percem evquired rate of retirn, what would be the opportunity coit te the ceeppuing of uing the ship in the Caribtean Iastern Canads iniserary rather thas a Carhbean$/$Alaks iensriy? SHOW EXCEL FORMULAS