Can someone please help me with my homework I do not understand it?

Luca has noticed an increased interest in shark fishing. But to offer shark fishing charters, he's going to need a bigger boat. Luca estimates that he could fill a 20 passenger boat 12 days per month without offering any group discounts. The bigger boat would cost $1,500,000. Luca estimates he can use the boat in his business for 15 years and can sell the boat for $40,000 at the end of those 15 years. Luca would need to buy 150 gallons of fuel per charter. He could charge $500 per passenger. His food costs per person would remain unchanged. He would need to increase his insurance coverage, which would cost an additional $1,200/year and would need to hire an additional deckhand for each trip (remember the additional deckhand wants to eat lunch too). He would need a new advertising strategy, which he believes would cost $4,500/year (he would discontinue buying space in magazines). While Luca loves the idea of running a shark fishing charter, his husband, Clemenza, is sick of Luca coming home smelling like fish. Clemenza has suggested that Luca convert his existing

boat to a whale watching boat. With this investment option, Luca believes he could sell out all 12 seats for all 12 charters per month. He will charge each passenger $400. He could run the whale watching operation with his existing two crew and maintain the same gas usage, insurance, and per person cost for lunch. To equip the existing boat for whale watching, Luca would need to purchase and install a sonar and underwater camera system. He estimates this new system would cost $125,000 and could be used to generate income for 5 years, at which point it would be worth nothing. Luca would continue advertising in magazines for $600/quarter. Under either new investment option, Luca's costs for his business license and marina slip would not change.

Luca wishes to earn at least 8% on either new investment. Otherwise, he'll just stick with his current business model of running fishing charters.

Questions:

1. What is the payback period of the Shark Fishing Charter Investment? Round to two decimal places.

[124] years_

1. What is the payback period of the Whale Watching Charter Investment? Round to two decimal places.

[11] years_

Based solely on the payback period, which investment would you recommend?

1. Group of answer choices

• Whale Watching investment
• Shark Investment

1. Using excel, what is the present value of the future cash flows of the Shark Investment? Round to the nearest whole dollar.

$[pvshark]_

1. Using excel, what is the Net Present Value of the Shark Investment? Round to the nearest whole dollar.

$[npvshark]_

1. Using thePresent Value of an Annuity Download Present Value of an Annuity

tables, what is the present value of the future cash flows of the Shark Investment? Round to the nearest whole dollar.

$[pvsharktable]_

1. Using thePresent Value of an Annuity tables

Download Present Value of an Annuity tables

, what is the Net Present Value of the Shark Investment? Round to the nearest whole dollar.

$[npvshrktable]_

1. Using excel, what is the present value of the future cash flows of the Whale Watching Investment? Round to the nearest whole dollar.

$[pvshark]_

1. Using excel, what is the Net Present Value of the Whale Watching Investment? Round to the nearest whole dollar.

$[npvshark]_

1. Using thePresent Value of an Annuity

Download Present Value of an Annuity

tables, what is the present value of the future cash flows of the Whale Watching Investment? Round to the nearest whole dollar.

$[pvsharktable]_

1. Using thePresent Value of an Annuity tables

Download Present Value of an Annuity tables

, what is the Net Present Value of the Whale Watching Investment? Round to the nearest whole dollar.

$[npvshrktable]_

1. Based solely on the Net Present Value, which Investment opportunity would you recommend?

Group of answer choices

• Shark Investment
• Whale Watching investment