eBook Net Present Value Method Blue Ocean Corporation placed into service some of the largest cruise ships in the world. One of these ships can hold up to 2,900 passengers and cost $580 million to build. Assume the following additional information: . There will be 300 cruise days per year operated at a full capacity of 2,900 passengers. The variable expenses per passenger are estimated to be $100 per cruise day. The revenue per passenger is expected to be $500 per cruise day. The fixed expenses for running the ship, other than depreciation, are estimated to be $89,600,000 per year. The ship has a service life of 10 years, with a residual value of $90,000,000 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 10 169 0.627 0.467 0.404 0.327 0.233 0.592 0.424 0.361 0.284 0.194 0.558 0.386 0.322 0.247 0.162 car remaining Previous Next