OpenSeas, Inc. is evaluating the purchase of a new cruise ship. The ship will cost $500 million

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OpenSeas, Inc. is evaluating the purchase of a new cruise ship. The ship will cost $500 million and will operate for 20 years. OpenSeas expects annual cash flows from operating the ship to be $70 million and its cost capital if 12%.

A.Prepare a NPV profile of the purchase.

B.Identify the IRR on the graph.

C.Should OpenSeas proceed with the purchase?

D.How far could OpenSeas' cost of capital estimate be before you purchase decision would change?

Posted Date: May 18, 2024 10:13 AM

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OpenSeas, Inc. is evaluating the purchase of a new cruise ship. The ship will cost $500 million

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