Question: please show me what formulas to use for a,b,c,d D E Problem 8-12 Open Seas, Inc., is evaluating the purchase of a new cruise ship.

please show me what formulas to use for a,b,c,d
please show me what formulas to use for a,b,c,d D E Problem
8-12 Open Seas, Inc., is evaluating the purchase of a new cruise

D E Problem 8-12 Open Seas, Inc., is evaluating the purchase of a new cruise ship. The ship will cost $500 million, and will operate for 20 years. OpenScas expects annual cash flows from operating the ship to be $70 million and its cost of capital is 12% a. Prepare an NPV profile of the purchase. b. Calculate the IRR from the data. c. Should Open Seas proceed with the purchase? How far off could Open Seas' cost of capital estimate be before your purchase decision would change? d. S Investment (million) Number of periods (years) Annual cash flow (million) Cost of capital 500 20 70 12% $ a. Prepare an NPV profile of the purchase. Cost of Capital 0% NPV (million) 0 1% 2% 1 22 3% 23 24 25 26 27 4% 5% 6% 7% 8% 9% 10% 11% 12% 28 29 30 31 30 31 32 33 9% 10% 11% 12% 13% 14% 15% 16% 17% 18% 19% 20% 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 b. Calculate the IRR from the data. 55 56 57 Calculated IRR 58 c. Should Open Seas proceed with the purchase? 59 50 Make the investment (Yes/No) 61 d. How far off could Open Seas' cost of capital estimate be before your purchase decision would change? Macimum deviation

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