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Halcyon Lines is considering the purchase of a new bulk carrier for $8.6 million. The forecasted revenues are $6.1 million a year and operating costs are $5.1 million. A major refit costing $3.1 million will be required after both the fifth and tenth years. After 15 years, the ship is expected to be sold for scrap at $2.6 million.

a. What is the NPV if the opportunity cost of capital is 7%?

Financial Management, Finance

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