Openseas inc is evaluating the purchase of a new cruise, Ask an Expert

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?OpenSeas, Inc. is evaluating the purchase of a new cruise ship. The ship will cost $499 ?million, and will operate for 20 years. OpenSeas expects annual cash flows from operating the ship to be $69.9 million and its cost of capital is 12.2%.

a. Prepare an NPV profile of the purchase.

b. Identify the IRR on the graph.

c. Should OpenSeas proceed with the? purchase?

d. How far off could? OpenSeas' cost of capital estimate be before your purchase decision would? change?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92810351

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