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 $68.6 million and its cost of capital is 11.5%. 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 capital estimate be before your purchase decision would change? a. Prepare an NPV profile of the purchase. To plot the NPV profile we compute the NPV of the project for various discount rates and plot the curve. The NPV for a discount rate of 2.0% is $ million. (Round to one decimal place.) The NPV for a discount rate of 11.5% is $ million. (Round to one decimal place.) The NPV for a discount rate of 17.0% is $ million. (Round to one decimal place.) The NPV profile is: NPV Profile of Cruise Ship Investment 1,000-

Dynamic is considering investing in a rooftop solar network to generate its own power. Any unused power will be sold back to the local utility company. Between cost savings and new revenues, the company expects to generate $1,560,000 per year in net cash inflows from the solar network installation. The solar network would cost $8.8 million and is expected to have a 18-year useful life with no residual value. Calculate (i) the internal rate of return (IRR) and (ii) the net present value (NPV) assuming the company uses a 12% hurdle rate. (i) Calculate the internal rate of return (IRR). Use technology to find this value. (Enter a percentage rounded to two decimal places, X.XX%.) IRR (as a percentage):

OpenSeas, Inc. is evaluating the purchase of a new cruise ship. The ship will cost $501 million and will operate for 20 years. OpenSeas expects annual cash flows from operating the ship to be $70.7 million and its cost of capital is 12.1%. a. Prepare an NPV profile of the purchase. b. Identify the IRR on the graph. c. Should OpenSeas go ahead with the purchase? d. How far off could OpenSeas's cost of capital estimate be before your purchase decision would change?

aa

Dynamic is considering investing in a rooftop solar network to generate its own power. Any unused power will be sold back to the local utility company. Between cost savings and new revenues, the company expects to generate $1,460,000 per year in net cash inflows from the solar network installation. The solar network would cost $7.2 million and is expected to have a 18-year useful life with no residual value. Calculate (i) the internal rate of return (IRR) and (ii) the net present value (NPV) assuming the company uses a 13% hurdle rate. (i) Calculate the internal rate of return (IRR). Use technology to find this value. (Enter a percentage rounded to two decimal places, X.XX%.) The IRR is %.

Vijay

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 $69.6 million and its cost of capital is 12.0%. a. Prepare an NPV profile of the purchase. b. Identify the IRR on the graph. c. Should OpenSeas go ahead with the​ purchase? d. How far off could​ OpenSeas's cost of capital estimate be before your purchase decision would​ change?   ...

YOU ARE A FINANCIAL ANALYST FOR A COMPANY THAT IS CONSIDERING A NEW PROJECT. IF THE PROJECT IS ACCEPTED, IT WILL USE A FRACTION OF A STORAGE FACILITY THAT THE COMPANY ALREADY OWNS BUT CURRENTLY DOES NOT USE. THE PROJECT IS EXPECTED TO LAST 10 YEARS, AND THE ANNUAL DISCOUNT RATE IS 10% (COMPOUNDED ANNUALLY). YOU RESEARCH THE POSSIBILITIES, AND FIND THAT THE ENTIRE STORAGE FACILITY CAN BE SOLD FOR €100,000 AND A SMALLER (BUT BIG ENOUGH) FACILITY CAN BE ACQUIRED FOR €40,000. THE BOOK VALUE OF THE EXISTING FACILITY IS €60,000, AND BOTH THE EXISITING AND THE NEW FACILITIES (IF IT IS ACQUIRED) WOULD BE DEPRECIATED STRAIGHT LINE OVER 10 YEARS (DOWN TO A ZERO BOOK VALUE). THE CORPORATE TAX RATE IS 40%. DISCUSS WHAT IS THE OPPORTUNITY COST OF USING THE EXISTING STORAGE CAPACITY?

XYZ is evaluating a project that would require the purchase of a piece of equipment for $560,000 today. During year 1, the project is expected to have relevant revenue of $761,000, relevant costs of $205,000, and relevant depreciation of $130,000. XYZ would need to borrow $560,000 today to pay for the equipment and would need to make an interest payment of $38,000 to the bank in 1 year. Relevant net income for the project in year 1 is expected to be $337,000. What is the tax rate expected to be in year 1? O A rate less than 16.43% or a rate greater than 52.83% O A rate equal to or greater than 16.43% but less than 21.92% O A rate equal to or greater than 21.92% but less than 24.67% O A rate equal to or greater than 24.67% but less than 35.22% O A rate equal to or greater than 35.22% but less than 52.83%

OpenSeas, Inc. is evaluating the purchase of a new cruise ship. The ship will cost $501 million and will operate for 20 years. OpenSeas expects annual cash flows from operating the ship to be $70.7 million and its cost of capital is 12.0%. a. Prepare an NPV profile of the purchase. b. Identify the IRR on the graph. c. Should OpenSeas go ahead with the purchase? d. How far off could OpenSeas's cost of capital estimate be before your purchase decision would change? SITTE a. Prepare an NPV profile of the purchase. To plot the NPV profile, we compute the NPV of the project for various discount rates and plot the curve. The NPV for a discount rate of 2.0% is $ million. (Round to one decimal place.)