Corporation has recently placed into service some of the largest cruise ships in the world. One of these ships, the Carnival Glory, can hold up to 3,000 passengers and cost $510 million to build. Assume the following additional information:
•The average occupancy rate for the new ship is estimated to be 80% of capacity.
•There will be 300 cruise days per year.
•The variable expenses per passenger are estimated to be $75 per cruise day.
•The revenue per passenger is expected to be $310 per cruise day.
•The fixed expenses for running the ship, other than depreciation, are estimated to be $78,000,000 per year.
•The ship has a service life of 10 years, with a salvage value of $85,000,000 at the end of 10 years.
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Write My Essay For Mea. Determine the annual net cash flow from operating the cruise ship.
b. Determine the net present value of this investment, assuming a 12% minimum
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