Project #40081 - Finance - Project Investment Question (Aircraft Carrier)

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Question

Seahawk Lines is considering the purchase of a new bulk carrier for $8 million. The revenues are forecast to be $5 million a year and operating costs are $4 million. A major refit costing $2 million will be required after both the  fifth and tenth years. After 15 years the ship is expected to be sold for scrap at $1.5 million. The discount rate is 8%.

 

What is the present value of the ship's cashflows, excluding the $8 million cost?

 

Should Seahawk buy the carrier?

Subject Business
Due By (Pacific Time) 09/15/2014 06:00 pm
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