Calculate the present values of the cash flows

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Reference no: EM13300560

Present Value and "What If" Analysis

National Cruise Line, Inc. is considering the acquisition of a new ship that will cost $200,000,000

In this regard, the president of the company asked the CFO to analyze cash flows associated with operating the ship under two alternative itineraries: Itinerary 1, Caribbean Winter/Alaska Summer and Itinerary 2, Caribbean Winter/Eastern Canada Summer. The CFO estimated the following cash flows, which are expected to apply to each of the next 15 years:

Required:

Part a. For each of the itineraries, calculate the present values of the cash flows using required rates of return of both 10% and 15% Assume a 15 -year time horizon. Should the company purchase the ship with either or both required rates of return?

Attachment:- W5-Q9-4.xlsx

Reference no: EM13300560

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