SeaCruises plc is evaluating the purchase of a new ship. The ship would cost 25...
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SeaCruises plc is evaluating the purchase of a new ship. The ship would cost 25 million upfront to purchase, and it would operate for 10 years. The net cash flows from operating the ship are expected to be 6 million at the end of the first year, and to grow at 3% per year. At the end of 10 years, the ship will be sold for an expected value of 50 million. The companys cost of capital is 6% per year. What is the Net Present Value of this investment, in million?
| A. | 47.83 million | |
| B. | 77.83 million | |
| C. | 49.91 million | |
| D. | 52.83 million |
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