Posted: August 4th, 2022

ACC -Carnival Glory

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.

a. Determine the annual net cash flow from operating the cruise ship.

b. Determine the net present value of this investment, assuming a 12% minimum.

Expert paper writers are just a few clicks away

Place an order in 3 easy steps. Takes less than 5 mins.

Calculate the price of your order

You will get a personal manager and a discount.
We'll send you the first draft for approval by at
Total price:
$0.00