National Cruise is considering purchasing a new ship that will cost $600,000,000. 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 and Itinerary 2, Caribbean/ Eastern Canada. The CFO estimatedt he following cash flows, which are expected to apply to each of the next 15 years:
Caribbean/ Alaska Caribbean/ E. Canada
Net revenue $120,000,000 $105,000,000
Less:
Direct program expenses ($25,000,000) ($24,000,000)
Indirect program expenses ($20,000,000) ($20,000,000)
Non- operating expenses ($21,000,000) ($21,000,000)
Add back
Cash flow per year $169,000,000 $155,000,000
The estimated cost of the new ship and during of expected cash flows is:
Estimated cost of new ship $600,000,000
Estimated period of cash flows in years 15
a) for each of the itineraries, calculate the present values of the cash flows using required
Caribbean/ Alaska 12%
Cash flow Factor
$169000000 x 6.8109 = $1,151,036,098.72
Caribbean/ Alaska 16%
Cash flow Factor
$169,000,000 x 5.5755 = $942,252,091.48
Caribbean/ E. Canada 12%
Cash flow Factor
$155,000,000 x 6.8109 = $1,055,683,995.87
Caribbean/ E. Canada 16%
Cash flow Factor
$155,000,000 x 5.5755 = $864,195,705.20
my question is, what are the figures to type into the PV function in Excel in order to come up with the above Factor answers?
Rate= ?
Nper= ?
Pmt= ?
Fv= ?
Type= ?
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National Cruise Line, Inc. is considering the acquisition of a new ship that will cost 600,000,000. 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:
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