RiverRocks (whose WACC is 12.3%) is considering an acquisition of Raft Adventures (whose WACC is 14.8%). The purchase will cost $102.8 million and will generate cash flows that start at $15.7 million in one year and then grow at 3.6% per year forever. What is the NPV of the acquisition? The net present value of the project is $ million. (Round to two decimal places.)

OpenSeas, Inc. is evaluating the purchase of a new cruise ship. The ship will cost $503.4 million, and will operate for 20 years. OpenSeas expects annual cash flows from operating the ship to be $69.8 million and its cost of capital is 11.90%. a. Prepare an NPV profile of the purchase. b. Identify the IRR on the graph. c. Should OpenSeasOpenSeas proceed with the purchase? d. How far off could OpenSeasOpenSeas' cost of capital estimate be before your purchase decision would change?

Acme Co is considering an acquisition of Pinder Co at the end of the current year. Acme expects to generate $5 million in cash flows next year, after which the cash flows will grow by 2% per year in perpetuity. Pinder expects to generate $2 million in cash flows next year, after which the cash flows will grow by 3% per year in perpetuity. After the acquisition, Acme expects to be able increase its cash flows by $300,000 per year in perpetuity. This increase in cash flows is attributable to the assets owned by Pinder. Acme's beta is 1.2 and has 4,000,000 shares outstanding. Pinder's beta is 0.8 and has 2,000,000 shares outstanding. The risk-free rate is 2% and the market risk premium is 8%. Both Acme and Pinder have no debt. The share prices for Acme and Pinder are equal to the discounted present value of future cash flows. All cash flows occur at the end of the year.   (a) If Acme pays $20 per share acquire Pinder, what is the value of the net benefit to Acme shareholders from the…

Orca Industries is considering the purchase of Shark Manufacturing. Shark is currently a supplier for Orca, and the acquisition would allow Orca to better control its material supply. The current cash flow from assets for Shark is $6.4 million. The cash flows are expected to grow at 9 percent for the next five years before leveling off to 6 percent for the indefinite future. The cost of capital for Orca and Shark is 13 percent and 11 percent, respectively. Shark currently has 3 million shares of stock outstanding and $25 million in debt outstanding. What is the maximum price per share Orca should pay for Shark? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16, Price per share $ 45 47

OpenSeas, Inc. is evaluating the purchase of a new cruise ship. The ship will cost $499 million and will operate for 20 years. OpenSeas expects annual cash flows from operating the ship to be $69.6 million and its cost of capital is 12.0%. a. Prepare an NPV profile of the purchase. b. Identify the IRR on the graph. c. Should OpenSeas go ahead with the​ purchase? d. How far off could​ OpenSeas's cost of capital estimate be before your purchase decision would​ change?   ...

OpenSeas, Inc. is evaluating the purchase of a new cruise ship. The ship will cost $495.1 million, and will operate for 20 years. OpenSeas expects annual cash flows from operating the ship to be $68.9 million and its cost of capital is 11.68%. a. Prepare an NPV profile of the purchase. b. Identify the IRR on the graph. c. Should OpenSeas proceed with the purchase? d. How far off could OpenSeas' cost of capital estimate be before your purchase decision would change? a. Prepare an NPV profile of the purchase. To plot the NPV profile we compute the NPV of the project for various discount rates and plot the curve. The NPV for a discount rate of 2.00% is $☐ million. (Round to two decimal places.)

Tree's Ice Cubes is considering a new three-year expansion project. The initial fixed asset investment will be $1.80 million and the fixed assets will be depreciated straight-line to zero over its three-year tax life, after which time the assets will be worthless. The annual sales of the project is estimated to be $1,005,000, with costs of $485,000. What is the OCF for this project, if the tax rate is 21 percent? (Do not round intermediate calculations.) Multiple Choice $536,800 $812,246 $544,200 $616,150 $746150

OpenSeas, Inc. is evaluating the purchase of a new cruise ship. The ship will cost $502 million and will operate for 20 years. OpenSeas expects annual cash flows from operating the ship to be $71.2 million and its cost of capital is 12.3%. a. Prepare an NPV profile of the purchase. b. Identify the IRR on the graph. c. Should OpenSeas go ahead with the purchase? d. How far off could OpenSeas's cost of capital estimate be before your purchase decision would change? a. Prepare an NPV profile of the purchase. To plot the NPV profile, we compute the NPV of the project for various discount rates and plot the curve The NPV for a discount rate of 2.0% is $ million (Round to one decimal place.)

OpenSeas, Inc. is evaluating the purchase of a new cruise ship. The ship will cost $499 million and will operate for 20 years. Open Seas expects annual cash flows from operating the ship to be $70.5 million and its cost of capital is 12.2%. a. Prepare an NPV profile of the purchase. b. Identify the IRR on the graph. c. Should OpenSeas go ahead with the purchase? d. How far off could OpenSeas's cost of capital estimate be before your purchase decision would change? a. Prepare an NPV profile of the purchase. To plot the NPV profile, we compute the NPV of the project for various discount rates and plot the curve. The NPV for a discount rate of 2.0% is $ million. (Round to one decimal place.)

OpenSeas, Inc. is evaluating the purchase of a new cruise ship. The ship will cost $501 million and will operate for 20 years. OpenSeas expects annual cash flows from operating the ship to be $70.7 million and its cost of capital is 12.1%. a. Prepare an NPV profile of the purchase. b. Identify the IRR on the graph. c. Should OpenSeas go ahead with the purchase? d. How far off could OpenSeas's cost of capital estimate be before your purchase decision would change?