Based on the information provided below, compute the Net Present Value of the project (CO 3).

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Based on the information provided below, compute the Net Present Value of the project (CO 3).

Assignment:   Based on the information provided below, compute the Net Present Value of the project (CO 3). A Net Present Value Template is Attached.  (Hint: Don’t forget to update the discount rate to the amount required for this project and add your cash flow numbers.)

Royal Dutch Shipping is planning on Investing $1,600,000 to buy a freighter.   Prepare a net present value analysis based on the assumption that the freighter will be sold for 10% of its cost at the end of the year 5.  Assume a 10% cost of capital.  Annual operating cash flows for the project are:

Year 1:   $380,000

Year 2:   $390,000

Year 3:   $400,000

Year 4:   $410,000

Year 5:   $420,000

Prepare a loan amortization schedule based on monthly payments for the $1,600,000 if Royal Dutch Shipping can pay 10% down on a loan for $1,600,000 and can get a loan for 6% interest for 10 years (do not include this in your Net Present Value computations.  This is a separate issue.  (CO 3).  (Hint: www.bankrate.com/calculators/mortgages/amortization-calculator.aspx )

Instructions:  Prepare the homework in Excel template provided. Save your assignment file as ‘LastnameFirstinitial-FINC300-3?, and submit by 11:55 pm ET, Day 7 (Sunday).

Your assignment will be graded according to the following Grading Rubric:

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