Homework: New Economy Transport- Principles of Corporate Finance
• Calculate the NPV of the proposed overhaul of the Vital Spark, with and without the new engine and control system. To do the calculation, you will have to prepare a spreadsheet table showing all costs after taxes over the vessel's remaining economic life. Take special care with your assumptions about depreciation tax shields and inflation.
• Calculate and compare the equivalent annual costs of (i) overhauling and operating the Vital Spark for 12 more years, and (ii) buying and operating the proposed replacement vessel for 20 years. What should Mr. Handy do if the replacement's annual costs are the same or lower?
• Suppose the replacement's equivalent annual costs are higher than the Vital Spark's. What additional information should Mr. Handy seek in this case?
Format your homework according to the give formatting requirements:
• The answer must be using Times New Roman font (size 12), double spaced, typed, with one-inch margins on all sides.
• The response also includes a cover page containing the student's name, the title of the homework, the course title, and the date. The cover page is not included in the required page length.
• Also include a reference page. The references and Citations should follow APA format. The reference page is not included in the required page length.
Attachment:- Case.rar