Safe Bulkers is considering the purchase of a used bulk carrier for $8 million.
The forecast revenues are $5 million a year and operating costs are $ 4 million.
Maintenance expenses costing $2 million will be required after both the 5th year and 10th year. After 15 years, the ship is expected to be sold for scrap at $1.5million.
If the discount rate is 8 percent, what is the ship’s NPV