What are the relevant cash flows associated with

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Question 1: What are the relevant cash flows associated with rehabilitating the Conway? Be as specific as possible and identify the categories to which each cash flow belongs (i.e., Initial Outlay, Terminal, Operating).

Question 2: What are the relevant cash flows for the replacement project (buying a new diesel boat)? Be as specific as possible and identify the categories to which each cash flow belongs (i.e., Initial Outlay, Terminal, Operating).

Question 3: Using payback, NPV, and IRR analyses, should the company accept the project of purchasing a new diesel boat? In other words, do the annual cost savings of the new boat relative to rehabilitating and using the Conway outweigh the additional expense associated with purchasing the new boat? Or, are they better off rejecting the project and just repairing the Conway? Be sure to show all work and explain your reasoning. [Hint: Perform a single analysis on the incremental differences in cash flows for parts 1) and 2) above.]

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In this solution two is attached one is excel sheet in which initial outlay,terminal flow and operating expenses is calculated and in the word file explanation is given about the NPV, IRR and payback of both the alternatives.

Reference no: EM131278286

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