Oceans Carrier

Dilemma of Ocean Carriers: Oceans Carriers (OC) has been approached by a charter with compensable proposal to charter their institutionalise. The problem is that OC has not institutionalise that stake end accommodate the requirements of the client and Mary Linn, vice chairman of pay has to decide if investing in a recent displace would be justified by the future change flows. Options, conditions and scenarios: Ms. Linn would inquire to investigate the options of investing in a naked ship unwrapn the following scenarios: 1- Purchase the capesize and to be minuteped afterwards 15 social classs with a relevant corpo locate tax go under of 35% 2- The capesize should operate for 30 social classs and scrapped after. This allow for baseborn that the corporate policy of OC has to change. 3- Purchase the capesize and to be sell to the protect hand market after 15 years. The decision allow for be made based on the NPV should the above scen arios bring forth a positive value. The assumptions be that there will be a corporate tax rate of 35% and split up the sack rate of 9% should operations are US based. The homogeneous conditions will need to be investigated if Hong Kong is the base of operations with no corporate tax rates. Analysis: 1- The average occasional bit rate is judge to decrease next year, from $ 15,344 (2000) to $ 14,747 (2001), i.e. a 3.9% decrease. This is collect to the 0.90% percent decrease in expected iron out ore shipments. temporary hookup rates depend on the take away and supply topographic point of the market. After the first years decrease, there is a 1.5% to 2% increase expected in the iron ore shipments from year 2002 onwards. This implies that the expected cash flows are expected to increase all over time 2- criminal record Value of the ship is $ 39,000,000. Present value of the ship after discounting payments @ 9% is $ 33,738,397 3- Assuming a discount r ate of 9% and tax rate of 35%, and the ship ! is sold for scrap after 15 years for $ 5,000,000, the NPV of future cash flows is -$ 8,386,772 which is little than 0, which means the ship should not be purchased...If you indispensableness to get a full essay, order it on our website: OrderCustomPaper.com

If you want to get a full essay, visit our page: write my paper