OCEAR CARRIERS INTEROFFICE MEMORANDUM TO:MS. MARY LINN, VICE electric chair OF FINANCE FROM:CALEB CHOU, DIRECTOR OF STRATEGIC FINANCE interpose:NEW 180,000 TON CAPESIZE VESSEL naming:JANUARY 2001 (23/03/09 REWRITE) CC:DR. TOM MILLER, honor LOUIS UNIVERSITY DEPT. OF FINANCE We recommend immediately committee a new 180,000 loot ton capesize carrier to increment our capacity to meet alter pot beamping demands. We conservatively consider that the new carrier go forth have a net Present regard as of $407,000 provided the channel ope respects for 25 days and is delivered by 2003. The new vas whitethorn not be a profitable drive should the ship be toss outped at 15 years, per standard ocean Carriers policy. Our Net Present valuate calculations are based on the succeeding(a) conservative assumption: 9% discount footstep for strickle flow. Current inflation graze estimates are 3%. A 9% discount rate assumes a significant chime of capital above inflation. Our synopsis yielded an IRR of 9.18% over the 25 years. 1.2% forecasted human activity quotidian fill rate ontogeny later on 2005. Our shipping-industry consultants provided harvest-tide projections for iron ore shipments at 1.5% later 2005. With Australian and Indian ore exports ascension in 2003, real suppuration may very come up exceed 1.5%.
Should consider rate growth defend up with inflation, NPV would increase significantly. market average expected daily engage rates after 2005. Our initial enlister has proposed a three-year charter from early(a) 2003 through 2005. We have fabricated that after 2005, the new vessel would be subject to easily lower market rates. However, our fleshy relationships with our charterers increases the chance for more longer-term charters at higher rates in the future. NPV increases significantly with each charter of this type. No scrap observation appraise after 25 years. Because we lack data for scrap determine after 25 years, we have assumed $0 encourage for the ship at the end of 25 years. It is for sure achievable that scrap value will be...If you want to astound a full essay, coif it on our website: Ordercustompaper.com
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