Ocean Carrier Case Study Summary In order to accept the recently submitted leasing contract proposal‚ Ocean Carriers would have to purchase a new ship. The purchasing of a new ship is a considerable investment. We have analyzed whether or not Ocean Carriers should make this investment using Free Cash Flow and Net Present Value (NPV) analysis. Given the details of the contract‚ the forecasted daily time charter rates‚ and the costs data; we have concluded that Ocean Carriers should not accept
Premium Net present value Cash flow Depreciation
Background Ocean Carriers Inc. is a shipping company specializing in the operation of capsizes bulk dry carriers. In January 2001‚ Mary Linn‚ the vice President of Finance for Ocean Carriers was evaluating the purchase of a new capsize carrier for a three years lease proposed by a motivated customer. The leasing contract offers very attractive terms‚ but no ship in Ocean Carrier’s current fleet met the customer’s requirements. In addition‚ this proposed contract is only for three years. Therefore
Premium Net present value
LNG CARRIERS History The first LNG carrier Methane Pioneer (dwt 5034 tons) left the Calcasieu River on the Louisiana Gulf coast on 25 January 1959. Carrying the world’s first ocean cargo of LNG‚ it sailed to the UK where the cargo was delivered. Subsequent expansion of that trade has brought on a large expansion of the fleet to today where giant LNG ships carrying up to 266‚000 m3 are sailing worldwide. At the end of 2005‚ a total of 203 vessels have been built‚ of which 193 are still in service
Premium LNG carrier Natural gas Petroleum
THE BEACH CARRIER CASE STUDY The Beach Carrier is a new product concept developed by Mary Ricci. It is a large‚ lightweight‚ durable bag that is designed to carry everything required for a day at the beach‚ including a chair. The Beach Carrier can be folded down to a 12-inch by 12-inch square for easy storage when not in use. It comes with an adjustable strap and various-sized pockets for carrying all types of items to the beach or other outdoor activities (i.e. concerts‚ picnics‚ and barbecues)
Premium English-language films
Guide for Case Analyses “Ocean Carriers” Objectives of case: The key objective is to develop an understanding of how discounted cash flow analysis can be used to make investment and corporate policy decisions. 1. Determine the value and net present value of a real assets; 2. Distinguishing between book value and market value; 3. Identifying and forecasting incremental expected cash flows‚ including initial and ongoing capital expenditures‚ investment in net working capital‚
Premium Net present value Cash flow Depreciation
Case Study 1 – Ocean Carriers 1. The Capital Budgeting Decision Should Ms. Linn purchase the Capesize vessel? Assume that Ocean Carriers is a U.S. firm and is subject to 35% taxation. (Please see excel sheets) From our analysis it appears that Ms. Linn should not buy the Capesize vessel. The Net Present Value on the Ocean Carrier is not a positive number‚ a clear indicator that buying the vessels is not a good idea. The tax rate of 35% makes a lot of difference in determining this NPV
Premium Net present value
Ocean Carriers Objectives • Forecast pro-forma cash flows for a project • Estimate project values using Net Present Value (NPV) • Conduct sensitivity analysis for the forecast inputs Setting • January 2001 • Customer offering attractive terms on 3-year lease for a capesize carrier • Would require purchase of new carrier since existing fleet does not fulfill customer needs • Should it be purchased? Industry Dynamics • Revenue Drivers • Outlook in the: –
Premium Generally Accepted Accounting Principles Net present value Cash flow
(a) Statement of Problem. Ocean Carriers is evaluating a proposed three year lease of a ship. Currently‚ no ships in Ocean Carrier’s fleet meet the requirements of the customer. Since the new ship requires an investment of $39 million‚ Mary Linn‚ the Vice President of Finance for Ocean Carriers‚ needs to evaluate the proposal’s NPV and determine whether or not to accept the proposal by considering expected cash flows‚ tax implications‚ and future market conditions. (b) Statement
Premium Supply and demand
associated with managing in a business with high fixed costs like airlines? To understand the challenges firms face with regard to high fixed costs we must first have a basic understanding. A fixed cost is a routine cost the company incurs despite production‚ and changes in volume. It is a cost that must be paid routinely‚ but the amount of the expense may vary. Firms with high fixed costs must have complete understanding of what fixed costs exist that will be incurred‚ and how much revenue they
Premium Airline Avianca Flight attendant
ACADEMIC PURPOSES LE 4000 LOW-COST FLAT HOUSING DESIGN SCHEME BY: AHMAD HANIEF B. SHAMSUDIN 0535017 KULLIYYAH OF ARCHITECTURE & ENVIRONMENTAL DESIGN (KAED) MDM ROSNANI KASSIM SECTION 23 INTERNATIONAL ISLAMIC UNIVERSITY MALAYSIA (IIUM) 24 MARCH 2009 RUNNING HEAD: LOW-COST FLAT HOUSING DESIGN SCHEME Low-Cost Flat Housing Design Scheme Ahmad Hanief Shamsudin International Islamic University Malaysia (IIUM) Abstract The low-cost housing has become a significant
Premium Public housing Affordable housing House