Introduction Continental Carriers Inc is a trucking company which specialises in transporting general commodities. Since its establishment in 1952 the company operates within the district of the Pacific Coast and from Chicago to various points in Texas. It was noted that the company maintains an overall low debt policy‚ whereby they obtain infrequent short term loans and avoid long term debt. Furthermore with the appointment of Mr. Evans as president‚ the company became more profitable and experienced
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Continental Carriers‚ Inc. Advanced Financial Management Continental Carriers‚ Inc. (CCI) should take on the long-term debt to finance the acquisition of Midland Freight‚ Inc. for a few reasons. The company is heavy on assets‚ the debt ratio will only grow to 0.40 with the added $50M in debt. Also‚ the firm will benefit from an added $2M in a tax shield and be able to return $12.7M a year to its stockholders and investors‚ instead of $8.9M if equity is raised to finance the acquisition
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I. Statement of Financial Problem Should Continental Carriers‚ Inc. use debt or equity to finance the acquisition of Midland Freight in 1988‚ either by selling $50 million in bonds at a 10% interest rate to a California insurance company with a maturity of 15 years‚ or by issuing 3 million in common stock at $17.75 per share with a dividend rate of $1.50 per share? II. Financial Framework The outcomes of various financial alternatives can be examined through an EPS-EBIT analysis‚ where EPS
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Company Overview Continental Carriers is a general commodity motor carrier and has been since 1952‚ and they recently experienced successful growth since Mr. Evans focused on improving service‚ as well as an extensive marketing effort to boost their revenues in their already existing routes. He also implemented a way to reduce costs through computerization of operations as well as an improvement in terminal facilities to improve the company’s structure. This has since made CCI become a much larger
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Case Study: ‘Ocean Carriers’ By: Alyssa Linder Wenliang Zhang Xhangoli‚ Eva 1. Daily spot hire rates are determined according to supply and demand of the shipping capacity. According to the article‚ the supply of ships available equals the number of ships currently in the fleet plus any new ships added‚ minus any scrapings and sinking. According to Exhibit 2‚ there are a limited number of ships older than 24 years which are likely to be scraped. For those ships under the age group
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Group 21 0. Introduction The following case study is based on the attached excel sheet‚ which has been set up in a dynamic approach. This means that the four underlying scenarios (25 years with and without tax and 15 years with and without tax) are linked to separate sheets‚ which enables the user of the model to calculate the net present value (NPV) for the different scenarios with ease. This is why we refrain from explaining every single step of the underlying calculation. In order to get
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Case Analysis: Sub-Continental Telecommunications Solution Problem Identification World Wide Telecommunications (WWT) attempted a joint venture with an Indian firm‚ a Subcontinental Software Solutions (SSS). This joint venture (JV) caused several symptoms; equipment difficulties‚ a sexual harassment‚ revised budget‚ and an intellectual property stealing. The problem was the failure of risk management and it resulted in the delays in finishing the software. The initial symptom of the delays
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(1649649) – Class 17; Giorgi Kolbaia – (1651397) – Class 17; Luca Beisans – (1675347) – Class 17; Maxence de Poulpiquet – (1646504) – Class 17 Executive Summary Given the current and expected market conditions‚ the financial department of the Ocean Carriers Group is to evaluate the potential revenues and expenses of commissioning a new capsize ship for cargo transportation in order to meet a received demand for lease. A recommended approach would consist in analyzing the expectations for the world economy
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“Ocean Carriers” case Assume that Ocean Carriers uses a 9% discount rate. 1) Do you expect daily spot hire rates to increase or decrease next year? (5 points) 2) What factors drive daily hire rates? (5 points) 3) How would you characterize the long-term prospects of the capesize dry bulk industry? (10 points) 4) Should Ms Linn purchase the $39M capsize? Make 2 different assumptions. First‚ assume that Ocean Carriers is a US firm subject to 35% taxation. Second‚ assume that
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OCEAN CARRIERS CASE 1) Should Ls Linn purchase the $39M capsize? Make two different assumptions. First‚ assume that Ocean Carriers is a U.S. firm subject to a 35% statutory (and effective) marginal tax rate. Second‚ assume that Ocean Carriers is domiciled in Hong Kong for tax purposes‚ where ship owners are not required to pay any tax on profits made overseas and are also exempted from paying any tax on profit made on cargo uplifted from Hong Kong‚ i.e.‚ assume a zero tax rate. The
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