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
OCEAN CARRIERS ANALYSIS DATE: 8/29/2007 TO: MS MARY LINN CC: PROF. TOM MILLER FROM: RYAN DALE SEELKE RE: DECISION ON CAPE SIZE CARRIER PRIORITY: [URGENT] Ms Mary Linn‚ After careful cash flow analysis and a discount rate (WACC) of 9%‚ commissioning a capsize carrier for 25 years is the only appropriate option for our firm. However‚ if the discount were instead 10%‚ both options would fail the NPV test by yielding negative results. I make this recommendation after thorough analysis of
Premium Cash flow Net present value Weighted average cost of capital
Introduction We focus on SMRT Corporation Ltd (SMRT) and SBS Transit Ltd (SBS). The market for their common equity (E)‚ debt (D) and preferred stock (PS) are summarized here: | |E (SGD$) |D (SGD$) |PS (SGD$) |D/(D+E+PS) |E/(D+E+PS) |PS/(D+E+PS) | |SMRT |309.8M[1] |472.3M |0 |60.39% |39.61% |0 | |SBS |649
Premium
Continental Airlines Inc. Analysis Strategic Management Vision Statement Continental Airlines Inc. seeks to lead its industry in superior customer service‚ innovative technology‚ employee satisfaction‚ and environmental advances‚ at home and abroad. Mission Statement At Continental Airlines Inc.‚ we strive to obtain excellent customer service and satisfaction through technological advances in on-line bookings and e-ticket purchases. We have strict security measures to ensure our
Premium Airline Lufthansa Los Angeles International Airport
A Note on Valuation Models: CCFs vs. APV vs WACC Fabrice Bienfait Table of Content Introduction..................................................................................................................................... 2 Enterprise Valuation ....................................................................................................................... 2 The Weighted Average Cost of Capital Approach ......................................................................... 2 The
Premium Discounted cash flow Generally Accepted Accounting Principles Weighted average cost of capital
Financial Management Agenda 1. What is the WACC and why is it important to estimate a firm’s cost of capital? Do you agree with Joanna Cohen’s WACC calculation? Why or why not? 2. If you do not agree with Cohen’s analysis‚ calculate your own WACC for Nike and justify your assumptions. 3. Calculate the costs of equity using CAPM‚ the dividend discount model‚ and the earnings capitalization ratio. What are the advantages and disadvantages of each method? 4. What should Kimi Ford recommend regarding
Premium Arithmetic mean Weighted average cost of capital Average
“Life as a Continental Soldier” History 1301 Professor Ball Kevin Guevara Kevin Guevara History 1301 Professor Ball 29 June 2014 Life as a Continental Soldier As a soldier in the Continental Army‚ it was a harsh and unforgettable life and time for them. People from different aspects of life would volunteer to help out in the war‚ but they did not know what they were getting themselves into. Many soldiers would eventually die not only in battle‚ but by the terrible condition of the camps
Premium American Revolutionary War Continental Army George Washington
companies (Wit‚ 2012). What measure of central tendency did the authors report? What are the potential issues with each measure of central tendency? Do you agree with the author’s choice? Explain. As explained in the second paper many low cost carriers (LCCs) continue to enjoy rapid growth and still have a fair number of new aircraft on order recently. There are signs however that the market for LCCs is limited‚ owing to increasing route density problems‚ primarily in Europe but seemingly also
Premium Low-cost carrier Qualitative research Research
Overview Our economy emerged from the recession back in 2009; however‚ the economy didn’t grow much since then. According to the Bureau of Economic Analysis‚ gross domestic product (GDP) for the first quarter of 2011 grew only 0.4 percent while the second quarter grew at 1.3 percent. The increase in the second quarter can be attributed to a decrease in imports of petroleum‚ auto‚ and engines due to the earthquake in Japan‚ an increase in federal spending for national defense‚ and increase in business
Free Federal Reserve System Monetary policy United States
Marriot Case Marriot use the Weighted Average Cost of Capital to estimate the cost of capital for the corporation as a whole and for each division‚ and the hurdle rate is updated annually.(WACC = (1-Tc) * (D/A) * R[D] + (E/A) * R[E]) Marriot’s Tax Bracket = 175.9/398.9 = 44% Division’s asset weight to the corporation: Lodging = 2777.4/4582.7 = 0.59 Contract = 1237.7/4582.7 = 0.28 Restaurant = 567.6/4582.7 = 0.13 Risk free rate is 30 years T-Bond = 8.95% (Lodging use long-term debt)
Premium Weighted average cost of capital Economics Finance