Ocean Carriers Case Report Executive Summary Ocean Carriers is evaluating a proposed lease for a ship over three years starting in 2003. Currently‚ Ocean Carriers does not have any ships that are available to meet this customer demand. This report will assist VP of Finance Mary Lynn to make a decision on whether or not to commission a new carrier and how long to hold on to this asset. Based off a financial analysis using the data Ocean Carriers has provided‚ the final recommendation is that
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http://www.studymode.com/essays/Ocean-Carriers-133412.html Average daily hire rates are determined by market supply and demand. Factors such as the number of operating vessels‚ number of scrapped vessels per year‚ the age of the ships‚ the efficiency of ships‚ and market expectations of supply and demand; consequently‚ these factors drive average daily hire rates. Market conditions also drive rates since demand is dependent on the world economy. When the economy is strong‚ the demand increases‚
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of only 3 years. Based on the calculations of the costs of construction against the value of the contract‚ it is recommended that Ocean Carriers not go ahead with the construction. However‚ if a strategic alliance can be created with another carrier to lease their vessels‚ Ocean Carriers should accept the contract. If the strategic alliance is mutual‚ Ocean Carriers should build the vessel to add on to its own fleet. Key Financial Issues Mary Linn has to deal with the following key financial issues
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Strategy and Valuation Case Analysis Ocean Carriers March 23‚ 2011 Executive Summary Industry Overview Capesize dry bulk carriers provide shipping services worldwide. Due to their size‚ Capesize carriers must sail around Cape Horn in order to travel between the Atlantic and Pacifica Oceans – the ships are too large to utilize the Panama Canal. In January 2001‚ there were 553 capesize vessels in service throughout the world. Demand for dry bulk carriers is determined by the world
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Ocean Carriers Case Study Submitted by Fozia Abid Maryam Noor Nadia Farooq Umar Farooq Hamza Tariq Muhammad Mohsin Lahore School of Economics Ocean Carriers Report The fragmented shipping industry is one of the most essential industries for continuous globalization and growth; industry prospects are surprisingly stable in contrast to the normal logistics businesses that are highly cyclical. The factors that drive average daily hire rates are the age of vessels‚ market condition‚
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Dongyeon Kim 1408392 Di Roberto Matteo 1681386 Gutiérrez Agustina María Manuela Rinaldi Claudia Valeri Stefano 1672146 Case Study: Ocean Carriers Corporate Finance Class 16 Group Name: Soul Analysts Ltd Executive summary Ocean Carriers is contemplating the opportunity of stipulating a 3-year leasing contract that would require commissioning the construction of a new vessel. In the short term applied hire rates are decreasing‚ just as they should be on the recovery side starting
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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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NPV Analysis. 4 Table 3: Estimation of Resale value of Carrier @15th year 7 1. Introduction 1.1 Executive Summary Ocean Carriers Inc. (OCI) is an International provider of Marine transportation services mainly focussing on Dry Bulk commodities mainly iron ore and coal. OCI has offices located in New York and Hongkong. One of OCI’s customer’s is keen in committing for a 3 year lease starting from 2003 for a large dry bulk Capesize carrier of capacity 180‚000 DWT in order to fulfil its own interests
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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
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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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