Calculations Of Ocean Carrier Case Study

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    Ocean Park Case Study

    OP issue & Challenges -Ocean Park was an old and tired brand and no one knew what it stood for. -HK has few scenic endowments hence need to create own attraction which take long time and high investment -Econ dwntn(1997) & SARs(2003) strike in Asia,fell by70%attendance,threat to close down. External environment analysis- PEST Factors Political -in 2009, the Govt of HK tourism board(HKTB) introduce removal of the quota of the Hong Kong Tour Group Scheme of Mainland tourists in 2002 -implementation

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    Analysis on the Case of Untouchable Water Carrier

    INTRODUCTION The case of the “Untouchable Water Carrier” to the best of my knowledge can be viewed as dealing with human resources management and organizational issues surrounding two categories of relationship: Employees and Traditional customs. It also deals with the constraints that traditional social structures and relationships place on hiring and promotion decisions. After reading through the cases stated in this article, I have decided to analyze the article according to paragraphs as they

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    Ocean Carrier

    Marriott’s financial strategy is consistent with its high growth objective. Q2. To calculate the weighted average cost of capital for Marriott, the cost of debt and cost of equity should firstly be calculated respectively. The data needed for calculation are listed in Table1, and the choice we make will be further discussed. Marriott | rf | rD | rD prem | Risk prem | βD | | 4.58% | 10.25% | 1.3% | 7.43% | 0.175 | | Unleveraged | β1 | Current D/V | Current E/V | βD | Tax rate | βA

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    Ocean Carriers Case and Assumptions

    tcarroll@depaul.edu Case Study Questions Capital Budgeting In Practice Ocean Carriers These questions relate to the Ocean Carriers case in your course packet. You can find the data for this case on the course website in a spreadsheet named: Ocean Carriers Exhibits.xls. This case provides the opportunity to make a capital budgeting decision by using discounted cash flow analysis to make an investment and corporate policy decision. Ocean Carriers is a shipping company evaluating

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    Case Study

    Butler Lumber Case Management Accounting Case (1) Financial Planning: Butler Lumber Valuation 1. Although Mr Butler has seen an increase in his sales for the last few years, there are a few reasons why he needed a loan from the bank to keep his operations going.       1) Shortage of Cash: Despite good profits, Mr. Butler had experienced a shortage of cash from 1988 to 1990. During this period of time, there was a decrease in cash reserves, as well as in inventory turnover, indicating that

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    Oceans Case

    Case 1.1 1) Five procedures an auditor should perform in determining whether to accept a client are an independence check, checking management integrity, the nature of disagreements, communication with previous auditor, and reason for auditor change. Communicating with the previous auditor, evaluating management integrity and the independence check are required by the auditing standards. 3) The following non-financial should be considered before accepting Ocean as a client are a high auditor

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    Ocean Carriers

    supply of capesizes by 11% and 5.4%, respectively. Furthermore the worldwide capesize fleet is relatively young – only 8 capesizes are at least 20 years old – there should be relatively few scrappings. For example Exhibit 5 of the Ocean Carriers case study shows the direct correlation between the number of shipments of iron ore and the average daily spot rate. From 1995-1996, the average spot rate fell from $20,149 to $11,730 and from 1997-1999, the average spot rate fell from $14,794 to $9

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    Ocean Carriers

    Ocean Carriers Case Study Q1. a). we expect the daily spot hire rates to decrease in 2001 and 2002 according to the forecast in exhibit 5. This decline in daily spot rates is also supported by the forecast in Exhibit 3 showing a decline in ordering bulk capsizes from 63 in 2001 to 33 in 2002. Spot hire rates tend to fluctuate depending on the highs and lows trading volumes in the market. So since according to the forecast the demand for Iron ore had a poor market outlook in 2001, the spot hire

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    Business Case Continental Carriers

    under your skin. I dare say a good many rabbits would have kept quiet and thought about keeping on the right side of the Chief, but I'm afraid I'm not much good at that. I told him that the Owsla's privileges didn't mean all that much to me in any case and that a strong rabbit could always do just as well by leaving the warren. He told me not to be impulsive and think it over, but I shan't stay. Lettuce-stealing isn't my idea of a jolly life, nor sentry duty in the burrow. I'm in a fine temper, I

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    Ocean Carriers

    tcarroll@depaul.edu Case Study Questions Capital Budgeting In Practice Ocean Carriers These questions relate to the Ocean Carriers case in your course packet. You can find the data for this case on the course website in a spreadsheet named: Ocean Carriers Exhibits.xls. This case provides the opportunity to make a capital budgeting decision by using discounted cash flow analysis to make an investment and corporate policy decision. Ocean Carriers is a shipping company evaluating

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    Ocean Carrier

    Analysis In order to make a recommendation to Mary Linn as to whether Ocean Carriers, Inc. should purchase a new ship we must first look at the net present value of the ship. In order to do this our team used the provided expected daily hire rates to calculate revenue which we expect to be for the lifetime of this vessel. The expected daily hire rate is the most accurate measure to determine future cash flows for the company. By using the annual operating days over the life of the new vessel we

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    Ocean Manufacturing Case Solutions

    Acct 4080 Ocean Manufacturing Case 1. 1) Obtain and review financial information about the prospective client: annual reports, interim statements, registrations statements, Form 10-k’s, and reports to regulatory agencies. 2) Detailed criminal background checks of senior managers. 3) Evaluate the public accounting firm’s independence with regard to prospective clients. 4) Inquire of the prospective clients’ bankers, legal counsel, underwriters, analysts, or other persons who do business with

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    Case Study: Taxation Calculation

    year. Answer: Income in terms of sales: The income for the year would be determined on an accruals basis. The related cases could be Carden’s case, Barratt & Ors v FCT, and J Rowe and Son Pty Ltd v FCT. In Carden’s case, it claims that professional income derived by a sole proprietor should be returned for tax purposes on a cash accounting basis. However, in this case, Books Galore Pty Ltd is a company with a large factory and approximately 20 staff instead of a sole proprietor. Thus, Barratt

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    Ocean Carriers

    Memo OCEAN CARRIERS Date: January 2, 2001 To: Mary Linn, Vice President of Finance From: Thomas Harper Subject: Investment in New Capesize Bulk Ship After analyzing the commissioning of a new capsize ship for a three-year lease, my team has come to the conclusion that Ocean Carriers should move forward with the investment only if it is built and registered in our Hong Kong office. There were key assumption my team and I made in our analysis and they are as follows:

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    Buttons - Case Study 1

    Pierre Kitts | Integrated Logistics Case Study 1 | March 2, 2014 Case Study 1 – Buttons Limited Canadian Distribution System Contents Executive Summary 1 Introduction 4 Initial Stocking of Stores 6 Figure 1 - Average Transit Time by Ocean Container from Manufacturing Plants to Canadian Stores 8 Figure 2 – Initial Stocking of Stores via 40 FT Ocean Containers to DC’s. 9 Full Distribution System Buttons Canada 10 Figure 3 - Average Transit Time by Consolidated Air from Manufacturing Plants

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    Ocean Carriers

    Ocean Carriers Inc. was approached in January of 2001 with a contract proposal for the leasing of one of their ships for a term of 3 years beginning in 2003. Ocean Carriers currently has no ship to accommodate the customer. To commission the construction of a new vessel would take 2 years from start to completion. The average rate in the spot market is $22,000 per day. Ocean Carriers deployed a younger fleet than average carriers and generally earned a 15% premium over the average daily rate

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    Ocean Carriers

    Ocean carriers has been approached by a customer who is offering attractive terms for a three year ship lease. However, there is no existing ship that meets the customer’s needs, so Mary Linn, Vice President of Finance, must decide if we should purchase a new ship that will meet the customer’s demands for $39 million. Since the lease is only for three years we need to analyze if by continuing to operate the ship for other charterers will be a profitable project for Ocean Carriers. It is the company’s

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    Continental Carriers Inc. Case Analysis

    Continental Carriers, Inc Continental Carriers, Inc is a regulated general commodities motor carrier who had shipping routes up and down the Pacific Coast and to parts of the Midwest. They sought to acquire Midland Freight, Inc to expand its operations and were deliberating about which method to finance the acquisition. The purchase of Midland Freight, Inc would cost $50 million in cash. CCI would gain $8.4 million to its earnings before interest and tax. There were three options that the

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    Ocean Carriers

    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

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    Ocean Carriers

    Case2 Ocean Carrier Question 1 Daily spot hire rates seems to have a linear relationship with both charter rates and iron ore shipments. If iron ore shipments increase, so do the charter rates for the capsize dry bulk ships. Traditionally, when charter rates rise, spot hire rates will increase even higher than charter rates. A regression analysis, shown in table 1, was used to forecast future iron ore shipments. The estimated shipments for 2002

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    Ocean Carriers Q&a

    Question 1 Assume that Ocean Carriers uses a 9% discount rate. Do you expect daily spot hire rates to increase or decrease next year? Daily hire rates were determined by supply and demand, the expected number of ships available percentage increase (supply side) more than the percentage increase of demand for bulk capsizes ( demand side) , therefore daily spot hire rates is expected decrease in next year ( year 2002). For demand side: As per Exhibit 6, forecasted demand in year 2002

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    Oceans

    the case of Ocean Carriers, protagonist Mary Linn must decide upon the best alternative regarding the building of a capesize carrier that a client has requested. Her choices in the matter include: 1) Building the ship and salvaging it after 15 years for a $5 million profit 2) Building the ship and keeping it in operation for its full 25 year operating life 3) Denying the request and not building the ship at all. Through my research I’ve found that the best decision for Mary Linn and Ocean Carriers

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    Case 1.1: Ocean Manufacturing, Inc.

    Case 1.1: Ocean Manufacturing, Inc. 1. Identify five procedures an auditor should perform in determining whether to accept a client. Which of these five are required by auditing standards? (check slides) - Obtain and review available financial information - Inquire of third parties about integrity of prospective client and its management - Consider circumstances that require special attention, unusual business or audit risks - Consider the technical competency of potential audit staff and

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    Ocean Carriers

    Ocean Carriers: Case Study MBA 540 Fall 204 Janelle Roche King Quaidoo Suzanne Ekstrom Net Present Value: 15 Year Evaluation if the United States with a 35% Taxation Net present value is used in order to determine the present value of an investment by the discounted sum of all cash flows received from a project. In this case this would be the calculation of the single project capital budgeting for Ocean Carriers Inc. and a purchase of 15 year operation vessel. This 15 year time span would begin

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    Ocean Carriers

    Case Ocean Carriers Investment calculations If we make calculations assuming that Ocean Carriers is a U.S. firm subject to 35% taxation, net present value for the 39 million dollar investment is approximately -5,55 million dollars. Therefore on the basis of my calculation, the investment appears to be unprofitable. Obviously the conditions are far better if Ocean Carrier resides in Hong Kong and does not pay taxes for its overseas profits. In that scenario the investment has approximately net

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    Ocean Manufacturing Case 1.1

    to be a part of an IPO. Ocean has a favorable market position and good growth potential. The client has some issues with the accounting system, some questionable activity in regards to high auditor turnover, and high management turnover but no client is perfect. The accounting firm will have to take all these things into consideration and ensure the risk the client poses will be acceptable in regards to the risk the firm currently has with clients retained. Ocean has some areas of opportunity

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    Case Ocean Carriers

    39000000 1291200 Pinja Ruonala 241364 Case Ocean Carriers Since the consulting firm fee (200 000 USD) and internal marketing study expenses (150 000 USD) already occurred and thus are sunk costs, they are not taken into account in the investment calculations. Those expenses will realize, no matter whether the investment will be done or not, so they are not relevant. Net present value calculation was done in order to give a recommendation for Ocean Carriers whether to purchase of the $39M capsize

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    Ocean Carriers

    ,同相船約期與致大動波跌漲的船貨現知得們我,格價均平的船約期與船貨現期長察觀五表據根 。 價折的 均平業 產於低 收吸須 必輪貨 舊老, 格價的 金租日 響影會 也齡船 的輪運 貨,外 此 。面給供節調來船舊廢報是或船新製訂,求需場市據根會司公運航。況狀濟經球全於決取要主度 強求 需 此 因 ,料 物原 之 需 所業 產 礎 基 等 炭煤 及砂 礦 鐵 載裝 輪 貨 裝 散 的 於 由 ,說 來 船 約 期 對 析分場 市船貨 現 翔偵黃 傑 淞張 修振 黃 玲美徐 慧 淑吳 義正 林 85% : Case 2 Ocean Carriers 33 = 643 ( 63 噸 公萬百 2002 612 + (612 − 552) × 2000 440 552 2001E 436 612 5.14% 2002E 445 643 2001~2002 2.06% 5.14% ) 2.06% 於由 。 。 一題問 (降下 是應率 費金租日 船貨現 的年 期預們 我此因 ,求需 於大給 供 ) 了長 成只面 求需但 , 了長 成面給 供的運 貨裝散

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    Ocean Carriers

    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: 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

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    Ocean Carriers

          Financial Management  CASE STUDY 2:  OCEAN CARRIERS  April 20, 2015  Emily Chen (Ro4749035) / Naree Klungpremchitt (R03749057)  Christopher Loo (Ro3749038) / Julien Minard (Ro3749036  Q1: What Factors Drive Average Daily Spot Hire Rates? Average daily spot hire rates are influenced by supply and demand of the vessels. Demand of vessels was determined by market condition. There will be an increase in demand for iron and coal, so as capesize fleets when there is strong economy

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    Continental Carriers Inc. Case Analysis

    place to another, from manufacturer or customer to another customer. The only potential threat that exists is customers opting to send documents electronically. Current competitors offer similar services such as courier means via air, ground, and ocean. Technological developments such as 3D printers and iCloud are possible substitution methods. However, they are not enough to fully substitute the delivery of actual solid and physical goods or items. * The Bargaining Power of the Supplier

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    Oceans Carrier

    Ocean Carriers Ocean Carriers Inc. was approached in January of 2001 with a contract proposal for the leasing of one of their ships for a term of 3 years beginning in 2003. Ocean Carriers currently has no ship to accommodate the customer. To commission the construction of a new vessel would take 2 years from start to completion. The average rate in the spot market is $22,000 per day. Ocean Carriers deployed a younger fleet than average carriers and generally earned a 15% premium over the average

    Words: 1432 - Pages: 6

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    Ocean Manufacturing, Inc Case

    From: Date: July 2, 2015 Subject: Audit Engagement Acceptance of Ocean Manufacturing, Inc. I am writing this you this memorandum to inform you of my recommendation as to whether to accept the audit engagement of Ocean Manufacturing, Inc. or decline. The discussion below talks about the use of client acceptance factors significant in arriving at my conclusion. It is my recommendation to not accept Ocean Manufacturing, Inc. (Ocean) as an audit client based on the significant client acceptance factors

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    Amazon Case Study

    ACE Challenge 2015 Amazon Confidential Preliminary Round: ACE Case Breakers Case Study: Operations Introduction It is a bright autumn morning in 2205 and Gaurav Maurya, SVP – Amazon Enceladus1, is gazing outside the window and reminiscing about how Blue Origin2 had transformed Enceladus into a bustling human colony in a short span of 50 years, much like some of the developing countries back on Earth. Also, continuing Amazon’s legacy, Amazon.en has become Enceladus’s most customer-centric

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    Ocean Carriers

    Michael Depersia Ocean Carriers needs to evaluate the decision to commission a new capesize carrier. Mary Linn, Vice President of Finance, needs to decide if this is a profitable decision for the company. In determining whether Ocean Carriers should purchase the new capesize carrier for the potential customer, we completed a net present value analysis of the project. In order to do this we need to take many things into account including, but not limited to, depreciation, opportunity costs and networking

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    Ocean Carrier Case Solution, Harvard Business Case

    Ocean Carriers November 2015 EXECUTIVE SUMMARY Due to an attractive lease agreement proposed by a larger client, the investment department has conducted an extensive evaluation of the possibility to invest in a new $39 million capesize carrier. This material should be distributed

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    Ocean Manuf Case Study

    Ocean Manufacturing Case Solutions Acct 4080 Ocean Manufacturing Case 1. 1) Obtain and review financial information about the prospective client: annual reports, interim statements, registrations statements, Form 10-k’s, and reports to regulatory agencies. 2) Detailed criminal background checks of senior managers. 3) Evaluate the public accounting firm’s independence with regard to prospective clients. 4) Inquire of the prospective clients’ bankers, legal counsel, underwriters, analysts

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    Ocean Carriers

    Case 1 – Ocean Carriers Kevin Gordon 2543984, Camiel Hamstra, & Marloes Schrijer 2518578 Ocean Carriers is a shipping company with offices in New York and Hong Kong. In 2001, Vice President of Finance, Mary Linn, has to decide whether Ocean Carriers should commission a new capesize carrier to meet the specific requirements of a customer. The proposed contract, however, is only for three years. Linn needs to decide if the considerable investment in a new ship is worth it, given the future

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    Case Ocean Carriers

    Case 1: Ocean Carriers   Our first case study is entitled Ocean Carriers (HBS Case No. 9‐202‐027) by Erik Stafford et al. Please go to the Harvard Business Publishing website http://hbsp.harvard.edu . The case is copyright‐protected and can be purchased after registration. Please register at the Harvard Business Publishing website with a student account. After login, make use of the following link: http://cb.hbsp.harvard.edu/cbmp/access/42497623. Integrate answers/discussions to the

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    Case Study

    Research in Transportation Business & Management 10 (2014) 40–44 Contents lists available at ScienceDirect Research in Transportation Business & Management Transferring low-cost marketing practices from air to rail services: The Ouigo case Paul Chiambaretto a,b, Anne-Sophie Fernandez c a b c MRM-Groupe Sup de Co Montpellier Business School, 2300 Avenue des Moulins, 34080 Montpellier, France Ecole Polytechnique, PREG-CRG, Bat. Ensta, 828 Boulevard des Maréchaux, 91762 Palaiseau,

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    Ocean Manufacturing Case

    information about the entity and its management.5) Consider the need for individuals possessing special skills or knowledge to complete the audit (e.g., IT auditor, valuations specialist, industry specialist)2.   Overall, after calculating a few of Ocean Manufacturing ratios and comparing them with the industry, the company’s figures are not performing up to others in the industry.   ROE = NI/Stockholder Equity (2011,2010)= 8.9% and 7.1%ROA = NI/Assets= 4.5% . 3.8%Both return on equity and assets are

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    The Beach Carrier Case Analysis

    Matthew Beringer ELE 3010 Parnell February 21, 2016 The Beach Carrier 1. What is the nature of the product? What are its strengths and weaknesses? The Beach Carrier is a bag that is large enough to carry all the items that one needs for a day at the beach. It is large enough to carry a beach chair, but when empty, it can be folded down to 12x12 square inch for easy and convenient storage. The strengths of the product are that is more affordable than the competitor’s products and the

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    Ocean Carriers

    shipment, fleet size and average spot rate  Should Ms. Linn purchase the $39M capsize? Hong Kong or the U.S? (Ocean Carriers uses a 9% discount rate.) To analyze these two scenarios, we choose to calculate net cash flow and IRR for every year. The detail calculation is attached in the appendix and the methodology of this approach is enlisted as below. Formula for NPV, IRR calculation 1. Gross operating revenue = Expected daily hire rate X Number of days operating 2. EBIT = Gross operating

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    Ocean Carriers

    structural – of specific factors in some cases remains open to discussion. Whilst caution is necessary in asserting that we have entered a new period of strong market prices after two decades of price decreases, it is becoming increasingly clear that structural factors like the growth in global food demand can be reasonably expected to maintain prices at sustained levels over the medium-term, though substantially below the most recent price hikes (except in the case of maize). The outlook part of the report

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    Ocean Carriers

    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

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    Ocean Carrier

    Ocean Carriers According to Exhibit 3, the number of vessels is set to increase from 2001 to 2004. The iron ore shipment imports stay relatively the same amount, so we expect the daily spot rates to decrease over the next few years. The daily hire rates are driven by supply and demand. The historical changes in these rates have been related to the change of the bulk shipments. The supply is equal to the currents vessels plus new ships minus scrapings. Demand for dry bulk capesize is determined

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    Ocean Carriers

    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

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    Ocean Carriers

    Ocean Carriers’ Case Spring 2012 Ocean Carriers Ocean Carriers Inc. owned and operated capsized dry bulk carriers that carried iron ore worldwide. The company’s vessels were typically chartered on a “time charter” basis for a period of years. The charterer paid Oceans Carriers a daily hire rate for the entire length of the contract, determined what cargo the vessel carries, and controlled where the vessel loaded and unloaded. Ocean Carriers supplied a vessel that complied

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    Ocean Carriers

    Case 1: Ocean Carriers We think that daily spot hire rate will likely decrease next year. There are two reasons. First, there are 63 new vessels scheduled for delivery in 2001 to increase the supply of vessel and only few old vessels need to be retired, while the demand will not increase because imports of iron ore and coal would remain stagnant over next two years. Second, exhibit 5 shows that avg. spot rate of 2000 was higher than the rate of previous years and avg. 3-yr charter rate. In addition

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    Ocean

    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,

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