Ocean Carriers Case Study Discussion
Autor: Sara17 • November 2, 2018 • 1,755 Words (8 Pages) • 620 Views
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We took the expected daily hire rate from the Ocean Carriers case Exhibit 6 Forecasted Daily Time Charter Rates for New Capesize Vessel, daily operating costs from the Ship Operations section, and the operating days every year by deducting the allotted maintenance time from 365 days (366 days for leap year). We thus deduced the yearly EBITDA by revenue deducting operating costs.
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During the process of calculating EBIT, we noted that here the depreciation concluded both the depreciation of the ship itself, which would be $39 million depreciated on a straight-line basis over 25 years, and also the depreciation of the special surveys, which would be the value of the special surveys on a straight-line basis over 5 years. Based on specific location of the Ocean Carriers firm, the tax rate would be different as well. On our assumption, the Ocean Carriers firm in U.S. would bear a tax rate of 35%, while in Hong Kong it would enjoy the tax free policy.
Calendar Year
Net working Capital
ΔNWC
2003
500,000
500,000
2004
515,000
15,000
2005
530,450
15,450
2006
546,364
15,914
2007
562,754
16,391
2008
579,637
16,883
2009
597,026
17,389
2010
614,937
17,911
2011
633,385
18,448
2012
652,387
19,002
2013
671,958
19,572
2014
692,117
20,159
2015
712,880
20,764
2016
734,267
21,386
2017
756,295
22,028
Considering the influence of the inflation rate and the initial net working capital, we calculated the change in working capital every year from 2002 to 2017.
Age of Ship
Event Year
Calendar Year
Free Cash Flow
Present Value of FCF
Culmulative NPV
0
2000
-3,900,000
-3,900,000
-3,900,000
1
2001
-3,900,000
-3,577,982
-7,477,982
2
2002
0
0
-7,477,982
1
3
2003
-27,441,200
-21,189,641
-28,667,623
2
4
2004
4,263,508
3,020,377
-25,647,246
3
5
2005
4,260,429
2,768,986
-22,878,260
4
6
2006
3,828,571
2,282,852
-20,595,408
5
7
2007
3,115,267
1,704,157
-18,891,250
6
8
2008
3,392,688
1,702,676
-17,188,575
7
9
2009
3,385,436
1,558,749
-15,629,826
8
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