Ocean Carriers Essay

Iron ore and coal imports bequeath most probably accrue the upcoming year With the increasing supply of vessels should result in a market surplus By creating this surplus, prices will be driven down, since we will have limited demand and suppliers competingAverage daily rates, based on historical numbers, have a direct relationship with the number of shipments. just Accept the project if we sell after 25 long time in a tax free environment Reject all of the pursual sell after 15 years in both a tax and tax free environment, also after 25 years with a tax environmentThe longer the wait to sell the break-danceHow Long Should Vessels Operate?The companys current policy is to not operate ships older thus 15 years old If oceanic Carrier operates for 25 years the NPV will be higher then if they operate for 15 years and sell the scrap admixture ($5,368,557 vs. $2,238,411) The beat value of the future cash flows exceeds the value of selling the scrap metal 10 years earlier. Hence the re is greater value direct the vessel for an additional 10 years/Iron and coals demand is expected to increase annually and the charter rates be expected to increase by annually for the life of the vessel. The company whoremaster generate more income if they decide to operate the ship for an additional 10 years.