Reference no: EM13212715
1. Should Ocean Carriers purchase the carrier? Answer this first for a tax rate of 35%, then for a tax rate of 0%. Assume that if Ocean Carriers goes ahead and purchases the carrier, it will operate the carrier until it is 25 years old and then scrap it.
• Hint: I decided to be nice. Go to the course Blackboard page and download my "How to Get Started" Excel spreadsheet. I set up some rows and columns for you, but you will have to fill in the numbers. You may of course, include additional columns and ignore some of my columns if you wish.
2. The case states that Ocean Carriers plans to scrap or sell the carrier when it is 15 years old. Work out what is preferable for Ocean Carriers, selling the carrier when it is 15 years old,or scrapping it at that age. In this question, assume a tax rate of 0% for all parties involved.
a. What price can the carrier be sold for when it is 15 years old (assume the buyer will have to pay for the Special Survey for 2017)? Assume that the buyer will operate the carrier until it is 25 years old, and then scrap it. Compare the sale price to the scrap value at this time (i.e. when the carrier is 15 years old) and conclude whether selling or scrapping thecarrier when it is 15 years old is preferable for Ocean Carriers.
b. What is the NPV (as of time 0) of all cash flows to Ocean Carriers if it decides to sell the carrier when it is 15 years old? How does it compare to the NPV you calculated in Question 1?
Attachment:- Financecase.docx
|
Determine the required length l
: Determine the required length L of each splice if a factor of safety is 2.75.
|
|
Explain the same conditions of temperature and pressure
: the substance B. Both are liquids at room temperature. Which of the statements are true for these liquids under the same conditions of temperature and pressure?
|
|
What steps could a domestic manufacturer like cummins engine
: If the U.S. dollar were to appreciate substantially, what steps could a domestic manufacturer like Cummins Engine Co of Columbus, Indiana, take in advance to reduce the effect of the exchange rate fluctuation on company profitability
|
|
Draw a schematic of the system
: (a) Draw a schematic of the system and (b) determine if the inventor's claims are true.
|
|
What is the npv of all cash flows to ocean carriers
: What is the NPV of all cash flows to Ocean Carriers if it decides to sell the carrier when it is 15 years old?
|
|
What are the potential weaknesses of the model
: The forecasting staff for the Prizer Corporation has developed a model to predict sales of its air-cushioned-ride snowmobiles. The model specifies that sales S vary jointly with disposable personal income Y and the population between ages 15 and 4..
|
|
Determine the power
: A commercial heat pump has energy in to the system at a rate of 60 kW from a thermal reservoir. If the power input from an electric motor is 15 kW, (a) determine the power (kW) delivered to the office area. (b) Determine the coefficient of perform..
|
|
What is the best point estimate of the population mean
: Recently, a university surveyed recent graduates of the English Department for their starting salaries. Four hundred graduates returned the survey. The average salary was $25,000 with a standard deviation of $2,500. What is the best point estimate..
|
|
Calculate the outlet temperature
: A compressor operating adiabatically is to compress 2.83 m^3/min of air at 29.4C and 102.7 kN/m^2 to 311.6kN/m^2. Calculate the power required if the efficiency of the compressor is 75%. Also, calculate the outlet temperature.
|