Ocean Carriers Essay

Iron ore and coal imports will most(prenominal) probably decrease the upcoming year With the increasing supply of vessels should result in a foodstuff surplus By creating this surplus, prices will be driven down, since we will have limited demand and suppliers competing middling daily place, based on historical numbers, have a direct relationship with the number of shipments. except Accept the project if we distribute after 25 years in a tax revenue put out environment Reject all of the following sell after 15 years in two a tax and tax free environment, also after 25 years with a tax environmentThe longer the wait to sell the betterHow Long Should Vessels Operate?The companys trustworthy policy is to not operate ships older then 15 years old If Ocean aircraft carrier operates for 25 years the NPV will be higher then if they operate for 15 years and sell the scrap surface ($5,368,557 vs. $2,238,411) The present value of the future cash flows exceeds the value of selling the scrap metal 10 years earlier. Hence there is greater value operating the vessel for an additional 10 years/Iron and coals demand is expected to increase annually and the charter rates are expected to increase by annually for the life of the vessel. The company can generate much income if they decide to operate the ship for an additional 10 years.