Ocean Carrier’s Case Essay

1) Do you expect day-by-day spot con spunke locates to adjoin or decrease next family?According to the fictional character description, break 3 showed order booking and delivery agenda for bulk cap coats for coming years from 2001 to 2004. It was large than the number of current fleet size in Exhibit 2. Thus, the spot rent grade would likely to decrease since turtles argon available.2) What factors drive average quotidian hire rates?Daily hire rate were determined by the supply and the demand. From Exhibit 2, the existing tump overs carriers in terms of the sum of the loading ability. Factors of supply such as age and size of vessel, price of sophisticate and maintenance as well as demand factor such as commercialize condition would affect mundane rates.3) How would you characterize the long-term prospects of the turn over wry bulk industry?According to Case description, availability of fleet in the market and availability of transports good drives average occasion al hire rates. The daily hire rates would increase if ore exports from Australia and India starts in coming years. This would suffer huge business trade. In absence of a young business, the average daily rates allow decrease because of increase number of fleet (demand is change magnitude).There argon about 2 million haemorrhoid of capsize with age over 24 years. We will hope that these honest-to-god vessels would be soon scrapped and this would reduce the supply of the capsize vessels. However, those old vessels were non a large part of the total existing vessels. So we probably will not confab a result that an obviously decreasing in supply because of the scraping of old vessels. In Exhibit3, the current order of new capsize vessels delivered in the coming 4 years. There will be a large supply of new capsize vessels from 2001 to 2003. This will increase the supply of capsize vessel in the future.4) Evaluate the cost of the new capsize and forecast the evaluate cash flows .See OceanCariers4.xls5) Should Ms Linn obtain the $39m capsize? Make 2 different assumptions. First, wear thin that Ocean Carriers is a US firm subject to 35% imposeation. Second, assume that Ocean Carriers is located in Hong Kong, where owners of Hong Kong ships argon notrequired to pay any tax on profits made overseas and are also exempted from paying any tax on profit made on cargo uplifted from Hong Kong.See OceanCarrier5.xls6) What do you think of the companys insurance form _or_ system of government of not operating ships over 15 years old?This is a low-risk policy of company this policy will unbosom the company from uncertainty. At the same time, it will be not able to experience advantage of returns on investment of vessels in the next years. This policy will not give a favorable first moment for investment.