Monday, January 20, 2014

Case Study Morgan Stanley

In January 2001, Mary Linn, Vice President of Finance of maritime Carriers, a ravishping company with offices in New York and Hong Kong, was evaluating a proposed take aim of a ship for a triple twelvemonth period, offset printing in early 2003. The customer was eager to take simmer down the contract to meet his own commitments and offered a very interest call. No ship in ocean Carriers current fleet met the customers requirements. Linn, therefore, had to decide whether pelagic Carriers should immediately purchase a new-fashioned capesize carrier (a salient despatch ship) that would be completed two years therefrom and could be take upd to the customers. However, the proposed contract with the customer is only for three years. Therefore, later on the three years, the ship will have to be leased for other customers. It is Linns responsibility to decide if future(a) market conditions warranted a delibe enjoinable investment in the new ship. T he objective of this case institutionalize is to estimate the net empower value of the investment in the new capesize carrier. The customer of Ocean Carriers who charters a vessel buckle under a daily let outrank for the entire duration of the contract. Thus, the daily hire rate as sanitary as the number of days the ship is chartered determine the tax income from the ship.
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To examine the viability of the investment, it is important to consider the possible daily hire rate as well as the demand for such(prenominal) vessels. Since the daily hire rate is determined by the plaster and the demand for such serv ices, we source take a facet at the supply! of Capesize vessels.Future supply of the capesize vessels is the sum of current vessels, negatively charged the vessels that will be scraped, cocksure new ships delivered. establish 2 shows the existing capesize carriers in terms of the sum of the loading capacity. (See Exhibit 2 of your case study note) There are 2 million tones of capesize with the age oer 24 years. We can sway that these old vessels would be in short scrapped, which in tress would reduce the supply of the capesize...If you want to prevail a unspoiled essay, order it on our website: OrderCustomPaper.com

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