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Topic: Miscellaneous
Number of pages / Number of words: 5 / 1329
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Since we don?¦t believe the vessel will have a salvage value, we did not include a possible sale in year 26 at the end of the vessels life with Ocean Carriers. Appendix A shows our analysis included the change in net working capital. We assumed the initial outlay of networking capital would take place in year 1, just prior to taking possession of the ship...


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We assumed the initial outlay of networking capital would take place in year 1, just prior to taking possession of the ship. All net working capital will be liquidated in year 26, as explained in the case guidelines. Free cash flows were calculated and using a recommended discount rate of 9%, we found the net present value of the ship to be -$4,644,969...


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