One company would like to spend $20 million to build a new ship of 30,000 dwt to be used for time chartering. It is expected that the time chartering rate will be $25000/day. The total commission is 3% of the total revenues. the fixed costs of the ship operation are $1.2 million per year, among which the depreciation is $0.5 million.
Suppose the ship will run for 11 months per year, and it will be used for 20 years. The residual ship value will be $4 million, the benchmark rate of return i=15%.
Q: How much is the NPV for this project? How long is the investment payback period?
One company would like to spend $20 million to build a new ship of 30,000 dwt to be used for time chartering. It is expe
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answerhappygod
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