Answer Happy

Practice question Assume that the operating cost of capsize (180KDWT) is about $5,600/day, and the scrapping price is about $9 million. A) If the price of new ship is $97million, and the financing rate is 1%; B) If the price is $20million, and the financing rate is 5%; What is the RFR for each case assume the discount rate is 5% and T=20 ?
T> • If the ship price is A, the financing rate r, the ship lifetime is T years, the operating cost OC, and the discount rate p, and the terminal value V 7, then the RFR, defined as the minimal freight rate that makes the NPV positive, is: T- RFR-OC-M V = 0 (1+p)' (1+p)" where M is the mortgage of each year. • Useful hints: F_1 p)" 1 *(1+p)' ()-1 + t=0 1 1- ' (1 +p' =1+ [1-0-07] = 1 1=0 1- 1+P