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
Posted: Tue Apr 12, 2022 10:54 am
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?
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?