Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Can you answer urgently Below table shows a financial model of a five year old Panamax vessel (USD millions) 5 year old Panamax 1 2

image text in transcribed

Can you answer urgently

Below table shows a financial model of a five year old Panamax vessel (USD millions) 5 year old Panamax 1 2 3 4 5 0 -$27.0 4.6 4.4 4.6 -2.4 -2.4 -2.5 0.0 -0.3 0.0 2.2 1.7 2.0 4.6 -2.6 0.0 2.0 4.6 -2.7 0.0 1.9 Ship investment cash-flow for Year Ship purchase price Charter income Operating expense Dry docking/special survey Ship operating cash flow Drawdown of debt Loan interest payments Loan repayments Repayment of debt on sale Residual value (ship sale) Net cash-flow Discount factor 20.0% PV of cash flows 13.5 -0.6 -0.6 -0.5 -0.7 -0.7 -0.7 0.0 0.0 0.0 0.0 0.0 0.0 -13.5 0.9 0.4 0.8 1.00 1.20 1.44 1.73 -13.50 0.74 0.28 0.47 19.0% -0.53 -0.5 -0.7 0.0 0.0 0.8 2.07 0.37 -0.5 -0.7 -10.1 37.0 27.7 2.49 11.11 IRR NPV a) Would you invest in this vessel? (5 points) b) Considering the Internal Rate of Return (IRR) is 19 %, would you invest in the vessel, if the discount factor were 19.5 %? (5 points). c) If the discount factor were 15 %, would you invest in the vessel? (5 points)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Computational Finance And Its Applications

Authors: C. A. Brebbia, M. Costantino

1st Edition

1853127094, 978-1853127090

More Books

Students also viewed these Finance questions