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Case Ocean Carriers

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Case 1: Ocean Carriers

Our first case study is entitled Ocean Carriers (HBS Case No. 9‐202‐027) by Erik Stafford et al. Please go to the Harvard Business Publishing website http://hbsp.harvard.edu .
The case is copyright‐protected and can be purchased after registration. Please register at the Harvard Business Publishing website with a student account. After login, make use of the following link: https://cb.hbsp.harvard.edu/cbmp/access/42497623.
Integrate answers/discussions to the following questions into your memo (Please don’t write separate answers for each question, and also the order when you answer them is not relevant. Your memo should consist of one comprehensive and well‐structured text.) Assume that Ocean Carriers uses a 9% discount rate for its investments. Questions:
1. Do you expect daily spot hire rates to increase or decrease next year?
2. What factors drive average daily hire rates?
3. How would you characterize the long‐term prospects of the capesize dry bulk industry? 4. Should Ms Linn purchase the $39M capesize? Make 2 different assumptions. First, assume that Ocean Carriers is a U.S. firm subject to 35% taxation. Second, assume that Ocean Carriers is located in Hong Kong, where owners of Hong Kong ships are not required to pay any tax on profits made overseas and are also exempted from paying any tax on profit made on cargo uplifted from Hong Kong.
5. What do you think of the company’s policy of not operating ships over 15 years
old?...

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