# Ocean Carriers Harvard Case Solution & Analysis

## Ocean Carriers Case Solution

### Scenario Question 2

Net Present Value of the ship is at the rate of thirty five percent tax. This is calculated on the excel file. The company has operated the ship for its whole life, i.e.-\$14,096,360 and -\$13,555,510, in case the company runs the ship for its life of 15 years and then resells it for 5 million. It could be seen that in both the scenarios; the Net Present Value is negative. In this situation, the company does not require to be attainable to buy the ship. It needs to pay a tax rate of thirty five percent.This calculation is shown in the appendix 1.

### Scenario Question 3

Net Present Value of the ship is at the rate of zero percent tax. This is calculated on the excel file. The company runs the ship for its whole life, i.e.,-\$6,102,167 and -\$8,597,669, in case  the company runs the ship for its life of 15 years and then resells itat 5 million. It could be seen that in both of these scenarios; the Net Present Values are negative. In this manner, it the company requires to be attainable to buy the ship and resell it earlier, i.e. after the life cycle of 15 years. The company needs to pay a tax rate at zero percent. Net Present Value will be more than expected and the calculations of which are shown in the appendix 2.

### Scenario Question 4

In the above scenarios of the machines operating for its whole life and for 15 years of its life, at thirty five percent tax rate and zero percent charge rate, it could be seen that the Net Present Value of dispatch is more largely, on the off chance that the ship is worked for 15 years of its life and after which it is resold at \$ 5 million. Therefore, the company would not reexamine its arrangement of working ships for their lifetime.

### Recommendations

It is perfect investment opportunity for the ocean carriers if Hong Kong gets selected as the company’s headquarter. In the case scenario, there is an absence of taxation procedures and its strategic position is given. This arrangement will be astute for the future operations. The approach does not require working ships for more than 15 long times, which appears to be decently preposterous since it leads towards a noteworthy capital misfortune. Subsequently, we would prompt the firm to begin working ships for their whole valuable life (25 a long time)..........................

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