Ocean Carriers free essay sample

Introduction †¢ Ocean Carriers Inc. owned and operated cape-size dry bulk carriers worldwide. †¢ Major Cargo type : Iron ore. †¢ Vessel sizes : 80000 DWT to 210000 DWT. †¢ Cape-size carriers travel around Cape Horn rather than the Panama Canal due to size constraints. Operations Maintenance Maintaining Supplies And on board Stores Supply of Lubricants Cargo Operations Repairs Insurance Business Model †¢ Mostly chartered on â€Å"time charter † basis for one, three , or five year periods. †¢ Occasionally spot charter market was used too. †¢ Charterer paid a daily hire rate for entire duration. †¢ They controlled where the cargo was  loaded and unloaded and also determined the cargo. †¢ OC Inc. supplied a qualified crew along Brief History †¢ In 2003, the average daily operating costs amounted to $ 4000. †¢ This cost increased annually at 1% due to inflation. †¢ Charterers were not charged for days spent in maintenanc e and repair but operating cost were still incurred. Maintenance Work Time Details †¢ Initially 8 days a year for repairs and maintenance. We will write a custom essay sample on Ocean Carriers or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page †¢ This time increased to 12 days per year for ships operating for more than 5 years. †¢ For ships operating for more than 10 years the repair and maintenance days increased to 16 day per year. Operating Policies †¢ Ocean Carriers didn’t operate ships which were more than 15 years old. †¢ As per international maritime regulations they underwent special surveys every 5 years for seaworthiness of the carriers. †¢ As per the norms maintenance costs of ships older than 15 years was too high. †¢ To avoid these costs they sold the ships in scrap or second hand market before SWOT Analysis Strengths Weaknesses †¢ New and Larger vessels compared to industry †¢ So premium is earned compared to market †¢ Too much dependence on basic industries †¢ Not much product differentiation Opportunities Threats †¢ Great demand for iron ore and coal products in a strong economy †¢ Australian production and Indian Exports creating long term demand †¢ Probability of defaulting of Charterer †¢ Future estimates not entirely reliable Case Brief †¢ Background: – Mary Linn, VP Finance at OC Inc is evaluating options whether to invest and if yes how to invest in the new ship to be leased in 2003 †¢ Aim: – To evaluate the various options of capital budgeting, leasing, owning and resale of the new project ANALYSIS Assumptions †¢ Ocean Carriers is a U. S. firm †¢ Discount rate is taken to be 9% †¢ In case of 15 year life of the ship, theresale value in 2017 is calculated by assuming that the ‘then discount rate’ would be 12% †¢ Corporate tax rate is assumed to be 35% (Source: US Federal Reserve Data Release, 2001) Assumptions Continued †¢ Ocean Carriers is located in Hong Kong, where owners of Hong Kong ships are not requ ired 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. †¢ Discount rate is 9% †¢ Inflation rate is 0. 4% (Source: Central Bank of China data release, 2001) Options Available Don’t invest in new ship Build Operate for 15 yrs Sell off or scrapthereafter What to choose? Build Operate for 15 yrs Sell off or scrap thereafter Option. Years Life †¢ The DCF analysis of this option gives us the following results: Option 2 : 25 years life †¢ The DCF analysis of this option gives us the following results: Business Implications of the analysis: Assume the company is based Recommendations †¢ NPVs of both the options are negative †¢ Also, the IRR of both the options are less than the existing discount rate †¢ As a result, we recommend that Ocean Carriers Inc. should not go for the investment in the ship †¢ The tax rate of 35% is considerablylarge †¢ The initial $39 million purchase of the new ship is never fully recovered by expected future revenues since NPV is negative in both the cases †¢ Thus, the investment is too much of a Business Implications of the analysis: Assume the company is based in HK Recommendations †¢ Considering the zero tax assumption, we can see that the NPV of both the options is positive and that for 15 year life is more than the 25 year life †¢ Thu s, assuming the company is based in Hong Kong, the company must go for the 15 year life option owing to the higher NPV Reasons for selecting the 15 years life option †¢ As stated earlier, the NPV of this option is more than the other †¢ As the ship gets older than 15 years, the hire rate starts decreasing more rapidly as seen from Exhibit 4 †¢ As it can be seen from the following graph, the hire rate reduces more rapidly after 2017 Expected Daily Hire Rate vs Age Sell of the ship and don’t scrap †¢ As seen in Exhibit 6, the ship has the potential to generate cash flows even after 15 years †¢ The estimated resale value of the ship at the end of 15 years assuming that the life can be extended up to 25 years is $2,41,78,423 †¢ This value is significantly higher than the  scrap value of $5,000,000 †¢ Also, the company has a policy of not operating the ships older than 15 years old †¢ But, there exists a potential for selling off the ship since some other companies do Continued†¦. †¢ The current inflation was pegged at 0. 4%. But, in case in the future years, say 15 years hence, if the inflati on rises above 0. 4%, then there would be a significant increase in the operating costs and working capital requirements †¢ Thus, the current forecasts for 20 -25 years down the line may not hold good †¢ Thus, even with this case it is better Ocean Carriers Inc. should accept the 3 year contract †¢ Amount recovered by the initial contract is $17,192,594 †¢ Many a times, new ships may not be leased out immediately after delivery because of low demand †¢ But, in this case, the ship can be immediately leased out: meaning it can generate cash inflows immediately on commission †¢ Also, since the client is in utter need of the ship, he may offer the company a premium of 10-15% which is beneficial for Ocean Carriers Inc. Our Recommendations Invest in new ship OC Inc is HK Based OC Inc is US Based Operate it for 15 yrs followed by resale Accept the initial 3 yr contract for Don’t invest in new ship

Corporate Citizenship - Becks Theory of the World Risk Society

Corporate Citizenship - Becks Theory of the World Risk Society Lucianne WhiteCorporate CitizenshipAssignment 1IntroductionCorporate citizenship is based on the premise that businesses will actresponsibly towards society, thus proving to be socially responsible.This essay will look at the three theories of citizenship.Risk in society is viewed by three main approaches, human behaviourapproach, techno-scientific approach and sociocultural approach.Each of these approaches puts yet another spin on the definition ofrisk and how it affects our population. This essay will look at riskfrom the 'world risk society' point of view.It will endeavour to explain Beck's theory of the 'risk society' anddiscuss how his theory might be applied as a useful framework forexamining the level of corporate citizenship in organisations.It will also include a look at how other theorists define risk. Inconclusion it will evaluate and comment on the usefulness of Beck'smodel.Corporate CitizenshipA citizen is a member of a modern political community (i.e.Corporation: Peopl ethenation-state) who posesses formally defined rights and responsibilitiesby virute of membership to that nation, typically including the right tobe involved in selecting governments (Bessant Watts, 1999).Corporate citizenship is therefore corporations which have rights andresponsibilites of their own, as well as obligations to their community.Corporate citizenship is based on three theories; minimalist,communitarian and universal rights. We will look briefly at what eachtheory means.Minimalist is where citizens strive towards their own goals with verylittle interference. They realise there are rules which regulate theirbehaviour and are able to function individually.Communitarian is where the communitys' well being outweighs theindividuals rights. Everyone works towards reaching the communitygoals rather than focusing on personal goals.Universal rights is where everyone pursues their own goals andinterests but makes sure to consider others rights. Being aware...

National Rifle Association NonProfit Organization Research Paper Essay

National Rifle Association NonProfit Organization Research Paper - Essay Example Hence, the need to be responsible with regards this matter is an important issue to consider for everyone. For this particular reason, the NRA stands strong as an organization that believes of responsible gun handling from then until now. NRA primarily started out as an organization that is based on the views of two retired army who simply wanted to make the entire human society more knowledgeable about the wise handling of firearms. Col. William C. Church and Gen. George Wingate started NRA in 1871 to be able to promote a sense of scientific process among all individuals whenever they handle firearms. As the US charter in the State of New York approved the existence of the said organization, the First President of the organization in the personification of former US Senator Gen. Ambrose Burnside took responsibility of the position. The first president tried his best to establish the organization's reputation in the society that they are most involved with. It could be observed that with the aim of making the society more responsible in the manner of handling guns for self-protection reasons. It is indeed from the primary aims of the founders of the organization that NRA actually started out to affect the entire human society. Hence, through the financial support provided by the Long Island and Creed Farm, the organization was able to establish a practice range round that would host to train numerous individuals who have their own guns for the purpose of self defense. The Credmor, NRA's first training grounds had then been established during the year 1872. It was the first venue for the first ever annual shooting matches that happened during those years. IT was the year 1906 when the organization began trying to influence the larger population in the human society and that is the youth. NRA began to campaign for having university-based programs that would allow young individuals to learn the right usage of guns. Through the promotion of shooting sports in America, NRA begins to affect a larger population in the American society. With the pursuance of NRA Secretary Albert Jones, the said program flourished to affect the entire American population during those years. Moreover, the growth of recognition that the society has upon these programs affected many among the populations staying within the area. As of today, the same program still makes a great effect on the process by which American Boy Scouts, American Legron and US Jaycees are being trained at present. Up to this day, the organization aims to educate everyone in the society about the need to be responsible and knowledgeable about the right usage of guns and other firearms as well. In an aim to educate everyone, the launching of the NRA Police Firearms Instructor Certification Program in 1960, the association holds a record of having 50,000 certified instructors who handle different courses of responsible gun handling. From this particular program, 750,000 gun owners are given certification every year and are then given the rightful knowledge that they need to acquire with regards the need to handle their firearms in a manner of responsibility and alertness to what is right and what is wrong in terns of using their gin authority or chance to hold a firearm for any reason there is

How Gas Laws Apply In the Health Care Industry Research Paper

How Gas Laws Apply In the Health Care Industry - Research Paper Example Most of the arms and ammunition works utilizing the principles of the gas laws. A bullet utilized the gas pressure to be shot from the bullet. This high pressure is attained by igniting the gunpowder present in the bullet. Rockets also have the same principle but a rocket requires a lot more fuel to attain such a pressure due to its weight as compared to a bullet. In this way, the significance of the gas laws is in every aspect of life. Gas laws are applicable to most of the industries to provide goods and services to the customers. Gas Gas is a state of matter in which the molecules of the matter remains apart from each other, in this way, the volume of the gas remains higher as compared to its weight. Gas may be colorless and odorless but gases have odor and slightly light color like chlorine has a stingy smell while oxygen is colorless and odorless (West 2008). Difference between Gas and Other Type of Matter The other two states of matter are solid and liquid. The molecules of the solids are such liked to each other that the molecules can only vibrate maintaining their position because of external force. In liquids, the molecules are liked to each other but in relatively loose bond than that of the solids. In this way, the molecules can more from one place to remains contacted with the other molecules. In gases, the moles are free to move, there exists no bondage between the molecules of the gas. ... Pressure Pressure is a term, which is utilized when the freely moving particles of the gas collide with the walls of the container and collide with each other to make a force exerting against the wall of the container. The more the dimensions of the container, the lesser will be the pressure and the container with less dimensions has the more pressure for the same amount of gas. In the similar way, if the amount of gas is increases the pressure will be increased in the container with similar dimensions. The units of the pressure are Atmospheres (atm), Pounds per square inch (PSI), Inches of mercury (in.Hg) and millimeters of mercury (mm.Hg). While the SI unit of pressure is Pascal (Pa) or Newton per square meter (N/m2) while non SI units are Bar and dyne per square centimeter (barye). Standard pressure is considered as one atm (Halzner 2011). Temperature Temperature intensely affects a gas. Temperature is an external effect that affects the molecular motion of the gas particles. As t he temperature increases the random molecular motion of the particles, increases as the gas molecules take the heat energy and convert it to kinetic energy. In this way, the volume of the gas increases and thus the pressure increases. Similarly, if a container filled with an amount of gas is exposed to extreme lower temperature, the gas in the container contracts and creates a vacuum in the container, the container may sucker external gas to fill the vacuum. The standard value of temperature is 273K or 0oC. The units of temperature are Kelvin (K), Celsius (C) (Halliday, Resnick and Walker 2005). Chemical amount The chemical amount of gas is represented as the no of grams or no of moles. The amount in grams is calculated using the

Process Design Matrix and Summary Essay Example for Free

Process Design Matrix and Summary Essay This process design matrix and executive summary will focus on Mac Tool Company and there performance measurement process. This executive summary is needed for Mac tools due to their lack of process performance management that will include service approaches, that consist of production line, self-service, and personal attention approaches. This summary will also cover product approaches for their process performance measurements that consist of, batch assembly line and continuous flow approaches. This executive summary of process performance measurement will quantitatively tell Mac Tools something important about their products, services, and any of the processes that produce them. To conclude this summary, this tool will help Mac Tools understand, manage, and improve the company’s processes. To begin, the first service approach for Mac Tools process performance management consist of production line approach to improve the company’s performance efficiently and effectively. Mac Tools starts with each employee receiving their performance file that includes their consistency, effectiveness, and efficiency for their progress for success and promotions. These performance measurements, that includes their 10-15 machines of production line approaches. There will be a selection on running their machine to run perfect parts or to make changes but this way they have it recorded and make the changes as needed. The second service approach for the process performance measurement plan consists of, a self-service approach. Mac Tools will be implementing EMC2 consulting services with HR and then management to assure that every activity provides meaningful value. (EMC2, 2013). At Mac Tools there are a lot of fragmented processes that can be avoided so financially and human resources are not drained and diminish any chances of keeping up with changing markets and customer demand. There are self-service approaches in this change for the  process performance management plan for every employee (machine operators etc†¦) that include, â€Å"Streamline processes to expedite new product introduction, standardize, integrate, and improve existing processes, design and implement new processes, simulate and model processes for operators, define process metric and performance management strategies.†(EMC2, 2013). The third service approaches for the process performance management plan consist of personal attention approach. Mac Tools should implement the personal attention approach that will include specific competencies that will best be determined through a job analysis process. Competencies that will be included in this personal attention job analysis approach will consist of, accountability and dependability, adaptability and flexibility, advocating causes analysis and reasoning attention to detail business alignment. All of these competency functions are to determine each employee’s performance file and documented with constructive criticism and praise to becoming successful with and for the company. The Mac Tool Company also needs to implement product approaches for their process performance management plan. The first product approach that will be implemented is known as a batch approach. A batch approach can be known as a lean manufacturing process also and focuses on demand-based flow manufacturing. â€Å"This type of production setting, inventory is pulled through each production center when it is needed to meet production orders; this will deliver the benefits of, decreased cycle time, less inventory, increased productivity and increased capital equipment utilization.† (Wiki, 2013) The second product approach for Mac Tools process performance management plans consist of, assembly line approach. By Mac Tools implementing the assembly line approach, it will keep all operators on the same page and get product sent to the next department for the assembly of the product being put together. Then finally are sent to the final department to be inspected and shipped. Having different departments for the processes of the product, and having an assembly line approach for each step will keep the company’s organization on line for their performance management. The third product approach for Mac Tools process performance management plans consist of, a continuous flow approach. The continuous flow approach are implemented through the â€Å"lean building blocks†, like, â€Å"Five S: Aims to bring orderliness, tidiness , and cleanliness to operations ,visual controls: All  tooling parts and other production activities are kept clearly in view to help everyone understand the status of the process at a glance. Poka-Yoke: Mistake Proofing. Process designs can be modified to make it nearly impossible for mistakes, spills, leaks, and other process upsets to occur. By implementing these techniques and others will uphold the continuous flow approach for the process performance management plan for the Mac Tool Company. In conclusion, the process design matrix and executive summary was focused on the Mac Tool Company and what their performance measurement process entailed. The executive summary was needed for Mac Tools due to their lack of process performance management that was included in these service approaches that consisted of production line, self-service, and personal attention approaches. The summary also covered product approaches for their process performance measurements that consisted of, batch, assembly line, and continuous flow approaches. The executive summary that entailed their process performance measurements will quantitatively tell Mac Tools something important about their products, services, and any of the processes that produced them. To conclude this summary, this tool will ensure that Mac Tools understands, manages, and improves the company’s processes for their future business and profits. References EMC2, (2013). Business process management. Retrieved on January 13, 2015 from http://www.emc.com/consulting-services/application/expertise/business-process- management-bpm.htm Lean Manufacturing (2013). Wikipedia. Retrieved on January 13, 2015 from http://en.wikipedia.org/wiki/Lean_manufacturing

Limiting the Use of Torture in America Essay -- Criminal Justice Crime

Many social groups as well political groups have discussed the issue of torture. The elements and basic working of torture have many against it saying it is too cruel and violates America’s 8th amendment. But the question does arise what do we do if there is a suspect found hours before the crime is committed? Or what do we do to those that are known to have committed the severe crime (ie. a serial killer that has three victims hidden away) how do we find the victims and such? The usage of torture on individuals that have a reasonable doubt of committed a heinous crime should not happen. Though torture itself in the United States is not allowed. But should torture be allowed, it should only be used on those that committed crimes that can put you on death row or life in prison. Such as in Oklahoma where if â€Å"a capital offense sex crimes against a child under 14 years of age when the offender has a previous conviction for a similar offense† , but also that person had a victim hidden from the public eyes at the time of the arrest, light torture should be allowed for that ...

Pia Financial Analysis 2013 Year

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