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SHIPINVEST4004 analysis of shipping investments Software shipping - Shipstrategy

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SHIPINVEST4004 analysis of shipping investments Software shipping

SHIPINVEST4004

Represents an innovative approach to evaluations of investments in ships. It allows users to visualize how good a proposed investment project is, and to identify which are the key aspects to monitor. ShipInvest is not only compact and extremely fast, but it is designed to be used by the whole spectrum of users ranging from those who only need "back of the envelope" type of calculations to those wanting advanced NPV analysis. A brief description

Investing or not - that is the question

The kamsarmax m/v Valeria della Gatta, 82,000 dwt bulit 2010  was sold in February 2013 for 19.2 mill USD. Below is an illustration on how Shipinvest4004 can be used to analyse if this is a good investment

A number of issues must be taken into account

Input parameter

Illustrative case as pr March 2013

Comments

Name

Valeria Della Gatta

Scenario

Base case

Project Currency

USD

Project horizon

5 years

Total cost

19.2 mill USD

Delivery date

22nd March 2013

Value at end of project horizon

10 mill USD

Loan in percentage of vessel cost

70%

Loan repayment years

10 years

Loan nr of installments pr year

2 installments/interest terms p.a.

Loan interest rate

5 %

Wanted rate of return

12 %

Interest rate on positive cashflow

3 %

Operating cost

5,000 USD/day

Escalaation of operating costs

2 % p.a.

Annual onhire

350 days p.a.

TC rate year 1

10,000 USD/day

TC rate year 2

12000 USD/day

TC rate year 3,4 and 5

14,000 USD/day

Commission on tc rate

2.5 % pa.

.5 %

Key results from Shipinvest4004 include

Annual cashflow

Year 2013

315,000

Year 2014

160,000

Year 2015

873,000

Year 2016

1,016,000

Year 2017

1,045,000

Year 2018

6,280,000

Including sale of 10 mill USD

Break even TC rates

Year 2013

8,900

Year 2014

11,200

Year 2015

11,100

Year 2016

11,000

Year 2017

10,900

Year 2018

20,900

Assuming vessel can be sold for 13 mill USD we get:

Internal rate of return (IRR) on total capital

7.4 %

Internal rate of return on equity

11.5%

Internal rate of return on equity (modified method)

9.9 %

Required sales price

To earn 12 % Internal Rate of Return (IRR) on equity capital

6.6 mill USD

To earn 12 % Internal Rate of Return (IRR) modified method

13.9 mill USD


Shipinvest4004 is analysing ship investments
 
 
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