Excel · DCF
Ocean Carriers: Capesize Newbuild Valuation
Capital budgeting for a $39M capesize dry bulk carrier, built to answer whether the ship should be commissioned at all. Four scenarios: fifteen and twenty-five year operating lives, each run under US and non-US tax treatment, discounted at 9% with survey capex, straight-line depreciation, working capital and scrap value all carried through to free cash flow. The decision turns almost entirely on domicile. Under US tax the newbuild destroys value on both horizons; operated tax-free the same vessel returns $7.1M over fifteen years and $11.0M over twenty-five. Holding the ship past the fifteen-year scrapping policy is worth roughly $2.4M more either way, which is an argument against the policy itself.
4 scenarios NPV by tax regime