CONTENTS

Professional Summary...................................................................................................................................... 1 EXHIBIT you – CIRCUMSTANCE 1: REHAB OF CYNTHIA SELLING EXISTING PARTS & CONVERTING TO STOKER SHOOTING IN 1950......................................................................................... 3 EXHIBIT 2 – SCENARIO two: REHABILITATION OF CYNTHIA USING EXISTING PARTS & SWITCHING TO STOKER FIRING IN 1950......................................................................................... 3 EXHIBIT a few – SCENARIO 3: REHAB OF CYNTHIA SELLING EXISTING PARTS & CONVERTING TO STOKER FIRING IN 1952......................................................................................... 4 DISPLAY 4 – SCENARIO 5: REHABILITATION OF CYNTHIA EMPLOYING EXISTING PARTS & CONVERTING TO STOKER FIRING IN 1952......................................................................................... 5 EXHIBIT a few – SITUATION 4: INVESTING IN A DIESEL-POWERED VESSEL.......................................... 5 SHOW 6 – SCENARIO 5: LEASE A DIESEL-POWERED BOAT....................................................... 5

Business Summary

Economic climate Shipping Firm (ESC) was engaged generally in the travel industry and owned steam-powered boats. The company was considering whether to fix one of its' steam ships or replacing it with a brand new diesel-powered ship. After considering the different situations presented in case, it is the recommendation that ESC should rent a diesel-powered boat. This decision was based on a Net Present Benefit (NPV) evaluation on six different situations. Each scenario and its individual NPV can be summarized beneath:

Scenario

1 ) Rehabilitation of Cynthia -- selling existing parts & converting to stoker firer 1950

installment payments on your Rehabilitation of Cynthia - using existing parts & converting to stoker firer in 1950

3. Rehab of Cynthia – providing existing parts & switching to stoker firer in 1952

5. Rehabilitation of Cynthia – using existing parts & converting to stoker firer in

5. Purchasing a Diesel-Powered Boat

NPV

(In $000s)

-926

6. Lease a Diesel-Powered Motorboat

-919

-950

-943

-958

-810

Presumptions

In addition to the presumptions explicitly set by the case, all of us included the next assumptions within our analysis:

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All hand-fired steam motorboats will have to be converted to stoker firing by 1952 and converting the stoker will not change the remaining useful life from the boat.

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No matter which choice was selected, the boat can be in service to get 20 years.

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No matter which alternative was chosen, no extra debt will be incurred because of the project.

1

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Only one in the scenarios could be chosen.

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Revenue coming from operations is definitely the same despite the scenario picked.

Scenarios 1-4: Rehabilitation of the Cynthia

From the four rehab scenarios, the most affordable was Situation 2: Treatment of Cynthia using existing spare parts and converting to stoker firing in 1950. By comparing the rehab scenarios it really is clear that there were plainly cost savings via converting the stoker in 1950 instead of 1952 and the reduction of the rehabilitation expense was more significant than the funds that would be received from the sale for the existing spare parts inventory. Situation 5: Getting a Diesel-Powered Fishing boat

Scenario your five, buying a diesel-powered boat, gained from the instant cash proceeds from the sale of Cynthia as well as the sale of the existing parts inventory. However , it was more than offset by the significant upfront investment needed by the diesel-powered boat of $400, 500. Furthermore, the low annual money outflows on an annual basis resulting from downgrading the new resources was not significant enough to generate up for the top upfront investment. Situation 6: Renting a Diesel-Powered Boat

In Scenario 6th, leasing a diesel-powered vessel, the regular total annual cash outflows were greater than...

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