4 exhibit 1 taxation 35 in usa 0 in hong kong

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Exhibit 1:
-Taxation: 35% in USA, 0% in Hong Kong
-Discount rate 9%
-Increase in operating cost, 1% above inflation
-Expected inflation= 3%
-Operating cost= inflation+ 1% per year
Revenues:
Daily hire rate (increasing by 200$ for first 3 years and then aligned with the rates, for
365 days)
Year
2003 20000*365=7 300 000$
2004 20200*365=7 373 000$
2005 20400*365=7 446 000$
2006 18714*365=6 830 610$
… …
Expenses:
Cost of the new ship:
Year Costs to be covered
2001 (10% of price) 3 900 000 $
2002 (10% of price) 3 900 000 $
2003 (rest of price=80%) 31 200 000

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Operating costs=4000 daily + 4%
Year Cost per year (*365)
2003 1 460 000$
2004 1 518 400
… …
Capital expenditure for Special Survey preparation:
2007 2012 2017 2022 2027
$300,000 $350,000 $750,000 $850,000 $1,250,000
Investment in Net Working capital (growing with inflation):
Year Net working capital
2003 500 000$
2004 515 000$
2005 530 450$
Exhibit 2
1
(in the following pages)
1.
1
Calculations do not include the capital expenditure in 2027 because we
think the expectations this far in the future will distort our results.
Furthermore, we assume that the company could scrap the vessel before
incurring in that cost.

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