Wealth Marine

6. Procedure of the marketing research data analysis based on prices of the newly built commercial vessels

Marketing researches are carried out for an estimation at the stage of purchase and sale of the marine company’s real assets, for example vessels, that can be not only an independent approach of market value estimation, but also a method of estimation of the separate economic indexes used within the limits of other methodological approaches, for example, by the method of reproduction cost determination.

6.1. Reproduction cost of dry–cargo vessel

The reproduction cost RC (expenses for vessel construction at market prices) or replacement cost of the dry–cargo vessel, when the length LW is used as a unit of comparison is equal (fig. 6.1):

RC= 0.0201 × LW^2.646, thousand US dollars.

(6.1)

The reproduction cost RC of the dry–cargo vessel based on the results of marketing researches (fig. 6.2) when using the main engine power Ne as unit of comparison is determined as:

RC = 2.50 × Ne^0.944, thousand US dollars.

(6.2)

Fig. 6.1. The dependence of dry–cargo vessel reproduction cost RC on length of the cargo waterline LW

The reproduction cost RC of the dry–cargo vessel based on the results of marketing researches (fig. 6.3, 6.4) when capacity of cargo hold W is used as unit of comparison is equal:

RC = 5.268 × W ^0.751, thousand US dollars (W < 25000 cubic meters);
RC = 0.0326 × W^0.951, thousand US dollars (W > 25000 cubic meters).

(6.3)

Fig. 6.2. The dependence of dry–cargo vessel reproduction cost RC on power Ne of main engine

Fig. 6.3. The dependence of dry–cargo vessel reproduction cost RC on the cargo holds volume W (when W <25000 cubic meters)

Fig. 6.4. The dependence of dry–cargo vessel reproduction cost RC on the cargo holds volume W (when W >25000 cubic meters)

6.2. Reproduction cost of crude–cargo tanker

The reproduction cost RC of the commercial vessel for transportation of crude cargoes (tanker) when the main engine power Ne is used as unit of comparison is equal (fig. 6.5):

RC = 4.725 × Ne^0.958, thousand US dollars.

(6.4)

The reproduction cost RC of tanker when capacity of cargo hold W is used as unit of comparison (fig. 6.6) is determined as:

RC = -0.00007 × W ² + 2,747 × W + 546.7, thousand US dollar
(W < 20000 cubic meters) .

(6.5)

The reproduction cost RC of tanker when the length of the cargo waterline LW is used as unit of comparison is equal (fig. 6.7):

RC = 0.1163 × LW ^2.512, thousand US dollars (LW < 160 meters).

(6.6)

Fig. 6.5. The dependence of crude–cargo tanker reproduction cost RC on power Ne of main engine

Fig. 6.6. The dependence of crude–cargo tanker reproduction cost RC on the cargo holds volume W

Подпись: The reproduction cost RC, thousand US dollars

Length vessel of the cargo waterline LW, meters

Fig. 6.7. the dependence of the crude–cargo tanker reproduction cost RC on length of the cargo waterline LW (LW <160 meters)

6.3. Reproduction cost of fishing vessel

The data about reproduction cost (or replacement costs) of new steel fishing vessels are taking into account by statistical researches when formalizing of the regressions.
           The reproduction cost and replacement cost of a commercial vessel (or other asset of the marine company) can be determined on the similar informational and methodological base. The difference is an object of estimation – structural analogue for determination of reproduction cost or functional analogue for replacement value estimation.
           As the units of comparison are used:
           – Deadweight DW;
           – Displacement empty DP;
           – Length of fishing vessel at the cargo waterline LW;
           – Main engine power Ne;
           – Volume of cargo holds W.
           The replacement cost of a fishing vessel (or reproduction cost – depending on preconditions and assumptions of the appraisal) when the marketing researches data and deadweight DW used as a unit of comparison is equal (fig. 6.8):

RC=87.68 × DW^0.678 , thousand US dollars.

(6.7)

The reproduction cost of the fishing vessel (or replacement cost) when using the the marketing researches data and displacement empty DP as unit of comparison is equal (fig. 6.9):

RC=33.1×DP^0.75 , thousand US dollars.

(6.8)

The reproduction cost of the fishing vessel (or replacement cost) when using the marketing researches data and lengths LW as unit of comparison is equal (fig. 6.10):

RC=5.20×LW^1.77 thousand US dollars.

(6.9)

The reproduction cost of the fishing vessel (or replacement cost) when using the marketing researches data and main engine power Ne as unit of comparison is equal (fig. 6.11):

RC=4.23×Ne^0.98, thousand US dollars.

(6.10)

The reproduction cost of the fishing vessel (or replacement cost) when using the marketing researches data and volume of cargo hold W as unit of comparison is equal (fig. 6.12):

RC=57.95×W^0.704, thousand US dollars.

(6.11)

Test questions

1. Reproduction cost of the commercial vessel.
            2. Replacement cost.
            3. Units of comparison in regression dependences structure for the determination of reproduction cost of commercial vessels of various classes:
                      – Dry–cargo vessel;
                      – Crude–oil tanker;
                      – Fishing vessel.
            4. Similarity of methodical recommendations and information base for determination of the replacement cost and reproduction cost

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