ce of acquiring and not acquiring versus bid n.
Download
Skip this Video
Loading SlideShow in 5 Seconds..
CE of Acquiring and Not Acquiring Versus Bid PowerPoint Presentation
Download Presentation
CE of Acquiring and Not Acquiring Versus Bid

Loading in 2 Seconds...

play fullscreen
1 / 5

CE of Acquiring and Not Acquiring Versus Bid - PowerPoint PPT Presentation


  • 106 Views
  • Uploaded on

CE of Acquiring and Not Acquiring Versus Bid. CE $MM. Bid $MM. Optimal Bid. Optimal CE$10.64M. Optimal Bid $8.75M. CE $MM. Maximum Bid $11.75M. Bid $MM. Recommendations (Risk Neutral). Optimal Bid: $8.75M Maximum Bid: $11.75M If Acquire S.S.Kuniang :

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'CE of Acquiring and Not Acquiring Versus Bid' - sun


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
optimal bid
Optimal Bid

Optimal CE$10.64M

Optimal Bid $8.75M

CE

$MM

Maximum Bid $11.75M

Bid $MM

recommendations risk neutral
Recommendations (Risk Neutral)
  • Optimal Bid: $8.75M
  • Maximum Bid: $11.75M
  • If Acquire S.S.Kuniang:

If the Coast Guard values the Kuniangat scrap value:

NEES should repair it without self-unloader.

If the Coast Guard values it at the auction price:

NEES should keep it with self-unloader by overpaying an additional repair cost of $5.25M

  • If Not Acquire S.S.Kuniang:

NEES should buy GD-II

  • Value of Clairvoyance on probability of Coast Guard ruling: $0.76M
sensitivity to coast guard ruling
Sensitivity to Coast Guard Ruling

If the probability that the Coast Guard rules the SS Kuniang should be valued at its salvage price increases, so does the overall value of the deal at the given bid. The optimal bid also goes up in this case but only marginally.

sensitivity to risk tolerance
Sensitivity to Risk Tolerance

The optimal bid is not highly sensitive to risk-aversion because it increases only marginally with higher risk aversion