Change and Continutie

Between 500 CE and 1500CE changes and congruities in interregional trade in the Eurasian World happened. The Silk Road associated South Asia, Western Asia, and South Asia with Europe. The â€Å"road† was utilized for exchanging great, for example, silk, porcelain, and different extravagances. In addition to the fact that it was utilized for exchanging material merchandise, however it was likewise utilized for exchanging religions, abilities, and information. It additionally went along maladies. A few changes that happened were that old style realms falling and new domains started to rise, and exchange the Indian Ocean turned out to be more directed in 1500CE than before in 1400CE.A coherence that happened was the Indian Ocean exchange stayed unregulated from 700CE through 1400CE. Because of the breakdown of the old style realms in 500CE and the ascent of the Byzantine, Abbasid, and Tang Empires in 700CE, exchange declined then developed. At the point when the traditional realm s fallen, exchange declined on the grounds that because of the absence of government following the decrease of the old style domains, assurance couldn't be allowed for exchange and exchange courses couldn't be fixed. Because of these reasons, exchange and travel became dangerous.When the Byzantine, Abbasid, and Tang domains started to rise, exchange developed again on the grounds that Tang rulers set up military armies to ensure the exchange done through the Silk Road, the Byzantine empire’s focal area on the Mediterranean Sea permitted exchange to thrive, particularly in the capital of Constantinople, and in the Abbasid realm Muslim traders spread improved water system in the locale, which prompted increments in food creation and populace. Due to the three domains rising, exchange had the option to be effective again after the fall of the old style empires.During the long stretches of 700CE through 1400CE a congruity of unregulated Indian Ocean exchange proceeded with Eurasi an exchange. The Indian Ocean spoke to the world’s biggest ocean based arrangement of correspondence and trade. The rotating wind flows that blew typically eastbound throughout the mid year months and westbound throughout the winter months (storms) was what made the Indian Ocean business conceivable. Since the Indian exchange course was so fruitful and numerous individuals relying upon it, it kept on staying unregulated from 700CE through 1400CE.Another explanation behind it proceeding to stay unregulated was on the grounds that urban areas found deliberately developed and it was a sheltered domain for business sectors, it invited all vendors, and charged sensible expenses. In spite of the fact that it stayed unregulated from 700CE through 1400CE, that all changed by 1500CE. From the unregulated Indian Ocean exchange the 1400’s, exchange turned out to be progressively constrained by the Chinese and the Europeans by the 1500’s. To oversee the Indian Ocean exchang e Europeans caught the port urban areas, destroyed them, took from them, and set them ablaze, executing the inhabitants of the cities.Because individuals from different nations exchanged too and they brought their way of life, religions, and different qualities and convictions that intrigued the individuals who lived along the Indian Ocean locales, many individuals were influenced. The Indian Ocean got constrained by the Chinese and the Europeans. Similarly as the Silk Road was utilized for exchange and business and was effective the Indian Ocean was likewise utilized for exchange and trade. Be that as it may, the silk course is generally interconnected exchange course across Asian landmass interfacing East, South, and Western Asia with the Mediterranean world, just as North and Northeast Africa and Europe.In Indian Ocean courses significantly associating Middle East, Africa, and East Asia with Europe and the Americas. All in all, during the timeframe of 500CE through 1500CE Some pr ogressions that happened were that old style domains crumbling and new realms started to rise, and exchange the Indian Ocean turned out to be more directed in 1500CE than before in 1400CE. A coherence that happened was the Indian Ocean exchange stayed unregulated from 700CE through 1400CE. Both the silk street and the Indian sea were utilized for business and exchange.

Strategy and Case Analysis

Question: Examine about theStrategy and Case Analysis. Answer: Presentation Netflix Company was set up in the year 1997 by Reed Hastings and Marc Randolph. The organization has step by step, become incredible since most recent nineteen years and have modified the considering buyers of watching films and recordings. The organization was built up with minor thirty work force. There were 900 and twenty five contributions accessible for fifty pennies for every rental at first. As on date the organization offers a huge number of films and has fanned out in unique substance. The organization keeps on furnishing DVD rentals with colossal contributions. The report underneath is the examination of the ascent of the organization, since its commencement and its future in the exceptionally serious market (Blake, 2016). Changing Technology In the year 1997 the organization was established, and inside one year of its foundation the organization propelled 925 rentals offering with a staff of 30 individuals at a rental expense of 50 pennies. In the year 1999 the organization presented month to month memberships. At that point pushing forward in the year 2000, the organization dropped rentals and went to memberships. In the year 2005, 35000 motion pictures were advertised. The organization sent out million DVDs every day. From 2006-2012 the offer of DVDs descended and the organization paid regard to its online contributions (Walker, 2016). The organization had an imprint in the spilling market, as it was generally preferred. In the year 2012 the organization discharged unique substance. It began with narratives and stand up appears. By 2013 Netflix had 27.1 million US decorations and its use in 40 nations. Estimating Strategy The organization fuses an exceptionally shrewd valuing technique. At the hour of their first contribution the organization didn't charge any additional expense. On the off chance that the client had one DVD membership, they got a free spilling video. The clients even moved from an a few DVD membership to an affordable one DVD membership as the spilling alternative too gave different choices. The motion pictures can be viewed on I-cushions, TV and PCs (Murphy, 2011). At that point the organization established an enormous increment in the costs and had a reasonable message that the organization is unmistakably fragmenting its client base. A few clients readily surrendered the DVD choice while others paid more. Some of them completely left. Netflix has incorporated this valuing system with their model and they have a cost based reaction for this activity. After some timeframe when the client base will be absolutely and effectively moved the organization will offer a mid path choice of p ossibly giving a regular DVD mail offering, which will placate the complaints of the clients. The message of the organization is noisy and clear that it needs to build its normal selling cost and along these lines intends to give more to its endorsers consequently of their value (Pelts, 2016). Development The organization sets an incredible case of problematic advancement. Troublesome development is an advancement which makes another market and afterward bit by bit upsets the previously performing market, in this way separating the current market pioneers. Purchasers might possibly see the huge change, however these developments essentially become piece of their regular daily existence. Troublesome development was a piece of the organization technique (Ostrower, 2016). For Netflix, the DVD via mail model, drove its rivals into insolvency. The organization offered the administrations which were increasingly moderate, open and accessible to the underserved clients (Capital, 2016). Netflix Current Performance Netflix buyers are being included for a long time. Netflix had an expansion of 17 million hits a year ago. Their buyer base expanded to 13 billion of every 2015 from the earlier year and the circumstance was same for 2016. More purchasers are picking Netflix to watch satellite TV, play computer games and watch film as opposed to going in theaters. It is excellent employment for Netflix to make such a large number of purchasers subject to them. Netflix is developing radically and they are making shrewd systems. In year 2016 they have entered global markets for development, for a model, in China, the Company is wanting to put colossal in universal markets for extension and development. Truth be told, they will likewise put resources into authorizing content. This will end up being a compelling technique as they will sparkle their name in global grounds too. As of now, they have just demonstrated that how much ward their clients are on them. Future According to Pacific Crest Securities, Netflix has become the main brand for future TV of the nation. They key to Netflixs achievement lie in the way that it has entered 130 worldwide nations and will reach up to 190 sooner rather than later. The Netflix future procedure lies in the way that they need to be worldwide and push ahead in taking universal authorizing to however many numbers as could be expected under the circumstances. Netflix gives unique genuine information and has the position to give to the entire world which makes it totally different from others. Netflix is wanting to put tremendous in this system to turn into a force to be reckoned with. They are making arrangements for immense information base of unique film shows and computer games to appropriate the world over. With the methodology of being worldwide, Netflix is intending to bring down its expenses because of economy of scales. Being worldwide will consequently assist them with letting down expense per supporte r which will at that point increment more client base including individuals from lower working class (Mcalone, 2016). Netflix universal development and unique information will give them enormous ascent later on. End On the off chance that we examine this report it turns out to be certain that Netflix as an organization has all around adjusted according to evolving circumstances. During the 90s, individuals were progressively subject to DVDs for watching films, thus the organization was essentially occupied with rental contribution of DVDs. In the mid 2000, the organization moved from rentals to month to month memberships in this manner moving the reliance of customers towards membership. What's more, when a huge area of individuals particularly the adolescent became ordinary purchasers of the Internet, which is the point at which the organization moved its concentration towards online contributions. The thought clicked and the organization considered gigantic to be as it was all around acknowledged by the intended interest group. This is the manner by which Netflix changed the idea of watching motion pictures and video. Another purpose behind the companys development is its creative thought of d ischarging unique substance in 2012 as narratives and stand up appears. The blend of the companys universal development just as appropriation of unique substance is likely give a further lift to the companys development. Thus, not surrendering to the adjustment in business condition and low interest of DVDs, Netflix prevailing with regards to composing its own example of overcoming adversity. References Blake, K., 2016. The Rise of Netflix, Available at: https://www.engadget.com/2016/09/19/the-ascent of-netflix/ Capital, S., 2016. Problematic Innovation: How Netflix reformed the video showcase, Available at: https://www.seiercapital.com/troublesome development how-netflix-changed the-video-advertise/ Mcalone, N., 2016. Netflix is the 'main model for the eventual fate of TV,' as indicated by Wall Street examiners, Available at: https://www.businessinsider.in/Netflix-is-the-main model-for-the-fate of-TV as per Wall-Street-experts/articleshow/51130093.cms Murphy, E., 2011. Netflix estimating system, Available at: https://blogs.harvard.edu/cqtwo/2011/07/14/netflix-evaluating methodology/ Ostrower, D., 2016. Netflix Instant Video Streaming: A Disruptive Innovation Thats Disrupting Netflix, Available at: https://www.altitudeinc.com/netflix-a-troublesome advancement that is upsetting netflix/ Pelts, S., 2016. What Is the Netflix Pricing Strategy?, Available at: https://marketrealist.com/2016/10/netflix-valuing system/ Walker, N., 2016. The ascent of Netflix, Available at: https://www.businessreviewusa.com/initiative/5478/The-ascent of-Netflix

What Makes You Tick

What Makes You Tick Seeing all the parents converge on MIT campus for Family Weekend reminded me of my parents, who are one continent and one ocean away. So, on a side note, really take the time to appreciate your parents while youre still with them. This is especially true for all you high school seniors who are leaving for college a year from now. Your parents might be nagging at you about your SAT scores now and theres still technically one year left before you have to say goodbye, but theyll be gone before you know it (really.) Anyways, all this reminded me of all you Early Action applicants, who are probably cranking out application essays, having interviews, and/or worrying whether your SAT scores are high enough right now (or, at least, I hope you are just not the worrying part). Therefore, I decided to tell you my ED story. Last year, around this same time, I was pretty much in your shoes. Ive identified a college that I was very passionate about way back in August, and knew I wanted to ED it, no questions asked. I was done with the testing and other requirements fairly early, so I spent the majority of my time re-reading and re-examining my applications (while wondering why in the world my interviewer hasnt bothered to call me yet). I wrote out my essays, I polished them, and I fine-tuned them to a point that I was able to recite it backwards (Im serious). I had several of my teachers read over my essays, and I actually wrote 13 drafts for my main essay. This is like a world record for me, since I am basically the master of churning out pointless fluff insightful essays for AP testing. Simply, I just hate writing multiple drafts for a single essay. Predictably, l became paranoid about my application very quickly. I wanted it to be totally perfect. 100% perfect not 99%, or even 99.99% 100. At one point, I actually went online and searched for the right orientation of stapling pieces of paper together (the staple should ideally make a 45 degree angle to the left side of the paper, so its basically slanted, sloping up to the right) because I didnt think I should staple my papers together recklessly (afterwards, I discovered that its generally not a good idea to staple any part of your college application, actually. Many colleges scan additional sheets of paper that come in, and staples are a huge hassle.). When I clicked submit online 2 hours before the deadline, I felt I had the complete package. I had the stats, I had the essays, I had the recs I am going to college. A month and a half later, I was shocked when I received a deferral letter in the mail and this is not due to blind confidence either, as I really felt that my application was strong enough in terms of academic merit to get into the college I was applying to. I started asking myself these questions were my SAT scores not high enough? Did I not do enough activities? Was my essay too boring? Finding no answers to my queries, I plunged myself headfirst into Regular Action applications. Not to sound corny, but it was after doing the MIT application that I realized what was wrong in my Early application. I was trying too hard to be different. I was trying too hard to be the person that adcoms like. I wasnt being myself. I re-read my Early application, and I realized that I sounded like a cookie-cutter student that was trying too hard to flaunt his academic abilities. I was trying hard to impress, trying hard to be unique, but I hardly recognized the person that the application tried to convey. Realizing this, I completely took out the 13-draft essay that took me three solid weeks of revision and wrote an essay on the same topic, using the tone I liked and the angle I wanted to convey it from, not the tone and the angle that my teachers had suggested. After proofreading it carefully for grammatical errors multiple times, I sent it in without consulting another adult. I wanted this new essay to be mine, I wanted it to be from myself not from my GC, not from my teachers. The biggest piece of advice I want to give you guys as you guys approach not only the EA application, but all the future applications that you might encounter is to just be yourself in whatever you do. When you write your essay, dont write with a specific audience in mind. Dont say the things that you think the admissions officers want to hear. When you do the interview, dont try to second-guess your interviewers questions and remarks. When you describe your activities, convey your true passions. Dont say that you totally loved Student Government when you hated all the lunch meetings, and dont be shy to share the ups and downs in your life even if it may be something as simple as loving the fresh smell of grass after a spring rain. These things are what makes you different from the thousands of people applying to the same school as you are. Its not just about the four digits in your SAT score or the numbers after the decimal point in your GPA. Even a robot can be trained to take tes ts or do algebra, but what is it that makes you different from a test-taking machine? Quite simply, what tickles your heart and motivates you to overcome the challenges that youve faced in your life? I wish you guys the best of luck in your college application experience. And for those really committed to coming here, I hope MIT is a wonderful fit for you :) Im still discovering reasons to love MIT each day. Take a look: Amazing Guest Lecturers Dr. Harish Hande is a pioneer in bringing light and electricity to rural locations in India through affordable solar panel systems. iHouse had the honor of inviting him to dinner and learning about his developmental solutions for underprivileged countries. Diverse Talents Last Saturday I went with my friends to Sigma Kappas Late Night an annual charity talent show hosted by the sorority to promote research for Alzheimers Disease and saw some really amazing acts One of the most incredible things about MIT is the wealth of talents that is represented in the student body. Everyone comes here with a story to share, and it is very rewarding to discover the stories of your fellow peers. We may hail from the different corners of the world, but we are all connected by a love of learning and a deep conviction for our passions be it playing the guitar, acting in a circus, or inventing robots. Explore the stories of those people around you you will be pleasantly surprised (I still am, almost on a day-to-day basis). Unity MIT is United. We may be taking classes from Course 1 to Course 24, but we are never too busy to help the person beside us in a pset that dragged on for too long or help him study for a test that seems too difficult. I went on a retreat with my fraternity, SigEp, last weekend, and we played this game in which the objective is to lower a stick propped up by the index fingers of all the players to the ground, with the catch that no one can lose contact of the stick in the process. A couple of days after we returned from the retreat, some of the older brothers volunteered to host a study session for the froshies in anticipation for the 8.01 midterm. It is interesting to note that one of the key points in the Helium Stick activity is to constantly look out for one another, especially the people who are about to lose contact with the stick. In the same way, the people at MIT offering help to one another is in tune with the same spirit. Im not referring to just my fraternity brothers offering to prep me in 8.01, but also the guy in my 18.02 recitation that patiently explained the concept of directional vectors to me, the girl that offered to sub in for my SAT class when I have to be gone for the SigEp retreatthe list goes on and on. Anyways, this entry could quite viably be two entries, so I think I will pause here. Before I sign off though, check out this cool picture from our retreat and some excellent food. So best wishes from George 10 and me to all the Early applicants! Share your stories, explore your options, and dare to dream. George and I have every confidence in you. Right, George? Right. Heres to you all. Cheers!

Study On Investment Appraisal And Takeovers Finance Essay - Free Essay Example

Sample details Pages: 14 Words: 4235 Downloads: 3 Date added: 2017/06/26 Category Finance Essay Type Research paper Did you like this example? Investment analysis is very important as it establishes cash and other resources are invested in profitable projects and identify some risk which might arise from investment and measures to eliminate the risks. Getting the right choice of a project to invest is crucial, the management need to have the skills to make the right decision which will maximise stakeholders profit. Most of the companies have lost their reputation and even liquidated due to wrong managerial decisions on what investment to embark to, hence a proper and less risk method of investment analysis is crucial in this role. Don’t waste time! Our writers will create an original "Study On Investment Appraisal And Takeovers Finance Essay" essay for you Create order This is an academic report analysing Jebb PLC, a predator (acquirer) company proposed to takeover a target rival company. In this report, I as a senior Financial Manager in large listed company, I have analysed business investment feasibility, to assess whether it is worthwhile to make a companys investment decision. The analysis has covered reasons behind takeovers, methods and potential effects of takeovers. Also I have looked at the methods of investment appraisal, nature of gearing, risks and cost of capital. 2.0 TAKEOVERS Jebb PLC has decided to embark into takeovers as one of its growth strategies to increase the wealth of shareholders. Takeovers can be simply defined as the purchase of ones company (the target) by another (the acquirer, bidder or predator). In takeovers basically a stronger company takes over a weaker one. The general driving force for Jebb Ltd takeover has been enhancement of shareholders value, bringing cost saving and efficiencies. However the reasons can be analyses in length here under as follows. 2.1 Reasons behind takeover Economies of scale This is simply reductions in the average cost of production, and hence in the unit costs, when output is increased. Oxford Dictionary of Business and Management 4th Ed. When the cost of producing a unit of good falls as its output rate increases, economies of scale exist. Michael Parkin (2003) p. 189 In this context the fixed operating costs are being spread over a larger production volume, equipments are being used efficiently with high volume of production. Economies of scale arise from specialization and division of labor that can be reaped more effectively by firm coordination rather than market coordination. Michael Parkin et al.Economics 5th ed. (2003) p. 189. Following this acquisition Jebb Plc expect cost reduction and hence achieve of economies of scale (scale effect) In the economies of scale to work out Jebb Plc would expect one of the following to happen. Negotiation of lower prices with suppliers for larger orders Combined pro duction processes, or operation on larger but fewer sites to save operating costs Saving in administration, distribution, marketing or research and development costs. . Growth, Empire building and market penetration by accessing to new markets, may be achieved at a much quicker rate by buying existing operator Avoiding higher start up costs Barrier to entry in industry or country may be avoided Access to skilled workers, hence performance maximisation Brands/patents a trademark which increases companys reputation. Complementary resources Here there are mutual benefits, the predator company will provide the necessary ingredients necessary for a small company (target) success. In this situation a small company may have unique product/services but lack the managerial, engineering, knowhow and many more which requires a target company to produce and market its product/service in a profitable way. (Richard A. Brealey, et al pg. 886). Acquire technology and RD expertise 2.2 Potential effects of takeover The process of takeover has both positive and negative effects for both parties, i.e. predators side and to a target company. In this case I will base on the potential effects which might arise in Jebb Plc as acquirer and few for a target company. On positive side the offer given by Jebb Plc to its target company will Increase production level, thus increase of profit margin and maximisation of shareholders wealth and dividends. This growth and shareholders increase in wealth is possible due to synergic effect, by sharing expertise, cost saving production costs per unit and increase in companys reputations, advantage in sharing technology and many more. As we have seen the aim of takeover is to maximise shareholders wealth however this is not always the case. A survey conducted shows the following are some of the factors contributing to M A fail. Target management attitudes and culture differences Lack of post acquisition planning Lack of knowledge of the industr y or target company Poor management practices in target company Little or no experience of acquisitions. (Per Cooper and Lybrand survey in Merger and Acquisition conducted in 1992) The takeover predictions might prove disaster due to hostility takeover process, whereby a predator company is forced to overpay a target company in a bidding process so as to win a bid. A simple recent example here is a takeover between Kraft a US Food Company and Cadbury a British-based confectionery company, which took place in March 2010. Initially Kraft valuing a company at  £9.8bn this were rejected by Cadbury, it went up to  £10.5bn still were rejected and the last deal were made at  £11.5bn. The overpay has increased Kraft debt after had to borrow  £7bn to finance the takeover, this can further increases Interest rate. Available at: https://news.bbc.co.uk/1/hi/8467007.stm accessed on 10 April 2010 Normally this happens when a company is losing sight in hostile takeo ver as a company focusing in winning. Another negative effect is time consuming in the course of takeover and a company can even step aside in concentrating in running its current business, and dealing with takeover process. Redundancies can be one of the disadvantages, as not all staff will be taken to start a new project, especially top posts as there is likelihood of having two experts in one post, one from target and the other from acquirer companies. This can be seen from my example as it has happened in Cadbury were Chairman Roger Carr, Chief Executive Todd Stitzer and Chief Financial Officer had to resign, this were followed by Kraft announcement that it planned to close the Cadbury factory at Keynsham with the loss of 400 jobs. Available at: https://news.bbc.co.uk/1/hi/business/8453433.stm Accessed on 12 April 2010. Also a company should expect increasing running costs at the beginning which will be used in business reengineering process, and staff training es pecially when is to do with deliver in a new technology. Most of the disasters occurring in MA even in many mergers which seem to make economic sense are due to Management failure (as we have seen according to Per Coopers and Lybrand survey 1992) to handle the complex task of integrating two firms with different production processes, accounting methods and corporate cultures. A simple example here is the merger of three Japanese banks to form Mizuho Bank. These tree Largest Japanese banks predicted that the bank would lead the new era through cutting-edge comprehensive financial servicesÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦.Within three months of operation after its merger IT problem occurred, due to different supplier of its computer system, the system couldnt link they then decided to connect the three different systems together using relay computers. This was disaster as some 7,000 of the banks cash machines did not work, 60,000 accounts were debited twice for the same transaction and a lot more problems. The Economies April 27, 2002. p. 72 Big Bold, butÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦. One of the objectives of Mizuho was to exploit economies in its IT Systems. The fiasco illustrate dramatically that it is easier to predict such merger synergies than to realize them. Motivations and involvement of staff in the whole process of takeover is of paramount important so staff can buy the idea, as the value of the most business depends on human assets(managers, skilled workers, scientists, and engineers). If these people are not happy in their new roles in the acquiring firm the best of them will leave. (Richard A. Brealey, et al pg. 884). One Portuguese bank (BCP) learned this lesson the hard way when it brought an investment management firm against the wishes of the firms employees, when the entire workforce immediately quit and set up a rival investment man agement firm with a similar name. Occasionally a takeover does gains but buyers nevertheless lose because it pays too much. This happen especially in unforeseen circumstances when Predator Company underestimate the cost of renovating old plant and equipment, or it may overlook the warranties on a defective product and other costs. At the end of the day all these costs will probably fall on the buyers. I have analysed the reasons behind takeovers, and the methods by which such takeover may take place together with the potential effects of takeover, with some real life example. Jebb Plc should learn a lesson from what has happened to other companies in a takeover exercise, by making sure realistic and better informed decision is made on acquiring and disposing of assets to avoid any disaster. 3.0 METHODS OF INVESTMENT APPRAISAL Investment can be defined as the purchase of creation of assets with the aim of making profit in future. Economists define investment as the addition to the capital stock of the economy factories, machines offices and stock of materials, used to produce other goods and services. Alain Anderton Economics (1999) 2nd ed. Investment appraisals are conducted as an assessment tool to see whether it is worthwhile to embark into a certain investment. Economies Investment decision making is one of the most critical and key area in an organisation. The decision in opting what project a company should go for which will earn the firm more than amount employed over a period of time needs managerial skills to handle. Jebb Plc need to assess outflow and inflow of funds, the lifespan of the investment, the degree of risk attached and how much will it cost a firm to obtain funds, with the maximisation of shareholders wealth as the key business objective. The investment appraisals conducted by Jebb Plc will ensure the cash and other resources are invested in the most profitable and less risk projects. Any arising risk(s) will be considered and measures will be taken to eliminate the risk and/or reduce the impact. In order to achieve a profitable and economic sound project various methods on investment appraisal are used. These methods are categorised into two, the traditional methods includes payback period (PP) and Average Rate of Return (ARR) and the second method is discounted cash flow (DCF), this one includes the Internal rate of return(IRR) and Net Present Value (NPV) TRADITIONAL METHODS Payback Period (PP) Payback period measures the length of time taken for a project to pay back /repay its initial capital cost. A company uses the method in deciding between two or more competing projects by taking the one with shortest payback period. The method is used as an initial screening method. Mathematically a PP can be calculated as: Payback Period = Initial payment / Annual cash flow The method is the most widely used worldwide than any other method according to number of literatures. The research has proved most of UK firms prefer the method. (See fig: 1, a comparative study of appraisal techniques used by 100 large UK businesses Upchurch, 1988 p.p.337). The reasons behind this are as follows: Simple method available to compute It acts as proxy for risk Provides a crude measure for liquidity-can be useful in a business where liquidity is a problem. The problem with most of investment appraisal methods is risk in capital budgeting, as most of the data used in dec ision making are based on estimation. Most of the data are derived for the later year of a project further from todays value of cash flow this make it less reliable. In a payback period in this respect it tells a manager how soon the project cash inflow covers its cash outflow. The quickest the money can be recovered back the better the project to embark to and most of UK managers are rewarded after a quick return. In this case Jebb Plc need to be risk averse and will decide on the project which have lower value for PP. Despite of favourability to PP there are strong arguments against it as follows: Cash flows are regarded as pre-payback or post payback, but the latter tend to be ignored. It ignores the time value for money. This is sufficiently serious for it to be rejected as an indicator of whether a project increases the value of a company, it takes no account of the effect on business profitability, its sole concern is cash flow. Ignores the risk of future cas h flow Takes no account of what is happening with interest rate Accounting Rate of Return- ARR Accounting Rate of return also called ROCE and ROI expresses the profit arising from a project as a percentage of the initial cost. The method look at annual accounting profit rather than cash flows. The calculation has shown differently in different textbook, however one of the most common approach is this one: ARR = (Average annual revenue / Initial capital costs) * 100 The average investment is given by: (Cost + disposal value) / 2 The rate of ARR obtained using the method is compared with a pre-determined hurdle rate and the project with greater return would be acceptable. Example if the ARR method gave ARR of 17% and the firms hurdle rate was 13% then a project does worth. The method can also be used to compare the worth of more than one project, by opting the one with the highest rate of return. Advantages of AAR As we have seen with pp, the chief advantage of ARR is simplicity. The percentage value given make it easier for business planner to understand, and make it easier for manager to understand It shows investment profitability The value in % can easily be compared with hurdle rate r with the companys existing ROCE and to compare mutually exclusive project. It consider all cash flows over the life of a project (unlike PP) Disadvantages of ARR Despite its usefulness ARR method has got a number of criticisms as follows: Uses accounting profit (and not cash) which can be manipulated (e.g. by changing assumptions about scrap value and hence annual depreciation charges. Uses average profits therefore does not take into account the timing of profits (earlier profits may be preferred to later ones) Ignore qualitative aspects of decision. There is no definitive signal given by the ARR for managerial decision whether to invest or not. The lack of guide for managers makes it subjective rather than objective. Doesnt consider how long recover in initial investment and cost of finance may take. DISCOUNTED CASH FLOW (DCF) We have seen Traditional methods of investment appraisal which are PP and ARR. Now I will discuss DCF, the differences between this with the earlier methods are its consideration of the time value. These two techniques take account of all the costs and benefits (in cash terms) over the life of project and take into account the timing of the cash flows and benefits over the project life. As with the payback method, DCF analysis is based on cash flows not the accounting profit or losses. The timing of cash flows is taking into account by discounting them to a present value (PV) Internal Rate of Return (IRR) IRR is the annual percentage return achieved by a project, at which the sum of the discounted cash inflows over the life of the project is equal to the sum of the capital employed. OR It can be defined as the rate of interest applying to a project at which its net present value is precisely zero. The calculation shows us the break-even financing cost. The method in some senses seems to be simplest of the technique to understand. However it is the most difficult to cope with mathematically. A number of text and surveys has shown that, practically IRR method is more popular than the NPV method. This is said may be IRR is straightforward. Decision to accept a project is made when IRR is greater than a companys cost of capital or target rate of return. Disadvantages of IRR Notwithstanding its popularity in the business world, IRR bring about many problems than a practitioner may think. IRR gives unrealistic rates of return, this is the main problem of IRR. So unless the calculated IRR is a reasonable rate of reinvestment of future cash flows, it should not be used as a standard for comparison to accept or reject a project. Moreover IRR method may give different rates of return. Also IRR cannot be used to rate mutually exclusive projects. Net Present Value (NPV) NPV is a the Investment Appraisal tool/technique, where cash inflows expected in future years are discounted back at the appropriate discount rate to their present value. NPV has also been defines as The difference between the present value of the cash inflows and the present value of the cash outflows associated with an investment project (McGraw-Hill Ryerson 2001). A positive NPV provides cash flows from the Capital investment which yields a return in excess of the cost of finance/capital. Jebb Plc will treat +ve NPV as an attractive project which will help in decision making. If the NPV is -ve, cash inflows from the capital investment will yield a return below the cost of finance/capital from a finance perspective, the project is unattractive. If the PVC is exactly zero, cash flows from the capital investment will yield a return exactly equal to the cost of finance/capital, the project is therefore about financially attractive. Jebb Plc will use NPV as one of i nvestment appraisal tools to measure how much value is created or added today by undertaking an investment. In this technique Jebb Plc will accept to embark into a project if the net present value is positive and likewise rejected if it is negative. For mutually exclusive projects Jebb Plc will accept the one with the highest NPV value to maximise shareholders wealth. Advantage of NPV The following are some of benefits of using NPV which will be considered by Jebb Plc as an aid in decision making. NPV recognises the time value of money reflected in the discount. This is a key concept in corporate finance. It must be recognised that  £20,000 received today is worth more that  £20,000 receivable at some point in time in the future because  £20,000 received today could earn in the intervening period. This is known as the time value of money concept. The technique takes into account the risks involved in an investment through expected cash flows and/or discount rate. NPV offers a degree of flexibility and depth, since the equation can be adjusted for inflation and can be used with other financial tools such as Scenario analysis and the Monte Carlo simulation. Take account of both amount and timing of cash flows over the whole life of the project Has a direct relationship to shareholder wealth (positive NPVs increase it, negative ones decrease it). Disadvantages of using NPV Despite the above advantages, NPV have a number of problems of which Jebbs Plc needs to be aware. Here are some of the problems:- NPV looks at cash flows and not at Profit and Losses. NPV is highly sensitive to discount percentage, this makes it difficult to identify an appropriate discount rate. Choice of discount rate is one of the critical factors in NPV calculation the other factor is Quality of forecast cash flows. Using a standard discount rate where all projects are discounted using a standard rate, despite their different risks, may undervalue or overvalue the project, decreasing the overall accuracy. NPV does not compare absolute levels of investment. All in all DCF method is preferable to either PP or ARR because DCF takes account of the time value of money, and thus will maximise shareholders wealth. And NPV is the most acceptable technique compared to others. 4. GEARING Jebbs Plc investment will only be worthwhile if the expected return on capital employed will be greater than the cost of capital. The cost of capital is the return to the providers of finance to a business. Cost of capital can also defined as the cost of capital is the rate of return that a company has to offer finance providers to induce them to buy and hold a financial security. This rate is determined by the returns offered on alternative securities with the same risk Arnold, G (2008) Corporate Financial Management, Harlow: FT Prentice Hall Jebb Plc needs to make the right decision when taking a loan to finance its project by reducing a cost of capital and hence reducing gearing ratio. The gearing ratio this is the percentage of capital financed by debt and longtime finance. The higher the gearing, the higher the dependence on borrowings and long-term financing. And the lower the gearing ration the higher the level of dependence on equity finance. Before we see the p otential effects of higher gearing on perceived risk and cost of capital lets see 2 schools of thought in capital structure Theory of Capital Structure-2 School of thought There are two schools of thought: Traditional-Traditionalist believes that capital structure is very important That business should seek to establish the optimal mix of debt and equity (optimal capital structure), where the cost of capital is minimized and the value of the business is maximized. Modernists (Modigliani and Miller-MM) theorem believe capital structure it is irrelevant. Capital structure-Traditionalist view It regards the cost of capital to be cheaper than equity, following a lower risk for the borrower and tax advantages for the company. This implies that the overall cost of capital can be reduced by increasing the level of borrowing (of gearing). However as the level of borrowing increases the return required by ordinary shareholders also increases to compensate for the higher level of financial risk they have to bear. At low level of borrowing the benefits of raising further debt (cheap source of finance) should outweigh the costs of doing so (increased return to shareholders and existing lenders) For highly geared companies, the costs of further increases in debt will outweigh the benefits. Capital Structure Modigliani and Miller MM argue that the benefits from raising debt finance are exactly offset by the increased return required by shareholders over the whole range of borrowing. Therefore the overall cost of capital remains constant at any level of gearing and there is no optimal capital structure. Capital structure is irrelevant and changes in it do not affect the value of a firm. Modigliani and Miller (1958). The following are assumptions lied behind MM theorem. There are no taxation There are no costs involved in changing capital structure such as issue and dealing costs. There is one rate of interest that applies to both borrowers and lenders. In addition MM assumed that the capital markets are efficient and perfect. The first assumption is the most critical and led MM to revise th eir theory after criticism in 1963 to incorporate corporation tax. To conclude the link between cost of capital and gearing level is not direct and proportional. A company should look into all the associated factors like tax implications, risk, bankruptcy, agency costs, cost of serving the debt, in deciding its capital structure. In the real World at low level of borrowing the cost of capital will decline and gearing increases. Eventually at higher levels of gearing, the cost of both debt and equity will shoot up due to bankruptcy and agency costs, causing the overall cost of capital to rise also. Atrill, P (2009) 5TH ed. Financial Management for decision Makers, Harlow: FT Prentice Hall Potential effects of higher gearing The higher the ratio of debt to equity the riskier the company is from the ordinary shareholders point of view. Some investors might decide to withdraw their investment if the company has high gearing as it rating will go down. Agency costs involved in monitoring and controlling actions of manager to avoid company experiencing financial difficulties. Tax exhaustion: The task benefit relief will be lost. If the company has very high gearing due to lack of taxable income to offset against the tax relief and also affecting the operating income. CONCLUSION Capital budgeting is a crucial managerial tool. Jebb Plc is required to choose investment with attractive and sound cash flows and rates of return. Jebb Plc will use capital budget to evaluate, compare and select attractive project. The investment Appraisal techniques will also help Jebb Plc management to know whether the project under review is attractive one risky one or a safe one. In this case NPV is recommended however should be seen as a starting point in any decision making rather than the decision by itself. In choosing these techniques Jebb has to consider both financial and non financial factors. Jebb will also make the right informed decision when taking a loan to finance its project by reducing a cost of capital and hence reducing gearing ratio. This will reduce risks as borrowed fund is attached with interest which has to be paid irrespective of business performance. REFERENCES BBC News Online Richard Pettinger: Investment appraisal- managerial approach. Neale, B and T McElroy (2004) Business Finance a Value-Based Approach Arnold, G (2008) Corporate Financial Management, Harlow: FT Prentice Hall The Journal of Finance Vol. XLVI No. 1 March 1991 Michael Parkin et al.Economics 5th ed. (2003) Alain Anderton Economics (1999) 2nd ed

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The Absolute True Diary of a Part Time Indian Free Essays

One thing Arnold does not do is complain. Even though he was â€Å"born with water on the brain†, gigantic feet, ten more teeth then normal, stutter and a lisp, Arnold still doesn’t complain though. Just because he does not complain does not mean he loves the life he was given. We will write a custom essay sample on The Absolute True Diary of a Part Time Indian or any similar topic only for you Order Now Junior still thinks life would have been much easier if he was white. He tends to put himself down quit often. Alexie Sherman illustrates what differences there are between the Indians and the white people. Indians covered their private parts with their tiny hands† (Alexie 11). Saying that Indians have tiny hands indicates that the whites had bigger hands therefore meaning that they were more powerful and/or superior over the whites. Another thing Alexie Sherman shows the readers is that Arnold has very low self-esteem because he’s used to people calling him retarded so often that he starts to believe he really is. And then you’d be wondering why you’re reading a story written by uch a retard† (Alexie 4). It shows that Arnold doesn’t have that much confidence in himself and he believes Indians are treated the way they are because they deserve to be. Alexie Sherman is saying that Indians don’t be live that white people are truly better then Indians. â€Å"Some Indians think you become white if you try to make your life better, if you become successful† (Alexie 131). This shows how Indians have lost all hope for themselves and that’s probably why they don’t even ry to make their lives better, because no matter what they do they still aren’t as good as the Indians. Some of the Spokane Indians believe if one Indian becomes successful then he is no longer an Indian but instead a white. In conclusion Alexie Sherman uses alot of metaphor does/says many things to express how the Spokane Indians feel about themselves and how they have low self-esteem. And because of this many Indians think they can’t get anywhere far in life. How to cite The Absolute True Diary of a Part Time Indian, Essay examples

Toni Morrison Biography Essay Example For Students

Toni Morrison Biography Essay Toni Morrison was born named Chloe Anthony Wofford, on February 18, 1931 in Lorain, Ohio. She was the daughter of Ramah and George Wofford. When Morrison entered the first grade, she was the only black student in her class and also the only child who had already learned to read. She eventually graduated from Howard University in 1953 with a degree in English, and later earned a masters degree from Cornell. Friends at college started calling her Toni because of her middle name. Morrison returned to Howard University to teach English in 1957, after two years of teaching at (TSU) Texas Southern University. While teaching at Howard she met and married a Jamaican architect, Harold Morrison. Together they had two sons, Harold Ford and Slade Kevin. In the following years she joined a writers group in which she wrote a short story about a little black girl who wanted blue eyes. She eventually developed that story into her first novel, The Bluest Eye. We will write a custom essay on Toni Morrison Biography specifically for you for only $16.38 $13.9/page Order now In 1964, Toni and Harold Morrison divorced, and Toni moved to New York with her two young sons. She began working as a book editor at Random House in 1965. Over the next 20 years, Morrison moved into a senior editorial position with the company and shepherded the literary efforts of a number of prominent African-Americans, including Muhammad Ali, Angela Davis, Andrew Young, and Toni Cade Bambara (Morrison). Morrisons novel The Bluest Eye was published in 1970 but did not seem to sell well. She had more marketable success with her second novel, Sula in 1973, the story of a close friendship between two women in a Midwestern black community called The Bottom. With her next novel, Song of Solomon in 1977, Morrison switched her viewpoint towards the African-American man, named Milkman Dead, who takes a journey south from his hometown in Ohio to learn more about his family history. It became a paperback bestseller and won the National Book Critics Circle Award for fiction. Tar Baby published in 1981, is a passionate tale of class, racial, and sexual conflict set on a Caribbean island, and which it stayed on bestseller lists for four consecutive months. Morrison left Random House in 1983 to concentrate on her writing and teaching careers. In 1987, she published Beloved, the story of a former slave, Sethe, who is haunted by the ghost of her murdered daughter and is visited by a strange, beautiful young woman calling herself Beloved. The novel won international acclaim, including the Pulitzer Prize for fiction, and it permanently established Morrison in the upper echelon of twentieth-century authors (Morrison). Morrison often compares writing in this era to writing while a war is taking place. Her refusal and fearlessness to sugarcoat the truth on the page is what I think makes her prose some of the best around. On writing she has said â€Å"I’m sometimes frightened of what I write, but I can’t look away. I will not look away. That’s the one place where I’m going to, you know, make eye contact. It’s a free place for me. It’s not always safe, but that’s the one place where all my little vulnerabilities, and cowardice, cannot come to the surface† (Hedge). In 1987, Morrison became the first black woman ever to hold a chair at an Ivy League school like Princeton University. She published Jazz, a novel about the stunning 1920s Harlem world. A sequence of personal tragediesincluding the death of her mother and the destruction by fire of her home in Grand View-on-Hudson, New Yorkwas lightened by professional success in 1993 when Morrison was awarded the Nobel Prize in literature. She was the first African-American, and only the eighth woman ever to be named a Nobel laureate, which is the highest honor in the field. Morrisons continuing popularity became evident in 1996, when Song of Solomon resurfaced on bestseller lists after a little help from one of her more powerful fans, Oprah Winfrey, who also starred in the 1998 film version of Beloved. In 1998, Morrison published her seventh novel, Paradise, which is set in a black utopian community in Oklahoma. Toni Morrison now lives in Princeton, New Jersey.