DuPont Case Analysis Essay

INTRODUCTION: DuPont was established in the year 1802 by French Chemist, E.I DuPont de Nemours in USA. DuPont became successful by the end of third year and it started exporting back to its continent, Europe. In the span of these 200 years, it had shaped into a global company with variety of enterprises like Chemical, Energy, Science Based and High Technology. It maximized its manufacturing or processing operations in 40 countries and its products were sold in 150 places by the end of 1990. The company’s one third revenue comes from the European market from 1960. There are 50 companies, which employed more than 19,000 people in 14 countries of Europe. The scientists of DuPont developed the synthetic fibres industry by introducing nylon. They were the leading manufacturer of manmade fibres in the world. The most important product of DuPont is â€Å"Carpet Fibre†. This division was setup in Geneva, Switzerland which holds the R&D, marketing and production areas. Products were produced in the UK and the sales offices are in Germany, the UK, France, Belgium, Spain, Scandinavia, and Holland. CASE CONTEXT: DuPont’s product nylon carpet fibre is not different from other fibres available in the market; however they were the top players in fibre industry. The parameters like color and texture are the factors that differ in the carpets. The fibre industry has nothing to do with these things. The carpet industry is concerned with these directly and they in turn led to the wholesalers, retailers and in turn to the customers. From the consumers point of view the carpet should be colorful, its texture is important and it should be easily maintained. DuPont has done extensive research on the customers third interest i.e. maintenance and founded the â€Å"Stain Master† that would allow to remove the stains permanently. With this invention, DuPont’s market share increased by 5%. This was first introduced in USA, later on with minor changes it has been launched in Europe. It gave mixed results for the company. DuPont’s decision is that the mills should have certain quality to use the process of stain master. In Germany, many mills felt that they don’t have these standards set by them; hence they didn’t show interest in the product. The UK market and France market reacted positively. Many companied executed the same formulae by giving low quality material at lower prices. This led to the stake of DuPont’s position in the market by 1980. FACTS: DuPont conducted research in the European Industry after the decline of its position in the market. They came to know some important facts: Flow of DuPont’s Fibres: DuPont’s Fibres Carpet Mills Wholesalers Retailers End Users The carpet mills are concentrated in only three countries the UK, France and Belgium. 80-20 rule is applied in European market; 80% of the business is carried but top 20% manufacturers. To stimulate the market, they used the help of Style Books to the wholesalers and retailers. They were not loyal customers to the fibre industry. They focused on the company that provides material at the best price. Retail and Wholesale operations are very different in these countries. In Germany  wholesalers dominated in the UK and Belgium retailers dominated the supply chain. PROBLEM: DuPont concentrated only on the carpet mills and they didn’t make any effort in knowing the end users. They invested money in R&D for making innovations in fibres that is to be supplied to the carpet mills. They are least bothered to know about the customers. ALTERNATIVES: DuPont need to concentrate on the techniques that value the customers without affecting the supply chain. As carpet mills are the important customers to DuPont, they need to retain them. â€Å"Creating loyal customers is at the heart of every business†-Don Peppers and Martha Rogers. Identify the â€Å"Customer Benefit† and â€Å"Customer Cost† of the users and provide the product at â€Å"Customer-perceived value† (CPV). Monitor the satisfaction of the customer by conducting surveys. ANALYSIS OF ALTERNATIVES: In Europe, there are 60 carpet mills that can level DuPont’s standards; however only 50% of them are using their fibres. Rest of them wandering around for best price. The mills using DuPont’s fibres should be retained and they need to analyze the CPV value and set the â€Å"price† accordingly. The â€Å"place† is also very important for setting the price as European market is fragmented unlike USA market which is having only four players. The customers give least preference to carpets when they are buying house- hold equipments. They are not enjoying or admiring to shop for carpeting as it is just a blanket to protect the floor. Customers spend at least 10 weeks in buying the carpets.52% Customers buy carpets if the existing one is worn out. Repurchase cycle for carpets is 12 years. Customers are not satisfied with the product information. The retailers and wholesalers are not providing full information. They are not providing information on price, color, fitting rooms and quality. If â€Å"product† and â€Å"service† quality is maintained, customers would retain with them only. They didn’t â€Å"promote† their products. RECOMMENDATIONS: Retain the customers by giving them offers that attracts them easily. Provide sample fibres to 50% carpet mills that are not using DuPont’s material and offer a price that satisfy their needs. Provide a portal for the customers to choose their own color and design according to their choices by collaborating with mills. Provide better customer care services by training the retailers and wholesalers. Provide catalogues to the customers for better awareness of the product, whether it is retailer, wholesaler or final end user. PLAN OF ACTION: Identify the customers who are loyal to the company, give them incentives and promote the product brand. Select the location where sales of the company are not up to the mark and apply the alternatives to them i.e. setting price and giving offers to the carpet mills. Later on collaborate with the mills in that location and train the wholesalers and retailers about the product and give them the full information along with the catalogues. Provide better services to the customers by setting a portal where they can choose their own designs and place order to the carpet mills. Implement the above mentioned steps for three months and find the sales growth. Spread the plan if it worked in the selected location, by making minute changes to it according to the location. CONTINGENCY PLAN: Since DuPont is an expert and leading manufacturer in the manmade fibres, it can go for â€Å"VERTICAL INTEGRATION†. Instead of supplying fibres to carpet mills, it can set up a mill and manufacture carpets. It can directly deal with the customers. The above mentioned plan can be executed without the intervention of the mills. The Customer Satisfaction can be monitored and it can get to know the loopholes in the process and thus leading to correction of the mistakes and increasing the sales growth of the company.

Tent and Board Games

My camping trip My camping trip was a very bad experience. A friend's brother was planning to go to camping for a weekend, and they invited me. We were excited because we thought would be fun. First, we made a list of everything we would need, packed our suitcases and started our way. The weather was bad, but my friend's brother decided to go no matter what. First, the road was in a poor condition. It was so bad that I threw up twice! Second, the location where we were going to stay for 2 nights was terrible.I lready felt bad enough due to the road, and when I saw the place, I realized that I wanted to go back home. Nevertheless, we decided to stay in front of a big tree and made a bonfire between the camping tents. My camping tent was on the left and the other one was next to us. After a while, everyone went to sleep. Third, I was attacked by a snake at midnight. I felt something crawling on me; I Jumped up and started to scream. Everyone woke up and went to my camping tent to see w hat was happening. There was a snake inside my tent and creeping on me! I was so scared and no one knew what to do.My friend's brother killed the snake with a sharp stick. After that, I could not sleep anymore. The next day, we played board games, listened to music and walked across the forest. While we were walking, I saw an iguana at the top of a tree. Soon we came back to our place because it started to get dark. We talked for a few hours and went to sleep. Finally, to make things worse, it rained so badly that the camping tents came down. We spent the rest of the night under the tree. When the sun rose, we left the place to go back home. In conclusion, my camping trip was a disaster.

Bio-Polymer Chemistry Assessment Task

Production of Materials: Chemistry Assessment Task Part A: Biopolymers Definition: The term â€Å"Biopolymer† refers to polymers that are produced by living organisms. Since these are polymers, biopolymers contain monomeric units that are covalently bonded to form larger sructures. Biopolmers are divided up into 3 main classes. These are: Polynucleotides (which include RNA and DNA), Polypeptides ( short polymers of amino acids) and Polysaccharides. Examples of some Biopolymers include: Cellulose, Starch and Proteins. Source: http://en. wikipedia. org/wiki/Biopolymer#Polypeptides Biopolymer: Polylactic acidFormation: PLA is produced from a renewable source. For example corn. Corn is harvested and then milled to extract the starch from the raw materials. From the starch, dextrose is produced. The dextrose is then fermented, transforming into lactic acid. The lactic acid is altered into a polymer by the process of condensation, then forming long chain molecular compounds into pol ylactic acid. The organism is Lactic Acid. Source: http://www. hitachi-pt. com/products/ip/process/pla. html Properties and Uses: Being able to degrade into lactic acid, PLA is used as medical implants in the form of screws, pins, rods and as a mesh.PLA can also be used as a compostable packaging material. Cups and Bags have been made out of PLA. In the form of film, PLA shrinks upon heating allowing it to be used in shrink tunnels. PLA is also useful for producing loose-fill packaging, compost bags and disposable tableware. PLA can also be used in treatment in the body. Depending on the exact type used, it breaks down in the body within 6 months to 2 years. This degredation is desirable for a support structure because it gradually transfers the load to the body as the organ heals.Source: http://en. wikipedia. org/wiki/Polylactic_acid#Manufacturers Assessment: The impact of PLA on the society is that due to the high demand or PLA products from resources such as corn, corn growers ha ve been tampering with the genes of the corn to produce higher yields in order to suffice the demand. Even though PLA is biodegradable it still takes at least three months in a controlled environment to properly break down into it’s components. However it is estimated to take 100 to 1000 years to decompose in landfill.PLA is also from a different origin than regular plastics, therefore it needs to be kept separate when recycling. PLA is an alternative to the common plastic bag or plastic cup since it can be recycled which can be useful to the society. Source: http://www. scientificamerican. com/article. cfm? id=environmental-impact-of-corn-based-plastics Judgement: Even though PLA is an alternative to common plastic due to it being recyclable and biodegradable, PLA still needs to be refined to make it more efficient to produce, be cost effective and to be able to degrade at a much faster rate.Part B: Batteries Sources: Vertex Learning Centre: Book, HSC chemistry, Vertex Learn ing Centre: Book, Production of Materials Section 6 and 7 Button Cell Plastic seal Zinc case Graphite rod Electrolyte Negative terminal Positive terminal Plastic seal Zinc case Graphite rod Electrolyte Negative terminal Positive terminal Leclanche Cell (Dry Cell) Sources: http://www. comf-hk. com/zcart/index. php? main_page=page&id=3&chapter=1 Leclanche Cell diagram- 4. 6 cells and batteries word document By Bernard Broekhuizen

Technology and Innovation management Essay Example | Topics and Well Written Essays - 500 words

Technology and Innovation management - Essay Example The best example for the creation and disappearance of industries due to the emergence of new technologies is manifestation of the many technological changes in the music industry. The topic also defines strategic management as an ongoing process upon which an organization aligns itself to meeting the challenges brought out by the changing environment. I have learnt that this part of the topic is much related to IT networking administrator, my place of work. As an IT networking administrator, I see the dynamic nature of technology and innovation as something that will require me to constantly keep in touch with it. Consistent with the tenets of strategic management, as an IT networking administrator must implement policies that will lead to meeting the objectives of the group. Part II of the topic is concerned with how firms create new technology, processes or products to meet their internal objectives. The topic asserts that though process innovation is difficult to implement, firms should strive to develop or make improvements in their systems and process to make it a reality. Further, the topic points out that leadership, engagement, and extension are the main elements necessary for effective implementation of an innovation. As noted by Ashton, Metzler & Associates (n.d) an IT networking administrator need to be in a position that is up to date with the current innovation. As an IT networking administrator, I see myself as a leader who needs to integrate leadership qualities, engagement and extension into my day-to-day operations for my career to be successful. This part of the topic asserts that planning process is normally affected by the external method used by a given business. In addition, the topic points out that for proper implementation of an innovation, a firm requires to address the four primary elements, which include execution, leadership, integration and

Analyzing Market Segment Opportunities Essay Example | Topics and Well Written Essays - 750 words

Analyzing Market Segment Opportunities - Essay Example Recreational Tennis Players play tennis for fun with their families and friends, say at clubhouses, at homes, at schools, and other private tennis instillations. Therefore, these players do not have the ability to go for the most professional racquets for playing the game. Most of them merely settle for any racquet that can enable them play and enjoy the game. However, other recreational players are staunch lovers of the game. They do not play tennis professionally because they have other priorities in their lives, e.g. as professionals in other fields such as medicine, business and finance (Lipsey, 2006). Nevertheless, these players put all their efforts during free times to play tennis both professionally, i.e. in small local tennis leagues or with friends, and for fun. Consequently, they are more particular about the racquets they while playing tennis. In this case, they are always willing and able to part with a significant amount of their income to purchase a good tennis racquet . Prince Incorporation can reach out to these recreational players through social media sites such as Facebook and Twitter. Social media sites are the most common place where these players converge to read news about their favorite tennis players and their performance in various league games. They prefer emulating their ‘tennis idols’ by using similar racquets as those used by professional players (Babin & Zikmund, 2012). (b) Junior players Junior tennis players are those players who are still in colleges and high schools. These youngsters have a passion of playing tennis in future whether professionally or otherwise. They have tennis idols who are professional tennis players whom they look up to as their role models and hope to be like them when they grow up. This is the stage where most youngsters develop their talents in playing tennis. However, the only hindrance for these players in exploiting their passion for tennis is the fact that they cannot afford to purchase the tennis racquets they fancy or wish they could have. This is because most of them cannot accumulate enough savings from their pocket money to purchase these racquets. In addition, their parents or guardians might not be willing to part with significant amount of money to buy them a professional racquet, especially if they are not that talented (Stevens, 2012). As such, professional racquet companies such as Prince Incorporation can reach out to this segment of tennis players either through their parents or through their schools and colleges. They can collaborate with schools as well as other learning institutions to sponsor inter-school tennis competitions, or set up promotions for young tennis lovers within learning institutions. This will enable them reach out to a large number of students, i.e. the junior players, who will get to know of the existing racquets on offer by the company and how much they cost. In fact, they may even get to test some of these racquets during these promotional drives. Apart from schools and learning institutions, these companies can also market their products through established companies where parents and guardians of these children work, or spent their social time. In addition, broadcast media also provides a lucrative platform for these companies to reach out to their clients (Lipsey, 2006). What might Prince do to help it gain distribution and sales in (a) Mass merchandisers like Target and Wal-Mart Mass merchandisers of tennis racquets such as Wal-Mart and Target already have a brand name in which they trade in. This brand name enables these stores to market their pro

Operation and Technology Management Essay Example | Topics and Well Written Essays - 750 words

Operation and Technology Management - Essay Example The M&S products are not according to the changing trends in fashion industry. Main reason behind this is that the supply chain of M&S is weak as compare to the industry. Though it has a well defined supply chain process but it involved too many steps. The value chain steps of M&S are almost double of their major competitor i.e. Zara. Zara has become very dominant in fashion industry due to its frequent and rapid launching of new stylish apparels (Ghemawat and Nueno, 2006). M&S have approximately 12 months lead time for each seasonal collection which is considered as very long time span as the fashion industry has become very fast in launching new apparels. M&S outsources some of key activities of their value chain to the regions where raw materials and labours are cheap. This shows that company does not manufacture the complete products all in one place and it takes long time for them to manufacture apparels. Furthermore, the quality control process of M&S is very thorough and they also spend much time on this process. The fashion industry is evolving at rapid rate and the clothes and products become obsolete within no time because of the changing needs of the customers. Therefore, the company needs to introduce stylish products frequently and rapidly in order to participate in fashion game. For that purpose, they need to make supply chain efficient. Another factor, which hinders the participation of M&S in the ‘fashion’ game is launching of season apparel only. They produce few products a year which are in Spring/summer and Winter/Autumn. Their competitors such as Zara and H&M have moved away from this technique and offer many new clothes in different styles all over the year according to the customer taste (Arrigo, 2010). The companies operating in the fashion industry are based on three main elements or factors i.e. designers, market specialists and customers. M&S have separate work place for each factor and is not able to

Greenomics Marketing Strategy Research Paper Example | Topics and Well Written Essays - 750 words

Greenomics Marketing Strategy - Research Paper Example According to the research findings, it can, therefore, be said that Greenomics has a strategic plan of becoming a successful business that is strongly expressed in its mission statement, financial and non-financial goals and its competitive advantage. The mission statement is to achieve luxurious interior designing the greenway, and the financial objectives are to break even in the first three months and to increase sales by twenty percent after every three months. The marketing programs will support this strategic plan and other key features like company uniqueness, adjusting to market conditions, trends and changes in the following ways: - Making it possible to achieve break-even position in less than three months through effective pricing and financing strategies; - Providing chances to develop eco-chic offices and stores that are fashionable, high performing, luxurious, reliable, not over-priced and eco-friendly;Â   - Strict management of the brand; Greenomics through strict adh erence to price and quality issues; - Creating awareness concerning how the environment is being destroyed and how it is encouraging global warming; - Carrying out effective consumer analysis programs with an emphasis on customers who have an interest in saving money on the power bill in the long run.

Exam Questions Essay Example | Topics and Well Written Essays - 4000 words

Exam Questions - Essay Example Line managers maintain the arduous role of ensuring that employees are achieving performance targets, focusing on proper planning, scheduling and generic supervision to ensure compliance to corporate policies. However, when line managers take on the role of providing HR assistance, they become much more psychologically involved with employees to improve their dedication and motivation. Consider an organisation with a structured production system governed by traditional line management. In the role of HR provider, the line manager goes beyond the work schedule and efficiency measurement, becoming a strategic partner with the human resources division to create value rather than merely productivity. Research in human resources identifies that employee empowerment is one of the most fundamental methods of gaining their commitment and motivation. Empowerment strategies give employees more flexibility in taking active roles in corporate decision-making, thus giving employees a perception o f control and prestige within the organisation. According to Yusoff (2008) when employees are granted more authority, it becomes easier in the long-run to ensure discipline and control. Line managers have the most frequent contact with employees and thus act as the intermediary for team development. Line management has more intimate knowledge of employees’ attitudes, lifestyle preferences and skills capabilities than that of the HR manager due to their close proximity in the production (or non-production) environments. This gives line managers a unique ability to utilise many different HR theories to ensure that they become more like coaches or mentors than simply authoritative line managers to assist in developing employees’ core competencies. For instance, in a production environment, there is a constant demand for change. Change comes in the form of new technology implementation or systems process restructuring in order to meet cost or strategic-based performance or output goals. The line manager acting as an HR facilitator can become more active in training provision, giving employees hands-on tacit knowledge that can be transferred for better organisational learning and knowledge exchange. According to Bambacas and Bordia (2009, p.225) when training is provided that is perceived as being non-transferrable to another business, it becomes too costly for the employee to leave in pursuit of different employment. Traditionally, the HR manager handles the process of developing and implementing training packages. However, when involving the line manager, the management team can provide a distinctly different element to ensuring employees have the knowledge and skills to accept and embrace changes in the work environment. Line managers hold intimate knowledge of the systems that drive organisational productivity and can thus take this self-contained, tacit knowledge and disseminate it directly through concrete and applied training; something not ach ievable with the HR manager who is not personally familiar with operational systems. The line manager empowers employees, establishing a sense of group belonging in the team, constantly reinforcing that uniqueness of the training packages to gain a psychological advantage over employees. By using both line

Ciba-Geigy Case Study Essays for MBA Strategy Subject Essay

Ciba-Geigy Case Study Essays for MBA Strategy Subject - Essay Example The principle markets for this segment comprised of North America, Western Europe, South East and Japan. The industry consolidated, following the oil crisis in the 1970’s, and had become increasingly competitive with high entry and exit barriers requiring environmentally sound production techniques and high investment. But, Ciba, in spite of the adverse market conditions, on the strength of its innovative products had managed to achieve steady growth in its pigment business making pigments a strong performer within the industrial divisions. Some of the biggest customers of Ciba were in America and Japan, and during the year 1994, U.S. sales accounted for approximately 40% of its total sales for HPPs, besides, Ciba was the second largest employer in the state of Delaware, which added to the several strengths of the company and strengthened the argument in favor of investing in the Newport plant project. According to the portfolio planning initiative that took place in the year 1994, under the guidance and leadership of Verena Laanio, certain categories were designed and developed which aimed at serving three main functions: first, to serve as a resource allocation device, second, to manage the overall portfolio in terms of cash and growth; and third to provide management focus on the appropriate key success factors for each stage in the lifecycle. According to Ciba’s portfolio planning guidelines for core businesses, the Pigment’s division was responsible for increasing cash flows by about 50 million Swiss francs per annum, thus satisfying the company’s primary target. Secondly, Ciba’s pigment division head, Mark Schutz, assured the management of maintaining the required levels of 10% RONA, which at its very worst would dip to 6%, satisfying the second target set by the company. After the company’s reorganization, its businesses were divided into 33 segments which were further sorted into five categories;

How Sweden's Accounting Financial Statements and Functions Research Paper

How Sweden's Accounting Financial Statements and Functions Differentiate from That of the USA - Research Paper Example It is evidently clear from the discussion that while most nations shifted to the latest version, the United States still favors GAAP and believes that the IFRS has no guidance and comprise several loopholes. It also believes that the adoption of IFRS will lead to chaos and several accounting scandals. Sweden, on the other hand, being a part of the European Union has adopted the IFRS as IAS regulation from the year 2006. Prior to the year 2006, Sweden had been following SFASC (Swedish Financial Accounting Council) Accounting Standards. A lot of changes have been brought about in the financial system throughout the years in Sweden. But with the acceptance of IFRS in Sweden quite a few changes and amendments have been made in order to marginalize with the other nations of the European Union. There have been a lot of differences between the US GAAP and the IFRS. One strong difference between the two is on account of the intangible considerations. According to the GAAP, the acquired intan gible assets are always recognized at fair values. Even the cost allocation is done on individual assets. The intangibles also have a definite life amortized over the period. Few of the examples of such individual assets are research and development, advertising costs; start-up costs and even website developments. Whereas according to the guidelines of IFRS followed by Sweden, the intangibles are recognized only if it has a scope of future economic benefit and has reliability in measuring. Even the initial measurement is done on the cost of the intangible. The mergers and acquisitions i.e. the intangibles are valued at fair cost and the revaluation is also made on a regular basis in order to obtain the actual cost. There is a vast difference between GAAP and IFRS on the basis of revenue. In case of the GAAP, the revenue is recognized on four essential criteria that are persuasive evidence, determinable or fixed pricing, delivery and the assurance of collection whereas in the case of IFRS, the major five criteria are transfer of risk and reward, reliability of measurement, reliability of measurement of the costs incurred or to be incurred, non continuation of management involvement and it also considers the probable economic benefits.

Human hand catching an object Essay Example for Free

Human hand catching an object Essay ANALYSING From this experiment I have found out that there are different factors that affect the resistance of a wire. The factors that I have investigated are the length and thickness of a wire. In the experiment, as the wire got shorter, the resistance decreased, and if the wire were increased then the resistance would increase too. If the thickness of a wire were to be changed then the thicker the wire, the less resistance and the thinner the wire the more resistance it will have. I have also found out that the resistance is calculated by dividing the voltage by the current. This calculation was used in my experiment and showed that the resistance is roughly constant. If some odd results were obtained, it was because at a low voltage the power packs are inaccurate and at a high current, we might gain a heating effect. Ohms law can be proved by the graph due to the fact that the graph has a straight line; therefore it has a constant gradient, meaning a constant resistance whatever current is passing through it, providing the temperature is constant. If the graph were a curved, then that would mean that the resistance was changing. If that were the case the resistance could be found for any point by taking the pair of values (V, I) from the graph and sticking them in the formula R= V/I. (Information obtained from physics revision guide. ) That would be disobeying Ohms law. In my opinion, the resistance of the 32- copper wire seemed odd since the thinnest wire is supposed to have the highest resistance. However a good conductor, which is what copper is, will allow current to flow through it easily. Therefore thats why the ammeter reading for the copper wire, which measures the current, was very high, compared to the reading of the other types of wire. A nichrome wire would have more resistance than a copper wire of the same size, because less current flows through it, making it not such a good conductor. We can also conclude that the thickest wire, type 26, had the highest resistance because less current could flow through it. EVALUATING: This investigation was conducted following the method above. By following those steps, I managed to obtain more than enough readings to plot a graph with and I managed to obtain accurate results, until the wire reached 30cm (TABLE 1). However my previous readings were fairly accurate, which were more enough for me to plot a graph with. I had seven readings when only 6 are needed to plot a graph. The results of the first experiment my group conducted, (TABLE 2) were much more accurate than the second one (TABLE 1). The resistance was very constant, however we did not complete the experiment. We planned to carry it on the next lesson, but it would not have been a fair test because we used a different power pack and the voltage was not the same. We found out that we were getting odd results to our previous ones; therefore we had to start the whole thing again. We made sure we finished that experiment and even had time to conduct another: an investigation to find out whether the thickness of a wire would affect the resistance. Since I only had to investigate five different wires, obtaining five results, this investigation was easier to conduct because there were fewer to do and I knew exactly what I was doing. It took me less time to set up the circuit and it was definitely a fair test. However when it came to the 32-copper wire the resistance was very high. I expected it to be high because it was one of the thinnest wires, however not that high. I suspect I either recorded the wrong reading or because at low voltage the power pack was inaccurate and at high current there was a heating effect. However, as I mentioned in the analysing section, there was a simpler explanation. From previous work, I remembered copper is a very good conductor, therefore the high current reading. In future if I conduct another similar experiment to this one there are some improvements that could be made: I could compare my results with other people to see if they got the same or near enough results. That way I would know whether I was on the right tracks. If I am stuck on connecting the circuit, I could draw a diagram first and follow that. I should finish every experiment the same day; so that I get more accurate results and can compare the results to the results of another experiment, on the same subject and would not have waste time having to start the same experiment again. I could have done some further research and find out what and if there are any other factors that affect the resistance of a wire and then I could have conducted an experiment.

Carmen Marinache Essay Example for Free

Carmen Marinache Essay Assuming complex businesses in which company is part of: organising logistics operations ( railway transportation from station of departure to station of destination, reception of wagons at final station of destination, unloading the cargo from wagons and loading it into trucks / handling, delivery up to the client’s terminal); organising special transports such as munitions transportation in transit via Romania; organising cargo exports from Romania with guard protection on route; organising oversized transportation, export from Romania to different countries, which implies: obtaining loading drawing from an authorised company, obtaining approval for transportation from the railways and infrastructure, issuing CIM railway bills, coordinating the transport with foreign railways on traffic and obtaining all necessary traffic permission by keeping in touch with all our external partners, solving problems that might occur while transportation is performed; organising exports from Romania to different countries from exCIS in special SZD wagons (wagons from CIS countries), obtaining all traffic permissions, keeping in contact with clients and partners for a prompt solving of all difficult situations; organising transportation of wagons on their own wheels as well as of locomotives; participating to organisation of multimodal traffic Ex: cargo coming by vessel, unloading directly or indirectly to wagons and customs clearance through a sister company specialised in port in such kind of operations), railway trans portation up to one station in Europe, unloading of cargo and delivery by trucks to consignee, etc. ? Keeping in contact with Accounting and Financial Dept. in order to mutually solve problems related to the financial part of the business; ? Based on the information received from the Controlling Dept. , analysing and proposing to the Executive Manager personal evaluation for personnel; ? Monthly analysing the activity of the Railway Dept. calculating estimated operational profit, calculating the total tonnage, presenting the situations to Executive Director; ? Contacting and visiting potential clients; ? Taking part to set up of transport and freight forwarding contracts with Romanian and foreign clients/partners ; ? Representing the company within international exhibitions and fairs, in Romania and abroad, to Express Interfracht Holding own stand, and within conferences having as topic the improvement of railway transportation; ? Issuing the documentation of company presentation and representing the company within different tenders opened by big production companies in Romania, in o rder to choose logistic supplier.

Becoming Successful: A Good Business Strategy

Becoming Successful: A Good Business Strategy Becoming a successful entrepreneur doesnt happen by accident or by chance. It is a long process that involves various strategies, characteristics and quality of person who wants to become a successful entrepreneur. Madan Paliwal who is a successful entrepreneur in his state, says Becoming a successful entrepreneur is not an easy task! There are certain qualities and strategies that are absolutely necessary if you would like to become successful in your business ventures. Madan Paliwals example shows that how some characteristics, qualities and strategies support to becoming a successful entrepreneur. He strongly believes in quality rather than quantities. According to Sharma (2009), It is essential to follow some strategies for the growth and strongly development of business. An entrepreneur organizes different types of industries right from inception has different approaches and call for an in-depth knowledge base. The importance is the entrepreneur starts and operates his own new b usiness. characteristic of An Entrepreneur Kant (2000), All the entrepreneur were men of discipline, high integrity and with strong need for achievement. In India Mr. Madan Paliwal CMD of Miraj Group of Industries has following characteristics and qualities which is important: Initiative: Mr. Madan Paliwal used resources and plan for his business. He started his business with Rs. 200 (Â £3) capital. Now Miraj Group of Companies capital cross Rs. 1000 Crore (Â £15000000). The following companies in Miraj Group of Companies: Miraj Products Pvt. Ltd., Miraj multicolor, Miraj pipe fittings, Miraj Hotels, Miraj Engineering, Eye view motion pictures, Miraj developers, Miraj realcon, Asia packs. (Group profile of miraj group) Miraj groups consumer products are tobacco, tea, soap, matches, plastic, stationary, pipes etc. Therefore we can say the entrepreneur should be initiative to use the available resources and plan for all those who are involved in an enterprise. Goal: An entrepreneur should be able to set realistic but challenging goals for himself as well as for others in the organization. At the time of beginning Madan Paliwal had clear goal and he has achieved maximum goal. Involvement for long time: Madan Paliwal started his business on 18th August 1987. He continues involve in his business. Hence commitment from the entrepreneur for longer period may be 5 to 15 years is necessary for conceptualization, building and running an enterprise. Capacity for problem solving: In the initial phases of an enterprise many teething problems may happen and an entrepreneur should be a creative problem solver to turn difficulties into advantages. Madan Paliwals life is full of struggle. He solved many problems in his business. Good team leader and motivator: An entrepreneur builds up his team; he should educate them, keep them on high level of motivation and also provide an environment for creativity and good work culture. Madan Paliwal started his business as a single person but now a days 1000 employees in his companies. Energetic: Managing resources and running an enterprise calls for long hours of work for longer period of time and hence an entrepreneur is a man of high energy level. Madan Paliwal works 15-16 Hrs. daily. According to him -A labour is also do hard work daily in his life but he earns only 100-200 Rs. per day, hence entrepreneur do work hard in right way. ( Paliwal, 2008) Good communication skills: As a leader an entrepreneur communicates effectively with all concerned such as financiers, employees, customers, suppliers and all who are concerned with the new enterprise. Madan Paliwal is also good communicator. Mental ability: Madan Paliwal born at Nathdwara, A small town in Rajasthan (India). He started small scale industries (Miraj industries), now it is converted into Miraj Products Pvt. Ltd. Sharma (2009) An entrepreneur will be a man of high level intelligence, creative, positive thinking and decision maker with clear objectives in mind. Good Human relation: Tactful and warm human relation is an important factor which brings success to an entrepreneur. Emotional stability and keeping himself as a model to others. Motivates the employees to put their best performance at all levels in the organization. Madan Paliwal also follows good human relations. Strategies: Kant (2000) Strategies are the way of performing the target i.e. how to do a particular work for the achievement of predetermined objectives. 2.0 Business Strategies: There are various strategies which are prepared in the business enterprise like- 2.1. Market Strategies Market Strategies includes the companys relationship with existing and potential customers, its knowledge of changing needs and opportunities in the market, the way it identifies and reaches its customers. Madan Paliwal started Real-estate business at Jaipur. He launched affordable homes, Villas, commercial complex etc. His marketing strategies were very good. After getting success in Jaipur he started new projects in Ajmer, Udaipur, Bhilwara, Mumbai other cities in India. He says that the main strategies that are necessary for getting success in market is attract the market to us, Examine managements assumptions, perceptions, predispositions about the market, and determine to what extent they are valid. And finally evaluate new opportunities in the market, new products, collaboration with others etc. (paliwal, 2008) 2.2. Organization Strategies Organization consists of the structures, systems, policies, procedures and activities of a business, the manner in which it exercises authority, takes decisions, communicates, coordinates and integrates its activities. Madan Paliwal is good organizer. He manages more than 1000 employees in his group of companies. He says the main strategies that are necessary for success in organization strategies are: Analyze the jobs of executives, managers, and supervisors to identify tasks that can be delegated to lower levels and the conditions necessary to make that delegation effective. Next establish clear job descriptions for every position, and create a system whereby the responsibilities and authority of each position are clear to other people in the company. Furthermore determine whether we can innovate any new systems that will further improve our performance. Determine if there are systems successfully employed by other companies that could be used by our company. Finally Assess the eff ectiveness of important systems in the company (e.g. Accounting , Budgeting , Personnel information, Planning etc.) in terms of their speed, their personnel requirements, quality of work, cost of operations, and whether fully being utilized.(paliwal 2008) 2.3. Products, sells and services strategies It means the capacity of the company to deliver products and services. It includes the range and quality of products and services it markets, the technical knowledge and skill of sales and service staff, and the level of technology incorporated in its products and services and utilized to carry on business. Madan Paliwal launched affordable homes for middle lower class people in every project because affordable homes selling easily. After selling homes villas he launches commercial complex in project, hence commercial complex (very costly) become successful (interview with paliwal, 2010). He says that main strategies that are necessary for success in Products, sells and services strategies are: Improve the technology of our products and services by adding new dimension into it and Examine every technology in our company employs. And identify ways to reduce cost. Then Match our products and services as closely as possible with the needs of the market. Next Identify and adapt new and recent technologies to better meet the needs of our customers. Furthermore Introduce new or improved technologies internally that will improve the functioning of our own organization. Besides this Make improvement in our organization (structure, activities, systems, job positions, procedure, rules, regulations etc.) that will improve the development and operation of our technology. Finally continuously expand and upgrade the product and services knowledge and technical expertise of our people. 2.4. Finance Strategies This component defines the way in which the company manages monitors and utilizes capital resources for its growth. It includes the quality of systems and skills for accounting, budgeting and financial management, cash and credit management, control over purchasing and inventory, access to capital. Madan Paliwal started his business with only Rs. 200 capital. He follows following financial strategies to manage financial activities in his companies: A. Determine that our company is exploring and taking advantage of every conceivable source of finance to make our business grow. B. Determine how our company can utilize financial information as a positive instrument for tracking and monitoring performance on key activities. C. Determine what can be done to improve accuracy and timeliness of accounting so that information on performance is available as soon as possible after the day, week, the month, or the job is over. D. Determine what type of indicators we can develop as positive motivating tools to help managers and employees evaluate their own performance. E. Determine what are the keys areas in which the company can save money by improving performance. 2.5. Personnel strategies This component covers the energies, abilities, skills, and attitudes of employees that can be harnessed for growth. People and companies grow together. Miraj Group of companies provides maximum opportunities for their people to grow, find maximum opportunities for their own growth (interview with paliwal, 2010). His Group follows the following personal strategies: A. Recruit people with a high level of energy, good health, highest possible level of education and experience and write type of personality to work well in our company and implement its values. B. Review wage and salary scale, and ensure that the compensation for every position is not only fair, but perceived as fair. Whenever necessary, educate people to understand the true value of the companys benefits package. C. Introduce profit-sharing or equity programs to make our people owners of company and develop the physical and technical skills of our people through formal training programs. D. Develop the managerial and psychological skills of our people through formal training, regular and ongoing training, personal guidance and attention. E. Give greater personal attention to the people you work with (not to their work) and encourage them to do likewise with their people. F. Recognize and reward individual efforts to improve the functioning of our organization. G. Maintain clear and effective two-way communication with all employees H. Implement psychological values such as respect for the individual, personal growth, freedom, and harmony to the highest level. I. Give regular feedback to individuals on their performance and what they can do to improve. 3.0. Other strategies Other strategies have been followed by Miraj Group of Companies are: 3.1 Stability strategy Miraj Group has a stable environment, limited number of products, customers, suppliers and competitors, minimum need for skills and so on may follow what is called the Stability Strategy such an organization is satisfied with its existing level of activities and wants the same to continue. 3.2 Growth strategy An organization that wants to raise its level of performance may adopt what is called the Growth Strategy. The following measures adopted by Miraj Group of companies: Development of new products for the existing markets. Creation of new uses for the existing products. Development of new products for new markets. 3.3 Vertical Integration strategy A business enterprise itself may decide to produce the raw materials needed for production to ensure continuous supply. On the other hand, it may also decide to start its own sales outlets to serve its customers better. In either case, the strategy is known as the Vertical Integration Strategy. 3.4 Product Elimination Strategy A business unit may also eliminate products that have become unpopular with the buyers and bring only losses. Such unsuccessful products also damage the image of the business. Thus, the Product Elimination Strategy may be adopted by a firm to avoid loss of profits as well as reputation. 3.5 Merger Strategy It is also possible that identical business units may combine to rationalize production and sales and thereby derive the benefits of economics of large-scale operations. This is what is known as the Merger Strategy. 4.0 Conclusion In the 21st century the concept of entrepreneurship is essentially related to innovative endeavors. It is through to be concerned with introducing something new in the environment of tough competition. Entrepreneur types of individuals who are highly determined, confident, creative and innovative, sales oriented personalities well in tune with trends and who are able to translate a vision into a real small business. They are encouraging young individual to form new business enterprises and providing such government supports as infrastructural facilities (like water, power, Transpiration, Industrial sheds or developed plots, Communication system and tax incentives, to facilitate this formation process. Madan paliwal successfully followed all above mention strategies in his business since many years. All these strategies are very efficiently and effectively followed by an enterprise for the success of his own as well as for the growth of business enterprise As good as the business strategies; the well is the position of the business. It is impossible to become a successful entrepreneur without business strategy. All the strategies which are mention above should be followed by the person who wants to become a successful entrepreneur. Word Count (2183)

Raisin in the Sun Essay: A Dream Deferred -- Raisin Sun essays

Dream Deferred in A Raisin in the Sun  Ã‚     Ã‚   "What happens to a dream deferred?" (l. 1) Langston Hughes asks in his 1959 poem "Dream Deferred." He suggests that it might "dry up like a raisin in the sun" (ll. 2-3) or "stink like rotten meat" (l. 6); however, at the end of the poem, Hughes offers another alternative by asking, "Or does it explode?" (l. 11). This is the view Lorraine Hansberry supports in her 1959 play A Raisin in the Sun. The drama opens with Walter reading, "Set off another bomb yesterday" (1831), from the front page of the morning newspaper; however, he is unaware that bombs will soon detonate inside his own house. These bombs are explosions of emotion caused by frustration among members of Walter's family who are unable to realize their dreams. Although they all have a common dream of having a better life, they must compete with each other for the insurance money from the untimely death of Walter's father. Walter wants to get rich quickly by investing the money in a liquor store, but his sister, Bene atha, would rather use it to finish medical school. Mama and Walter's wife, Ruth, both want to leave their worn house in the ghetto for a nicer one where Walter's son, Travis, can have his own bedroom and a yard in which to play. The dreams of these characters, however, are deferred for so long that frustration grows inside them and eventually bursts out. Each day Walter has to continue working as a servant, his internal frustration and anger build, and he eventually releases his anger against Beneatha, Ruth, and Mama. "Who the hell told you you had to be a doctor?" (1838) he demands of Beneatha. "If you so crazy 'bout messing 'round with sick people&emdash;then go be a nurse like other women&emdash;or just ... ... all-white neighborhood. The opposition of Mr. Lindner (who offers a substantial amount of money to buy the house from them) unites the family in their mutual goal, and Walter finally comes "into his manhood" (1896): he declines Lindner's money and declares, "we have decided to move into our house because my father&emdash;my father&emdash;he earned it for us brick by brick" (1894). When cooperation replaces competition, the family can finally realize its dreams. Works Cited Hansberry, Lorraine. A Raisin in the Sun. Literature and Its Writers: An Introduction to Fiction, Poetry, and Drama. Eds. Ann Charters and Samuel Charters. Boston: Bedford Books, 1997. 1829-96. Hughes, Langston. "Dream Deferred." Literature and Its Writers: An Introduction to Fiction, Poetry, and Drama. Eds. Ann Charters and Samuel Charters. Boston: Bedford Books, 1997. 1138.      

Longing to Escape Essays -- Essays Papers

Longing to Escape When adversity stares people in the face, do they run away from it, or do they have the willpower to fight it head on? James Joyce, the author of Dubliners, at the young age of twenty-three, was able to take note of the struggles and hardships of the Irish people at a time when their once prosperous Dublin city was in retrograde. He took all the emotions and angers that his people had during this period in time, and summed it up into fifteen short stories. Throughout these stories Joyce places his characters into situations that leave them in constant states of dishevelment and agony. Some characters run away from and are left defeated by these situations and responsibilities, while other characters are depicted as being strong and confront and handle their crises. â€Å"The Boarding House† and â€Å"The Dead† are two stories in particular, where the characters find themselves longing to escape not only from Dublin society, but also from the obligations that they have in Dublin. Joyce uses the idea of marriage as a tug-of-war between escape and responsibility. In â€Å"The Boarding House,† Mr. Doran, a man of around thirty-five years old finds himself in a conflict over deciding what he should do about the ultimatum from Mrs. Mooney about the affair he has with Polly. He knew â€Å"the harm was done,† but â€Å"what could he do now but marry her or run away?† (61) Mr. Doran’s wild, irresponsible ways with women, that he tries to escape as a youth is resurfacing in his older days. Joyce uses this irresponsible act of Mr. Doran to help Mrs. Mooney lure him into her daughter’s marriage trap. He knows he is only part of the blame for this occurrence and â€Å"had a notion he was being had† (6... ...ng house to end the obligation he has of marrying Polly. No matter where a person lives or who that person may be; whether certain fictional characters of â€Å"The Dead,† and â€Å"The Boarding House,† or real life people, everybody at some point in their lives want to break loose from the duties that are holding them down. Works Cited Joyce, James. â€Å"The Boarding House.† Dubliners. New York: Penguin Books, 1993. 56-64. Kelly, Joseph. â€Å"Joyce’s Marriage Cycle.† Studies in Short Fiction 32.3 (1995): 374. Academic Search Premier. EBSCOhost. University of Dayton. Roesch Library. 24 Feb. 2004. http://www.epnet.com Paige, Linda Rohrer. â€Å"James Joyce’s Colored Portraits of a ‘Mother’ in Dubliners.† Studies in Short Fiction 32.3 (1995): 335. Academic Search Premier. EBSCOhost. University of Dayton. Roesch Library. 24 Feb. 2004. http://www.epnet.com.

John Steinbeck’s Short Story, The Chrysanthemums Essay -- Chrysanthemu

Chrysanthemums She was wearing â€Å"a man’s black hat†¦clod-hopper shoes, heavy leather gloves† and â€Å"a big corduroy apron† doing her best to cover up her femininity. In John Steinbeck’s short story, â€Å"The Chrysanthemums†, we are introduced to Elisa Allen. Elisa is living during a period after the Great Depression when women’s rights issues were becoming a topic of public concern. Steinbeck uses the character Elisa Allen to portray the women’s struggle for equality. She is a woman deprived of social, personal and sexual fulfillment in a male-dominated world. Elisa struggles to find satisfaction in her womanhood and a desire to escape from her isolated world. â€Å"She was thirty-five. Her face was eager and mature and handsome†¦her figure looked blocked and heavy†¦Ã¢â‚¬  Elisa seems to be very masculine in appearance, and envious of the male authority. She has a very strong character and wishes to be independent and free herself. She struggles with the idea of women being inferior to men and feels that she must live up to what society believes a woman should be, passive. Elisa is unhappy and bored with the traditional roles she must play being a woman and frequently tries to behave as a man would. In several points in the story, she seems to take on a masculine role. For instance, when the man looking for work came by the house, she took authority and told him sternly â€Å"I tell you I have nothing like that for you to do†, a typical male response. She shows her strong qualities as she refuses him work making her feel like she has authority over him. Elisa tries so hard to be equal to her husband; she works so h ard in her garden as he works on the farm. He compliments her garden, â€Å"you’ve got a strong new crop coming†, makin... ...es from having masculine characteristics to positive female ones and finally regresses to a low point of weakness and inadequacy. All she ever wanted was to be appreciated and noticed by men at an equal level, however, it never happened. Many women suffered, like Elisa, during this point in history. Steinbeck portrays the women of the past through Elisa’s isolated life in which she can not change. Inside she feels that she is a strong, dominant, female, but she never gets the opportunity to have her accomplishments noticed. After many failed attempts to bring herself to the same level as the men in her life, she sadly realizes that she will never be able to live up to her expectations she has for herself. Life was difficult for women during the 1930’s, however, without their fight for equality, women today wouldn’t have the great freedom and equality they possess.

Censorship in Literature Essay

The works of J.D. Salinger, Harper Lee, and John Steinbeck are recognized as classic literature masterpieces that have been read by young students across the nation. Books such as the Catcher in the Rye, To Kill a Mockingbird, Of Mice and Men, and many more have all been banned from schools at one point since being published (Top). The banning of books in schools is considered as censorship. There has been much controversy concerning the offensiveness of the profanity, racial comments, and sexual content these books are said to have. You would expect that readers nowadays be used to these types of elements in the books they read, but many school administrators still continue to censor specific books in hopes of keeping their students away from bad influences. To Kill a Mockingbird, I Know Why the Caged Bird Sings, and Huckleberry Finn have all been challenged since the 1970’s because of the racial comments made throughout the books. The Catcher in the Rye, The Diary of Anne Frank, and The Red Pony are just a few examples of books that have been challenged because the sexual content these books contain (Censored). If one were to read one of these books nowadays, it would be because a teacher had assigned the book to the student as a reading assignment. Would a teacher demand his students to read the first one hundred pages of a book if they thought the book had vulgar language and disturbing sexual content in it? It is understandable why a school would forbid its students to read books with adult content in it in the early to mid 1900’s because of the sensitive subjects the authors were writing about. Racist language was offensive to all races. The sexual content exhibited by the author in his books was offensive to the people that consider that the sexuality of a person is to remain clean and pure. Now in the 21st century, sensitive subjects such as racism, sexuality and even profanity are the least bit of a readers worries. Our opinions on what should be censored in literature have changed since the 20th century. The reasons for censorship in literature have expanded from racism and profanity to religion and witchcraft as the years have passed. Bless me, Ultima by Rodulfo Anaya, and the Harry Potter series by J.K. Rowling have been banned because it is said that these modern books promote witchcraft, which is beyond offensive to many religions (Banned). In our current generation, all people worry about is how books will harm our religion and way of living. Racism and profanity is not much of a worry because most of our society has grown past racism and has grown used to the fact that profanity is something we encounter everyday. So, why are some of the most popular classic novels still banned from some schools across the nation? It is believe that although our society has matured in the past century, schools still have some sort of policy which states that â€Å"books must be age appropriate and related to [the] school curriculum† (Coatney). Many schools believe that buy censoring literature they are preventing kids from being exposed to adult content, but in reality, what schools believe that specific books should be rated â€Å"R† are really rated â€Å"PG-13† to the minds of their students. Although schools and parents support the idea of censoring books because of their adult content, they do not realize that rather than protecting them, they are keeping them away from what can be valuable lessons. Books such as To Kill a Mockingbird and The Adventures of Huckleberry Finn can contribute to the lesson that racism was never fair to begin with. By reading The Catcher in the Rye, the youth can learn that there is more to life than just violence and sex. Students can truly learn from the books that have been censored throughout these many years because â€Å"high school students are evolving and learning to formulate their own opinions in life†, regardless of the amount of vulgar language, sexual content, and violence that is in the books they choose to read (Censorship). However, there should be limits to how much adult and offensive content there is in books. For example Adolf Hitler’s Mein Kampf is a book that encourages racism and violence while other books only promote the importance of goodness by exposing the bad. Books such as that are the type of books that can do some harm to the youth of our society. Also, there are some books in present day that should be censored because of their sexual content. Fifty Shades of Grey, written by E.L. James is, for example, too outspoken for the young readers of today. The sexual content in The Catcher in the Rye would be considered to be nothing compared to the work of E.L. James. Although every book cannot be kept away from each student, the books that are labeled as too explicit should at least be the ones to be banned from schools. Censorship has played a large role in literature ever since authors have experimented with the types of stories they can create by using different types of adult content to get their lesson across. Many classic literatures that have been taught in schools for many years have been censored many times since the first time they were published, but people still find a way to make a positive lesson out of those books regardless of the content demonstrated by the author of the book. It is possible that one day books will not need to be censored because of how exposed our future generations will be due to what is exhibited out in the real world for everyday people to see. Works Cited â€Å"Banned & Challenged Books.† Good Reads. N.p., n.d. Web. 20 Jan. 2013. â€Å"CENSORED BOOKS IN THE USA.† Bulletin 43 over Censored Books in the USA. Office for Intellectual Freedom, n.d. Web. 19 Jan. 2013. â€Å"Censorship: The Negative Effects Parents Don’t Know About.† Yahoo! Contributor Network. N.p., 11 May 2009. Web. 21 Jan. 2013. Coatney, Sharon. â€Å"Banned Books: A School Librarian’s Perspective.† Time.com. N.p., 22 Sept. 2000. Web. 20 Jan. 2013. â€Å"Top 100 Banned/Challenged Books: 2000-2009.† American Library Association. N.p., n.d. Web.18 Jan. 2013.

“Farm Girl” by Jessica Hemauer Essay

â€Å"Farm Girl†, is an essay by Jessica Hemauer, who is trying to fit in with other kids at her school. She lives on a farm where she has her responsibilities before school and after school, and she is not able to participate in school functions or other activities that the other kids get to do. Her dream is to join basketball and other clubs because she feels that is the only way she will fit in with everyone else at school. Jessica wakes up at 5 with her sisters, Angie and Melissa and her brother, Nick so they can help their father with the morning chores on the farm. It does not matter what else is going on with the family they have to get up every morning and help with the chores. After they get up they have a routine of getting dressed and head down to the basement, where they keep their outside clothes, so they do not stick up the house. They put on their barn clothes and head out to the barn to help their father. Jessica has her chores and so does her brother and siste rs. Jessica has to help her sisters with sanitizing the milk machines, prepare the milk equipment and set up the station with towels and charts the cows that need medication. The other thing Jessica does, which is her favorite thing to do, is feed the newborn calves. She loves doing this job because she finally gets to take care of something that is not taking care of her. After she was done with that, all the kids help and clean out the pens and lay fresh straw down. Jessica does not like this job too much because it is the dirtiest job they have to do. She gets done with her morning chores about 7:30 and head back to the house to get ready for school. Once back in the basement they hang their farm clothes over a folding chair near the washing machine. As they head up the stairs, to get showers and get ready for school they can smell smoked bacon and cheese omelets being cooked. As she is running out the door yelling at the bus,† Wait!† she grabbed herself a glass of freshly squeezed orange juice. In school, the other kids are just rolling out of bed, and I have been up for hours. While other classmates are thinking of what shows to watch on TV, Jessica is thinking about all the chores she has to do when she gets home from school. Jessica has no social life except in school. Jessica would love to join a team or club after school, but with her chores she is not be able to go to practice like the other teammates. Being raised on a farm makes her feel difference from the other kids in her grade. Jessica feels left out and depressed because she cannot join in on conversations about what the kids are doing in school. â€Å"Hey, Carrie, how was basketball practice last night?† Susan asked. â€Å"It was terrible! Coach was in such a bad mood!† Carrie replied. â€Å"He made us run sprints for every shot we missed. Kelly was missing all her shots last night. I am so sore today.†(Roen/Glau/Maid 2011 pg 85) Jessica would sit in silence, eating French fries, listening to her friends talking and laughing and waiting for the lunch period to end. In eighth grade, she wanted to play basketball, she pleaded with her parents and they finally gave in and said she could play. One of the conditions was that after practice, she had to come home and do all her chores and homework, and she agreed. She became a starting point guard. She finally starts to feel like part of a group. She never tells friends or teachers that she goes home every night and does chores on the farm because she did not want them to know she was different. In High School Jessica, is more involved with school. The farm has grown to two hundred cows. In ninth grade, she continued to play basketball, and she kept up with her chores before and after school. After her ninth grade year, her father called a family meeting to inform them that he would like the farm to keep growing and that he needs more help than the family can provide. He told them that they no longer had to work on the farm anymore unless they wanted to. He wants his children more involved in school and to go off to college. So after that meeting, she joined homecoming club, auditions for musicals and plays and serves as president of student council and the class president. Since now, she is not working on the farm she goes and gets a waitressing job. Friends came up to her and asked her all the time how she manages her time so well. When at work she is always on time, never sick and does what she is told to do. One night she sat down and started thinking about her life. She thought that joining clubs and doing activities would make her fit it, but it had not, she still felt left out. From an early age, she was taught how to manage her time wisely with school and chores. She then learned how to manage it with basketball involved. Working on the farm gave her a high tolerance for work. Her boss is always asking her for more hard working people like her. She simply tells him. †Try hiring some farm girls.†(Roan/Glau/Maid 2011 Pg 86) Jessica learned at a very young age that working hard was not a bad thing. Yes she wanted to do more in school besides get an education. Her father also noticed that his children were suffering in the end with the expansion he was planning on doing. She was glad to have had the experience that her father gave her so when she got a job she knew how to work hard. References Writing for college, Writing for life, 2011, A writer’s share her experiences: Jessica Hemauer: Farm Girl Pages 83-87.

Sociology 100 Final Exam

Chapter 8 Sex Distinction – the biological distinction between females and males. Incest Taboo – a norm forbidding sexual relations or marriage between certain relatives. 1960 Birth Control – New technology also played a part in the sexual revolution. The birth control pill, introduced in 1960, not only prevented pregnancy but also made sex more convenient. Premarital Sex – sexual intercourse before marriage – among young people. Sexual Orientation – a person’s romantic and emotional attraction to another person.Homophobia – discomfort over close personal interaction with people thought to be gay, lesbian, or bisexual. Prostitution – the selling of sexual service. 90k Reported Rapes – more than 90,000 women each year report to the police that they have been raped. Uneven Enforcement – enforcement of prostitution laws is uneven at best, especially when it comes to who is and is not likely to be arrested. Abor tion – the deliberate termination of a pregnancy. Chapter 9 Decent Values – Elijah Anderson explains that in poor urban neighborhoods, most people manage to conform to conventional or â€Å"decent† values.Stigma – a powerfully negative label that greatly changes a person’s self-concept and social identity. Social Inequality – who or what is labeled deviant depends on which categories of people hold power in a society. Corporate Crime – the illegal actions of a corporation or people acting on its behalf. *Arrest of Women – couldn’t find a fact to define this one! Victimless Crimes – violations of law in which there are no obvious victims. High Risk – people with high arrest rates are also at higher risk of being victims of crime.Due Process – the idea that the criminal justice system should operate under the rule of law – guides the actions of police, court officials, and corrections officers. Decline of Executions – as a public concern about the death penalty has increased, the use of capital punishment has declined, falling from 74 executions in 1997 to 37 in 2008. No Elimination of Crime – criminal justice system cannot eliminate crime. Chapter 10 Structural Social Mobility – a shift in the social position of large numbers of people due more to changes in society itself than to individual efforts.Ideology – cultural beliefs that justify particular social arrangements, including patterns of inequality. Socioeconomic Status – a composite ranking based on various dimensions of social inequality. Conspicuous Consumption – buying and using products because of the â€Å"statement† they make about social position. Davis-Moore Thesis – states not only that social stratification is universal but also that it is necessary to make society highly productive. Chapter 11 Median Income – a recent survey of families by the Federal Reserve found that median wealth for minority families.Upper Class – many upper-class people are business owners, executives in large corporations, or senior government officials. Marriage Age: 26/28 – the average age at marriage has moved upward four years (to 25. 6 years for women and 27. 5 years for men). Feminization of Poverty – the trend of women making up an increasing proportion of the poor. Homeless Mentally Ill: 25% – One-third of homeless people are substance abusers, and one-fourth is mentally ill. Chapter 12 High-Income Countries – the nations with the highest overall standards of living.Global Stratification – the full extent of global stratification reflects both differences among countries and internal stratification. 100 Million Kids Black-market – 100 million of the world’s children are orphaned or have left their families altogether, sleeping and living on the streets as best they can or perhaps tryi ng to migrate to the US. Modernization Theory – a model of economic and social development that explains global inequality in terms of technological and cultural differences between nations.

Corporate Financial Management Lecturer’s Guide

CFML_A01v3. QXD 8/6/08 3:51 PM Page 1 Lecturer’s Guide Corporate Financial Management Fourth edition Glen Arnold For further lecturer material please visit: www. pearsoned. co. uk/arnold ISBN 978-0-273-71064-6  © Pearson Education Limited 2008 Lecturers adopting the main text are permitted to download and copy this guide as required. CFML_A01v3. QXD 8/6/08 3:51 PM Page 2 Pearson Education Limited Edinburgh Gate Harlow Essex CM20 2JE England and Associated Companies around the world Visit us on the World Wide Web at: www. pearsoned. co. uk ––––––––––––––––––––––––––––––––––– First published under the Financial TimesPitman Publishing imprint in 1998 Second edition published 2002 Third edition published 2005 Fourth edition published 2008  © Financial Times Professional Limited 1998  © Pearson Education Limited 2002, 2005, 2008 The right of Glen Arnold to be identified as author of this Work has been asserted by him in accordance with the Copyright, Designs and Patents Act 1988. ISBN-978-0-273-71064-6 All rights reserved. Permission is hereby given for the material in this publication to be reproduced for OHP transparencies and student handouts, without express permission of the Publishers, for educational purposes only.In all other cases, no part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise without either the prior written permission of the Publishers or a licence permitting restricted copying in the United Kingdom issued by the Copyright Licensing Agency Ltd. , Saffron House, 6-10 Kirby Street, London EC1N 8TS. This book may not be lent, resold, hired out or otherwise disposed of by way of trade in any form of binding or cover other than that in which it is published, without the prior consent of the Publishers.CFML_A01v3. QXD 8/5/08 4:16 PM Page 3 CONTENTS Preface Location of answers to questions and problems SUPPLEMENTARY MATERIAL FOR CHAPTERS Chapter 1 The financial world Chapter 2 Project appraisal: Net present value and internal rate of return Chapter 3 Project appraisal: Cash flow and applications Chapter 4 The decision-making process for investment appraisal Chapter 5 Project appraisal: Capital rationing, taxation and inflation Chapter 6 Risk and project appraisal Chapter 7 Portfolio theory Chapter 8 The capital asset pricing model and multi-factor models Chapter 9 Stock markets Chapter 10 Raising equity capitalChapter 11 Long-term debt finance Chapter 12 Short-term and medium-term finance Chapter 13 Treasury and working capital management Chapter 14 Stock market efficiency Chapter 15 Value management Chapter 16 Strategy and value Chapter 17 Value-creat ion metrics Chapter 18 Entire firm value measurement Chapter 19 The cost of capital Chapter 20 Valuing shares Chapter 21 Capital structure Chapter 22 Dividend policy Chapter 23 Mergers Chapter 24 Derivatives Chapter 25 Managing exchange-rate risk  © Pearson Education Limited 2008 5 6 7 10 14 20 24 29 33 38 40 43 47 51 54 58 59 64 66 72 74 77 81 84 86 91 96 3 CFML_A01v3.QXD 8/5/08 4:16 PM Page 4 Supporting resources Visit www. pearsoned. co. uk/arnold to find valuable online resources Companion Website for students ? Learning objectives for each chapter ? Multiple-choice questions with instant feedback to help test your learning ? Weblinks to relevant, specific Internet resources to facilitate in-depth independent research ? A wide selection of FT articles, additional to those found in the book, to provide real-world examples of financial decision making in practice ? Interactive online flashcards that allow the reader to check definitions against the key terms during revision Sear chable online glossary For instructors ? Complete, downloadable Instructor’s Manual including answers for all question material in the book ? A brand new set of over 800 PowerPoint slides that can be downloaded and used as OHTs Also: The regularly maintained Companion Website provides the following features: ? Search tool to help locate specific items of content ? E-mail results and profile tools to send results of quizzes to instructors ? Online help and support to assist with website usage and troubleshooting For more information please contact your local Pearson Education sales representative or visit www. earsoned. co. uk/arnold CFML_A01v3. QXD 8/5/08 4:16 PM Page 5 PREFACE This Guide is designed to assist lecturers and tutors using Corporate Financial Management fourth edition. Supplementary material for chapters For each chapter: †¢ The learning outcomes are outlined. †¢ Key points and concepts are listed. †¢ Solutions to selected numerical problems (thos e marked with an asterisk in the main book) are provided. Note that there is often more than one possible correct solution to a problem. Different answers, which nevertheless follow the logic of the argument presented in the text, may be acceptable.Overhead projector transparency masters Also available on the website in PowerPoint ® for downloading are over 800 selected figures, tables and key points reproduced in a form suitable for creating overhead projector transparency masters. These are arranged in the order in which they appear in Corporate Financial Management. The learning objectives and summary points from the chapters are also included. Glen Arnold  © Pearson Education Limited 2008 5 CFML_A01v3. QXD 8/5/08 4:16 PM Page 6 LOCATION OF ANSWERS TO QUESTIONS AND PROBLEMS (No answers given to those in final column)Chapter No Answered in Appendix VII Answered in Lecturer’s Guide 1 Essay answer required (see text) All (see note in Appendix VII) 2 1, 2, 4, 5, 6 3, 7 3 1 , 2, 3, 6, 9, 11, 13, 15 4, 5, 7, 8, 10, 12, 14 4 1, 2, 4, 5 3 5 1, 2, 3, 5, 6, 9, 10 4, 7, 8 6 1, 4, 5, 6, 7, 8, 9, 10, 11 2, 3, 12 7 1, 2, 3, 7, 8, 9, 10, 11, 12, 13, 15 4, 5, 6, 14a, b, c 8 1, 3, 4, 5, 7, 8, 9, 10 6, 7, 8, 9 14d 2, 6, 11 9 1–11 10 12 8 1–7, 9–11, 13–19 11 1, 2, 3, 4, 5, 6, 10, 11, 13, 16 7 8, 9, 12, 14, 15, 17–20 12 1, 2, 4, 9, 10, 11 5, 12 3, 6, 7, 8, 13, 14, 15 13 1, 4, 5, 7, 9, 10 3a, 6, 8, 23, 25a , 3b, 11, 12, 13–22, 24, 25b, 25c 14 2 15 8, 9 1, 3–17 7, 10 16 1–6 1–4 17 1, 5, 6, 7 18 1, 2 19 2, 3 1 20 3, 4, 5, 6, 7, 9 8, 10 1, 2 21 2, 3, 6a, 9 1 4, 5, 6b, 7, 8 22 4, 5, 8 23 6 1, 3, 4, 5 2, 7, 8, 9 24 1, 2, 3, 4, 5, 7, 10 6, 8, 9 11, 12, 13 25 1, 2, 7, 8a, 10, 11 4, 9 3, 4b, 5, 6, 8b 6 2, 3, 4, 4a 8 1, 2, 3, 4, 7  © Pearson Education Limited 2008 CFML_CH01v3. QXD 29/7/08 17:25 Page 7 SUPPLEMENTARY MATERIAL FOR CHAPTERS Chapter 1 THE FINANCIAL WORLD L EARNING OUTCOMES It is no good learning mathe matical techniques and theory if you lack an overview of what finance is about.At the end of this chapter the reader will have a balanced perspective on the purpose and value of the finance function, at both the corporate and national level. More specifically, the reader should be able to:  ¦ describe alternative views on the purpose of the business and show the importance to any organisation of clarity on this point;  ¦ describe the impact of the divorce of corporate ownership from day-to-day managerial control;  ¦ explain the role of the financial manager;  ¦ detail the value of financial intermediaries;  ¦ show an appreciation of the function of the major financial institutions and markets. K EY POINTS AND CONCEPTS Firms should clearly define the objective of the enterprise to provide a focus for decision making.  ¦ Sound financial management is necessary for the achievement of all stakeholder goals.  ¦ Some stakeholders will have their returns satisfied – gi ven just enough to make their contribution. One (or more) group(s) will have their returns maximised – given any surplus after all others have been satisfied.  ¦ The assumed objective of the firm for finance is to maximise shareholder wealth. Reasons: – practical, a single objective leads to clearer decisions; – the contractual theory; – survival in a competitive world; it is better for society; – counters the tendency of managers to pursue goals for their own benefit; – they own the firm.  ¦ Maximising shareholder wealth is maximising purchasing power or maximising the flow of discounted cash flow to shareholders over a long time horizon.  ¦ Profit maximisation is not the same as shareholder wealth maximisation. Some factors a profit comparison does not allow for are: – future prospects; – risk; – accounting problems;  © Pearson Education Limited 2008 7 CFML_CH01v3. QXD 29/7/08 17:25 Page 8 Glen Arnold, Corporat e Financial Management Lecturer’s Guide, 4th edition – communication; – additional capital. Corporate governance. Large corporations usually have a separation of ownership and control. This may lead to managerialism where the agent (the managers) take decisions primarily with their interests in mind rather than those of the principals (the shareholders). This is a principal-agent problem. Some solutions: – link managerial rewards to shareholder wealth improvement; – sackings; – selling shares and the takeover threat; – corporate governance regulation; – improve information flow.  ¦ The efficiency of production and the well-being of consumers can be improved with the introduction of money to a barter economy. Financial institutions and markets encourage growth and progress by mobilising savings and encouraging investment.  ¦ Financial managers contribute to firms’ success primarily through investment and finance decis ions. Their knowledge of financial markets, investment appraisal methods, treasury and risk management techniques are vital for company growth and stability.  ¦ Financial institutions encourage the flow of saving into investment by acting as brokers and asset transformers, thus alleviating the conflict of preferences between the primary investors (households) and the ultimate borrowers (firms). Asset transformation is the creation of an intermediate security with characteristics appealing to the primary investor to attract funds, which are then made available to the ultimate borrower in a form appropriate to them. Types of asset transformation: – risk transformation; – maturity transformation; – volume transformation.  ¦ Intermediaries are able to transform assets and encourage the flow of funds because of their economies of scale vis-a-vis the individual investor: – efficiencies in gathering information; – risk spreading; – transaction costs.  ¦The secondary markets in financial securities encourage investment by enabling investor liquidity (being able to sell quickly and cheaply to another investor) while providing the firm with long-term funds.  ¦ The financial services sector has grown to be of great economic significance in the UK. Reasons: – high income elasticity; – international comparative advantage.  ¦ The financial sector has shown remarkable dynamism, innovation and adaptability over the last three decades. Deregulation, new technology, globalisation and the rapid development of new financial products have characterised this sector. Banking sector: – Retail banks – high-volume and low-value business. – Wholesale banks – low-volume and high-value business. Mostly fee based. – International banks – mostly Eurocurrency transactions. – Building societies – still primarily small deposits aggregated for mortgage lending. – Fina nce houses – hire purchase, leasing, factoring. 8  © Pearson Education Limited 2008 CFML_CH01v3. QXD 29/7/08 17:25 Page 9 Glen Arnold, Corporate Financial Management Lecturer’s Guide, 4th edition  ¦ Long-term savings institutions: – Pension funds – major investors in financial assets. Insurance funds – life assurance and endowment policies provide large investment funds.  ¦ The risk spreaders: – Unit trusts – genuine trusts which are open-ended investment vehicles. – Investment trusts – companies which invest in other companies’ financial securities, particularly shares. – Open-ended investment companies (OEICs) – a hybrid between unit and investment trusts.  ¦ The risk takers: – Private equity funds – invest in companies not quoted on a stock exchange. – Hedge funds – wide variety of investment or speculative strategies outside regulators’ control.  ¦ The markets: The money markets are short-term wholesale lending and/or borrowing markets. – The bond markets deal in long-term bond debt issued by corporations, governments, local authorities and so on, and usually have a secondary market. – The foreign exchange market – one currency is exchanged for another. – The share market – primary and secondary trading in companies’ shares takes place on the Official List of the London Stock Exchange, techMARK and the Alternative Investment Market. – The derivatives market – LIFFE (Euronext. liffe) dominates the ‘exchange-traded’ derivatives market in options and futures.However there is a flourishing over-the-counter market. There are no numerical questions in this chapter; answers may be found from reading the text.  © Pearson Education Limited 2008 9 CFML_CH02v3. QXD 29/7/08 17:26 Page 10 Chapter 2 PROJECT APPRAISAL: NET PRESENT VALUE AND INTERNAL RATE OF RETURN L EARNING OUTCOMES By the end of the chapter the student should be able to demonstrate an understanding of the fundamental theoretical justifications for using discounted cash flow techniques in analysing major investment decisions, based on the concepts of the time value of money and the opportunity cost of capital.More specifically the student should be able to:  ¦ calculate net present value and internal rate of return;  ¦ show an appreciation of the relationship between net present value and internal rate of return;  ¦ describe and explain at least two potential problems that can arise with internal rate of return in specific circumstances;  ¦ demonstrate awareness of the propensity for management to favour a percentage measure of investment performance and be able to use the modified internal rate of return. KEY POINTS AND CONCEPTS  ¦ Time value of money has three component parts each requiring compensation for a delay in the receipt of cash: the pure time value, or impatience to consume, – inflation, – risk.  ¦ Opportunity cost of capital is the yield forgone on the best available investment alternative – the risk level of the alternative being the same as for the project under consideration.  ¦ Taking account of the time value of money and opportunity cost of capital in project appraisal leads to discounted cash flow analysis (DCF).  ¦ Net present value (NPV) is the present value of the future cash flows after netting out the initial cash flow. Present values are achieved by discounting at the opportunity cost of capital.NPV = CF0 +  ¦ (1 + k)2 + †¦ CFn (1 + k)n 0 accept 0 reject CF1 1+r + CF2 (1 + r)2 + †¦ CFn (1 + r)n =0 The internal rate of return decision rule is: IRR IRR 10 CF2 Internal rate of return (IRR) is the discount rate which, when applied to the cash flows of a project, results in a zero net present value. It is an ‘r’ which results in the following formula being true: CF0 +  ¦ 1+k + Th e net present value decision rules are: NPV NPV  ¦ CF1 opportunity cost of capital – accept opportunity cost of capital – reject  © Pearson Education Limited 2008 CFML_CH02v3. QXD 29/7/08 17:26 Page 11Glen Arnold, Corporate Financial Management Lecturer’s Guide, 4th edition  ¦ IRR is poor at handling situations of unconventional cash flows. Multiple solutions can be the result.  ¦ There are circumstances when IRR ranks one project higher than another, whereas NPV ranks the projects in the opposite order. This ranking problem becomes an important issue in situations of mutual exclusivity.  ¦ The IRR decision rule is reversed for financing-type decisions.  ¦ NPV measures in absolute amounts of money. IRR is a percentage measure.  ¦ IRR assumes that intra-project cash flows can be invested at a rate of return equal to the IRR.This biases the IRR calculation.  ¦ If a percentage measure is required, perhaps for communication within an organisation, th en the modified internal rate of return (MIRR) is to be preferred to the IRR. ANSWERS TO SELECTED QUESTIONS 3 Confused plc a Project C IRRs at 12. 1% and 286%. See Fig. 2. 1. NPV + 12. 1 – 286 Discount rate Fig. 2. 1 Project D No solution using IRR. See Fig. 2. 2. + NPV Discount rate – Fig. 2. 2 b This problem illustrates two disadvantages of the IRR method. In the case of project C multiple solutions are possible, given the non-conventional cash flow.In the case of project D there is no solution, no IRR where NPV = 0. c NPV Project C: +? 646 Project D: –? 200 Using NPV the accept/reject decision is straightforward. Project C is accepted and Project D is rejected.  © Pearson Education Limited 2008 11 CFML_CH02v3. QXD 29/7/08 17:26 Page 12 Glen Arnold, Corporate Financial Management Lecturer’s Guide, 4th edition 7 Seddet International a Project A At 20%: –5,266 + 2,500 ? 2. 1065 = 0, ? IRR = 20% Project B At 7%: –8,000 + 10,000 ? 0. 8163 = +163 At 8%: –8,000 + 10,000 ? 0. 7938 = –62 IRR = 7 + 163 163 + 62 (8 – 7) = 7. 7% Project CAt 22%: –2,100 + 200 ? 0. 8197 + 2,900 ? 0. 6719 = +12. 45 At 23%: –2,100 + 200 ? 0. 8130 + 2,900 ? 0. 6610 = –20. 5 IRR = 22 + 12. 45 12. 45 + 20. 5 (23 – 22) = 22. 4% Project D At 16%: –1,975 + 1,600 ? 0. 8621 + 800 ? 0. 7432 = –1 ? IRR is slightly under 16%. The IRR exceeds the hurdle rate of 16% in the case of A and C. Therefore if all projects can be accepted these two should be undertaken. b Ranking under IRR: Project Project Project Project C A D B IRR 22. 4% 20% 16% 7. 7% best project c Project A –5,266 + 2,500 ? 2. 2459 = 349 Project B –8,000 + 10,000 ? 0. 6407 = –1,593 Project C 2,100 + 200 + 0. 8621 + 2,900 ? 0. 7432 = 228 Project D –1,975 + 1,600 ? 0. 8621 + 800 ? 0. 7432 = –1 12  © Pearson Education Limited 2008 CFML_CH02v3. QXD 29/7/08 17:26 Page 13 Glen Arnold, Corporate Financia l Management Lecturer’s Guide, 4th edition Ranking Project A Project C Project D Project B NPV 349 best project 228 –1 –1,593 Project A ranks higher than project C using NPV because it generates a larger surplus (value) over the required rate of return. NPV measures in absolute amounts of money and because project A is twice the size of project C it creates a greater NPV despite a lower IRR. This report should comment on the meaning of a positive or negative NPV expressed in everyday language. It should mention the time value of money and opportunity cost of capital and explain their meanings. Also the drawbacks of IRR should be discussed:  ¦ multiple solutions;  ¦ ranking problem – link with the contrast of a percentage-based measure and an absolute moneybased measure;  ¦ additivity not possible;  ¦ the reinvestment assumption is flawed.  © Pearson Education Limited 2008 13 CFML_CH03v3. QXD 29/7/08 17:26 Page 14 Chapter 3 PROJECT APPRAISAL: CAS H FLOW AND APPLICATIONS LEARNING OUTCOMESBy the end of this chapter the reader will be able to identify and apply relevant and incremental cash flows in net present value calculations. The reader will also be able to recognise and deal with sunk costs, incidental costs and allocated overheads and be able to employ this knowledge to the following:  ¦ the replacement decision/the replacement cycle;  ¦ the calculation of annual equivalent annuities;  ¦ the make or buy decision;  ¦ optimal timing of investment;  ¦ fluctuating output situations. KEY POINTS AND CONCEPTS  ¦ Raw data have to be checked for accuracy, reliability, timeliness, expense of collection, etc.  ¦Depreciation is not a cash flow and should be excluded.  ¦ Profit is a poor substitute for cash flow. For example, working capital adjustments may be needed to modify the profit figures for NPV analysis.  ¦ Analyse on the basis of incremental cash flows. That is, the difference between the cash flows arisin g if the project is implemented and the cash flows if the project is not implemented: – opportunity costs associated with, say, using an asset which has an alternative employment are relevant; – incidental effects, that is, cash flow effects throughout the organisation, should be considered along with the obvious direct effects; sunk costs – costs which will not change regardless of the decision to proceed are clearly irrelevant; – allocated overhead is a non-incremental cost and is irrelevant; – interest should not be double counted by both including interest as a cash flow and including it as an element in the discount rate.  ¦ The replacement decision is an example of the application of incremental cash flow analysis.  ¦ Annual equivalent annuities (AEA) can be employed to estimate the optimal replacement cycle for an asset under certain restrictive assumptions. The lowest common multiple (LCM) method is sometimes employed for short-lived as sets. Whether to repair the old machine or sell it and buy a new machine is a very common business dilemma. Incremental cash flow analysis helps us to solve these types of problems. Other applications include the timing of projects, the issue of fluctuating output and the make or buy decision. 14  © Pearson Education Limited 2008 CFML_CH03v3. QXD 29/7/08 17:26 Page 15 Glen Arnold, Corporate Financial Management Lecturer’s Guide, 4th edition A NSWERS TO SELECTED QUESTIONS 4 Mercia plc a Proposal 1 Consultant’s fee – sunk cost Central overhead – irrelevant Depreciation – irrelevant Time (years) ?000s 0Earthmoving Construction Ticket sales Operational costs Council Senior management Opportunity cost Cash flows –1,650 3>? 2 –100 –1,650 Discounted Cash flows 1 –150 –1,400 –200 +600 –100 –100 –50 +600 –100 –50 +150 0 +450 150 (1. 1)2 450/0. 1 (1. 1)2 + NPV = + ? 2. 193m Propos al 2 Central overhead (? 70,000) – irrelevant Consultants fees (? 50,000) – sunk cost Time (years) ?000s 0 1 2 3 –100 5,000 –4,000 –400 –100 5,000 –4,000 –400 –100 Design & build Revenue Operating costs Equipment Executive Opportunity cost Sale of club –9,000 Cash flow –9,100 –100 Discounted cash flow –9,100 –100 1. 1 –100 +11,000 500 + 500 (1. 1)2 +11,500 + 11,500 (1. 1)3 NPV = –? 137,566 Recommendation: accept proposal 1 IRR Proposal 1: 20. 2% Proposal 2: 9. 4%  © Pearson Education Limited 2008 15 CFML_CH03v3. QXD 29/7/08 17:26 Page 16 Glen Arnold, Corporate Financial Management Lecturer’s Guide, 4th edition 5 Mines International plc a Survey – sunk cost Time (years) ?m Profit (loss) Add depreciation Capital equipment Survey 0 1 2 3 4 5 0 0 –4. 75 –2. 1 0 –4. 75 0. 30 3. 9 2. 0 4. 7 2. 0 4. 7 2. 0 2. 9 2. 0 1. 5 0 0 0 2. 0 –2. 0 2. 0 2. 25 –0. 25 2. 25 2. 25 0 2. 25 1. 75 +0. 50 1. 75 0 +1. 75 0. 125 0. 125 0. 125 0. 10 0 –0. 25 0. 10 0 –0. 10 Debtor adjustment: Opening debtors Closing debtors Creditor adjustment Opening creditors Closing creditors 0 0. 15 +0. 15 Overheads Hire cost Cash reserves Government refund Cash flow Discounted cash flow 0. 2 0. 15 0. 10 0. 10 0. 125 –0. 05 +0. 025 0. 2 0. 2 –0. 1 0. 2 –1. 0 5. 125 0. 2 +1. 0 +0. 2 –5. 75 –5. 75 –6. 20 4. 05 6. 575 6. 9 8. 075 1. 85 –6. 20 + 4. 05 + 6. 575 + 6. 9 + 8. 075 + 1. 85 1. 12 (1. 12)2 (1. 12)3 (1. 12)4 (1. 12)5 (1. 12)5. 125 = –5. 75 – 5. 536 + 3. 229 + 4. 680 + 4. 385 + 4. 582 + 1. 035 = ? 6. 625m The maximum which MI should bid in the auction is ? . 625m. This additional cash outflow at time zero would result in a return of 12% being obtained. (Some students may time the final debtor and creditor payments at time 5. 25 as time 6. ) b IRR = 29. 4%. c Poin ts to be covered:  ¦ Time value of money.  ¦ Opportunity cost of money for a given risk class.  ¦ Sunk cost.  ¦ Treatment of depreciation.  ¦ Allocated overhead treatment.  ¦ Cash injections.  ¦ Hire cost – opportunity cost. Comparison of NPV with other project appraisal methods: Advantages over IRR: – measures in absolute amounts of money; – ranking problem; – multiple solution problem. 16 Pearson Education Limited 2008 CFML_CH03v3. QXD 29/7/08 17:26 Page 17 Glen Arnold, Corporate Financial Management Lecturer’s Guide, 4th edition  ¦ Advantages over payback: – time value of money allowed for; – all cash flows considered; – cash flows within pay back period considered properly.  ¦ Advantages over ARR: – firm theoretical base, time value of money; – defined decision criteria. 7 Reds plc One-year cycle: Time (years) 0 1 –10,000 –12,000 8,000 – 4,000 NPV = –10,000  œ 4,000 ? 0. 9009 = –13,604 AEA = –13,604 0. 9009 = –? 15,100 Two-year cycle: Time (years) 0 1 2 –10,000 –12,000 –13,000 ,500 –6,500 NPV = –10,000 – 12,000 ? 0. 9009 – 6,500 ? 0. 8116 = –26,086 AEA = –26,086 1. 7125 = –? 15,233 Three-year cycle: Time (years) 0 1 2 3 –10,000 –12,000 –13,000 –14,000 3,500 –10,500 NPV = –10,000 – 12,000 ? 0. 9009 – 13,000 ? 0. 8116 – 10,500 ? 0. 7312 = –39,039 AEA = –39,039 2. 4437 = –? 15,975 Reds should replace the machinery on a one-year cycle.  © Pearson Education Limited 2008 17 CFML_CH03v3. QXD 29/7/08 17:26 Page 18 Glen Arnold, Corporate Financial Management Lecturer’s Guide, 4th edition 8 Immediate replacement: Time (years) 0 1>? +4,000 –15,100 +4,000 –15,100 0. 11 = –? 133,273Replacement after one year: Time 0 + 2>? –2,000 –2,00 0 1 3,000 –15,100 0. 9009 – 15,100/0. 11 1. 11 3,000 ? = –? 122,966 Replacement after two years: Time 0 1 2 3>? –2,000 –1,000 +1,500 –15,100 –2,000 –1,000 ? 0. 9009 + 1,500 ? 0. 8116 –15,100/0. 11 (1. 11)2 = –? 113,097 Recommendation: Commence replacement cycle after two years. 10 Curt plc Incremental cash flows Time (years) 0 –70,000 –28,000 28,000 37,000 47,100 68,410 ? ? ? ? ? 0. 8621 0. 7432 0. 6407 0. 5523 0. 4761 2 3 4 5 0 –70,000 100,000 –80,000 –48,000 110,000 –82,000 121,000 –84,000 133,100 –86,000 146,410 –88,000 10,000 –70,000 Current cash flowsNew plan 1 –28,000 28,000 37,000 47,100 68,410 = = = = = = –70,000 –24,139 20,810 23,706 26,013 32,570 8,960 The positive incremental NPV indicates that acceptance of the proposal to manufacture in-house would add to shareholder wealth. 18  © Pearson Education Limited 200 8 CFML_CH03v3. QXD 29/7/08 17:26 Page 19 Glen Arnold, Corporate Financial Management Lecturer’s Guide, 4th edition Other factors: some possibilities The relative bargaining strength of Curt and its supplier. Perhaps a search for another supplier would be wise. Perhaps it would be possible to negotiate a multi-year price agreement.Are there some other incidental effects Curt has not considered, e. g. factory space usage? 12 Netq plc Output per year: 1,000 ? 0. 3333 ? 2 1,000 ? 0. 3333 ? 0. 75 ? 2 1,000 ? 0. 3333 ? 0. 5 ? 2 = 667 500 333 1,500 Cost of annual output 1,500 ? ?4 = ? 6,000 PV = 6,000/0. 13 = ? 46,154 Both machines replaced: Annual costs 1,500 ? ?1. 80 = ? 2,700 PV = 14,000 + 2,700 0. 13 = ? 34,769 One machine is replaced: Old Output: first third of year second third of year last third of year New 333. 3 166. 7 0 500 333. 3 333. 3 333. 3 1,000 Annual costs 500 ? 4 + 1,000 ? 1. 8 = ? 3,800 PV = 7,000 + 3,800 = ? 6,231 0. 13 The lowest cost option is to replace both m achines. 14 Opti plc Costs One-year replacement: PV = 20,000 – 6,000/1. 1 = 14,545 AEA = 14,545/0. 9091 = 16,000 Two-year replacement: PV = 20,000 + 6,000/1. 1 – 1,000/(1. 1)2 = 24,629 AEA = 24,629/1. 7355 = 14,191 Three-year replacement: PV = 20,000 + 6,000/1. 1 + 8,000/(1. 1)2 + 4,000/(1. 1)3 = 35,072 AEA = 35,072/2. 4869 = 14,103 Four-year replacement: PV = 20,000 + 6,000/1. 1 + 8,000/(1. 1)2 + 10,000/(1. 1)3 + 10,000/(1. 1)4 = 46,410 AEA = 46,410/3. 1699 = 14,641 The optimal replacement cycle is 3 years.  © Pearson Education Limited 2008 9 CFML_CH04v3. QXD 29/7/08 17:27 Page 20 Chapter 4 THE DECISION-MAKING PROCESS FOR INVESTMENT APPRAISAL LEARNING OUTCOMES The main outcome expected from this chapter is that the reader is aware of both traditional and discounted cash flow investment appraisal techniques and the extent of their use. The reader should also be aware that these techniques are a small part of the overall capital-allocation planning process. The studen t is expected to gain knowledge of:  ¦ the empirical evidence on techniques used;  ¦ the calculation of payback, discounted payback and accounting rate of return (ARR);