Frq Articles of Confederation Essay

The Articles of Confederation from 1781 to 1789 did not provide the United States with an effective form of government because of its problems in terms of domestic policy, foreign policy, and economics. Domestic policy, or the set of decisions that a government makes relating to things that directly affect the people in its own country, was not adequate enough to solve strife between states. The Articles stated that state legislatures chose representatives for the house, rather than the people themselves. This began to lean toward the British practices of virtual representation, which the U. S. fought a war to be rid of. Another problem was that each state only received one vote, which was unfair to the larger states with a greater population. With a super majority required to pass laws, almost no laws were passed because no one was able to agree. The lack of federal courts also made it difficult to solve disputes, more specifically those between states, making them all grow more independently rather than as a unified nation. Foreign policy was a mess under the Articles of Confederation. The states were unwilling to give up their land and power as they were afraid that is the federal government gained any more power then they would return to a monarchical type system. With no president, there was no figure to enforce laws or make negotiate with other countries, and the governors were only concerned with the welfare of their own state, preventing the states from becoming more unified. Because the federal government lacked any power, it was impossible to solve the problem with the Mississippi river and fishing rights, and there was no one to stop Shay’s Rebellion. This lack of power caused great fear that the British could easily come and take us over once again. Massive debts had piled up from the Revolution and from starting a new country, so states were looking for a way to pay them off. They began printing their own currency, only to cause massive inflation and difficulties trading both with other nations, and even from state to state. This inability to trade caused further problems, and they went into a recession. This all resulted from states holding most of the power, rather than their being a balance between state and federal. As the states did not want to lose their power, they would not give up any land to the federal government even if it were to pay off some of its debts. Congress did not have the ability to tax, causing further economic strain and making it difficult to pay off their many debts.

One Acre Fund

ONE ACRE FUND: CASE STUDY The scene is Bungoma, Kenya; Moises Postigo is a buyer interested in purchasing fertilizer on a large scale for his not-for-profit organization the One Acre Fund (OAF). OAF’s mission is to provide fertilizer to farmers â€Å"who have nothing† on a credit like system and when the farmers produce their crops a percentage of their supplus would be returned to OAF. Eventually the farmers would no longer need a â€Å"free hand out† and will be able to support themselves and their families without putting further strain on the government and the economy.When first looking at Kenya, Postigo had five different suppliers that all met certain criteria he had for doing business. He narrowed down the suppliers by contacting them and asking them for a RFQ. He then, with his knowledge of the market and his product as well as coming to the table prepared, negotiated the fertilizer to an acceptable price that could be offered to farmers enrolled in the OAF program. 1. Fertilizer is a commodity – why did Postigo spend so much time developing a relationship? Shouldn’t he have just set up an auction?Postigo did his homework and understood that developing and building relationships is a very important dimension in the Kenyan culture. â€Å"Kenyan culture’s emphasis on relationships and hierarchy stems from the importance of family. Kenya is a place where you need to get to know people†¦in a room with twenty-five people, you need to shake everyone’s hand† (Negotiating, pg 3). Postigo realized that most of his potential suppliers we located in Kenya. He also knew that if he could make a deal with a vendor in Kenya then the transportation costs would be much lower, thus creating a little more wiggle room for his BATNA.Postigo grasped the importance of building relationships from a different, more strategic purpose. OAF’s short-term plan incorporated rapid growth with regards to the small fam ily farms, which required rapid growth in their requested quantity of DAP. Postigo recognized that in building a relationship he was really opening up their opportunities for the future. If he could guarantee larger batch orders in the future, then he might be able to use that leverage to talk the supplier into lowering the current price.Postigo knew that establishing his desire for a strong relationship would pay off in multiple ways, both satisfying the cultural status quo while also putting a strategic plan into place to realize cost savings in the future. 2. What was Postigo’s BATNA to reaching a negotiated agreement with Dehvi Medji and Sons? During the negotiations for fertilizer, Postigo was concerned with three major issues: delivery date, price, and the ability for growth into the future. Keeping these things in mind, it seems that the best alternative to a negotiated agreement would have come from the current market prices of fertilizer in the area.If he was not abl e to come to an agreement with any of the suppliers and negotiate a better contract for OAF, then Postigo would simply buy the fertilizer at regular market prices. According to the research, in Nakuru, where both the cost of fertilizer and the cost of transportation were taken into consideration, a 50kg bag could be purchased for 4,000 Ksh (Negotiating, pg 6). This cost of 4,000 Ksh would have been the BATNA for Postigo’s negotiations; However, the BATNA could also have been found in one of the other vendors that were being looked into.If these other vendors had offered him a reliable price then that value could have been seen as Postigo’s BATNA. 3. Should Postigo have spent the time and money to meet face-to-face with all five potential vendors for the purpose of telling them about One Acre Fund, rather than sending them an e-mail? Working for a not-for-profit organization, Postigo understood that he needed to save money wherever possible. Meeting with the vendors in person might have had a larger effect on empathy throughout the negotiation. He might have been able use that to his advantage, but in the end, the benefit would not have outweighed the cost.Postigo contacted five vendors, four of which came back with bids. The first scenario where the cost outweighed the benefit: had he traveled to the fifth vendor, it would have been a complete waste of time and money. Secondly, as soon as Postigo informed the potential vendors of their expected delivery date, a second vendor dropped out of the running, stating that they would not be able to make the delivery date. By sacrificing the face-to-face meetings, Postigo saved a large amount of time and money while still attracting 3 potential vendors; eventually leading to a deal that, from his standpoint, was very successful. . Followup question: Did Postigo pay particular attention to the other party’s needs in the phone calls with Dehiv Medji? Postigo did a very good job of paying attention to Dehiv Medji’s needs throughout the negotiations. They spoke about the affect the Kenyan government might have on both parties, understanding the government subsidies could cripple both parties. He brought up Medji’s opportunity to grow and wanted to be involved in their growth, â€Å"he asked about growth prospects†¦indicated that the two organizations might grow together† (Negotiating, pg 7).Postigo negotiated in a fair and cooperative manner, providing flexibility on delivery dates and transportation costs. â€Å"One of the biggest appeals of Dehvi Medji to OAF was its willingness to fix a price in November for a January delivery† (Negotiating, pg 7). Postigo was very aware of the other party’s needs and acted accordingly. He felt obliged to make the negotiation a win-win scenario and when all was said and done, he did just that. 4. What do you think about Pastigo’s sharing information with Dehvi Medji about OAF’s strategy for the future?Was this a good thing to do? Is this a good way to develop a relationship? In the situation that Pastigo was in an open discussion about the long term goals of the not for profit OAF was a valid opening strategy. It gives Pastigo a fair amount of leverage epically since OAF is planning to have a large amount of growth in the near future, that information alone allows Pastigo to negotiate much harder for present prices with the perceived promise of future growth. It is also a valid and simple way for Pastigo to begin building a relationship with the supplier.By opening with a good amount of information, especially with a local supplier, OAF as an organization can leverage the fact that they are trying to grow the amount of fertilizer used by a large amount of farmers which is good for the fertilizer suppliers. This was also an efficient means to build the relationship the OAF was hoping to have with their future supplier, by showing that they were open and upfront with bo th the plans and goals of OAF any possible relationship would from more easily. All in all by being open from the beginning Pastigo put himself in a good position to conduct the negotiations. . If Dehvi Medji’s price had been good but not the best, would you still have recommended that Postigo try to negotiate with Dehvi Medji? As we have mentioned before, Postigo was concerned with three major issues: delivery date, price, and the ability for growth into the future. Taking into consideration all of these issues, it could be seen that Dehvi Medji met the other qualifications for a good supplier in that they could meet the proper delivery schedule in January and they were a small company that had the ability to grow alongside OAF going into the future.Price was only one of the concerns that Postigo was looking at. The case study goes on to state that â€Å"in previous fertilizer negotiations between OAF and Dehvi Medji, the company had settled for 10 percent off its initial o ffer† (negotiating, pg 7). This indicates that although the initial bid that Dehvi Medji produced might have not been the best, their company was proven to have wiggle room during the negotiations process and could possibly still be convinced to lower their price to become the best price.Although Dehvi Medji might not have had the best initial price coming out of the initial requests for proposals (RFPs), their initial price could be negotiated and they met the other requirements, delivery schedule and ability for growth in the future, that OAF was looking at. Our recommendation to Postigo would be to still enter the negotiation phase with Dehvi Medji, regardless of the initial price bid, in order to further scope out the qualifications of the supplier and possibly discover all of the benefits that they have to offer. . OAF’s founder, Andrew Youn, is a MBA. Given the importance of low-priced, good-quality fertilizer to his company’s ability to achieve its goals, should Youn be considering alternatives to buying from a handful of Kenyan wholesale suppliers? What might those alternatives be? The importance of low-priced, good-quality fertilizer was a major component to the success of the companies but it is doubtful that it was the only goal of the not for profit.The goal of the OAF is to help the local small plot farmers become more self-sufficient and by choosing local wholesalers over a foreign supplier can build the fertilizer industry in Kenya allowing local farmers to have better access even if the OAF was to leave the country. It is quite likely that Mr. Youn did consider other options during the start-up process but in the end decided local suppliers would be a better option. An option that they may considered would be using a foreign wholesaler and bulk ship the fertilizer to Kenya and then ship it to the warehouses to break down and disperse to the participating farmers.This option may have saved them enough money on the base produc t to offset the increase in shipping and handling cost to get the fertilizer into Kenya. This may not have been a viable option in this opening round of negotiation due to the limited amount of fertilizer the OAF was purchasing at the time. 7. Postigo informed the case writers that the Kenyan government did implement its program of buying fertilizer in bulk to distribute at reduced prices to farmers, but that this program did not really affect OAF farmers because they could not afford to travel to government depots and did not have the cash to buy or transport the fertilizer.However, this action by the Kenyan government might have secondary effects for OAF’s negotiations with fertilizer suppliers in the future. What do you think those secondary effects might be? There are a variety of secondary ramifications for the OAF when negotiating future fertilizer purchase form local suppliers due to the government subsidized supply. One obvious problem in the risk that the a current o r future supplier may not be able to stay competitive in the fertilizer market in Kenya and will go out of business, forcing the OAF to search elsewhere for their supply of fertilizer.Another less gloomy prospect is with the government subsidizing fertilizer in Kenya the OAF may have a better bargaining position with the local wholesalers, allowing the OAF to purchase more fertilizer with the same investment helping the program to expand faster. This choice by the Kenyan government may also allow the OAF to negotiate with the government to receive the discounted price and focus instead on the transport of the fertilizer from the government depots to the farmers who need it most. 8. In what way did Postigo use his awareness of hierarchy in Kenyan culture during his negotiations with Dehvi Medji?During the second round of negotiations which were exclusively with the Dehvi Medji firm the awareness of the hieratical culture of Kenya was used to help set a price from which Postigo could begin the round of negotiations. This was seen in the sentence on page seven of the case study where Pestigo from looking previous negotiations knew that Dehvi Medji sold for roughly ten percent less than their opening offer. This was an assumption made due to the fact that Postigo was working with decedent of the former managers who made this 10 present discount a way of business.There is also the fact the before the negotiators began discussing price Pestigo first discussed the increase in the price of fertilizer and the effects it was having of the OAF, the likely hood of government intervention, and finally the growth prospects of both the OAF and Dehvi Medji. Only after all of this opening information was shared were the negotiations for price and transportation brought into the negotiation. Both of these considerations made by Pestigo showed he was prepared to enter negotiations with Jiten Patel and allowed them both to come to an agreeable solution. 9.What do you see as the s trengths and weaknesses of Postigo’s negotiating strategy for fertilizer in 2007? Postigo had many strengths and weaknesses in his attempt of his first large acquisition of fertilizer for the OAF. His main strengths were the facts that he was knowledgeable about his product and the suppliers he was dealing with as well as the fact he was prepared going into the negotiation process. His main weakness included the fact that he had not built a relationship with his Kenyan suppliers knowing far in advance that that is an essential procedure in Kenyan business culture.He also failed to have realistic expectations when asking a smaller company like Delvi Medji and Sons to potentially supply such a large customer base. The fact that Postigo did not build a relationship could have resulted in Dehvi Medji and Sons’ Jiten patel(the supplier) agreeing with Postigo only to avoid confrontation knowing far in advance they would not be able to meet his needs. Postigo’s knowled ge of the wholesale prices as well as his market and expected forecast did allow him however, to accurately predict OAF’s growth and was contributed heavily to his success of getting the fertilizer under the market price of 3,263 Ksh/50kg bag.He was able to work the suppliers down through both price competition but more importantly by providing a â€Å"win-win† situation for both him and the supplier. His main incentive was by doing business with OAF the supplier would grow with the OAF as it expanded its market to 30,000 farmers. He in return expected a supplier to reduce their costs helping the OAF. Even though Postigo had some weaknesses in his overall negotiation strategy by not meeting face-to-face,In the end, Postigo successfully worked to an agreeable solution where both parties benefited in 2007.

Importance of Time in Chinese Culture Essay

The importance of time is always dependent on the different perspectives of people’s origin, particularly culture. â€Å"Time is one of the most important bases by which culture rests and all other activities revolve† (Riggs et al 31). Different cultures handle time differently. In the past, time was measured in daylight, darkness, or in seasons; however, nowadays, time has become more important and more complicated. Yet, no matter how complicated it has become, it always boils down to the influence of culture, just like China, one of the countries with a very rich culture. The impact of modernization in China on the changes of Chinese’ behavior is significant. However, these changes in their behavior have had a more significant impact on their values. Indeed, Chinese seem to have never given up one of their most important cultural characteristics, Guanxi, which up until now, remains as an important Chinese business element. In the advent of globalization, Chinese has kept and reinforced this unique characteristic even in the most important socio-cultural changes. Yes, China has indeed undergone substantial cultural changes; nonetheless, with regards to the thinking and dealing process, modern China remains rooted to its traditional Yin Yang approach, and this is reflected on their shrewd use of time to keep their relationship intact. Because Chinese people value relationship more than anything else, as they believe that this could lead them to success, it is logical to expect that the Chinese society concentrates on fluid/multi-focus time value. Chinese people are both famous and infamous in different negotiations for their wise use of time as their bargaining tool. Chinese are known to have adept ability to run down the clock because they prioritize their relationships with their associates or business partners first. This way, they know that the value of relationship or guanxi continues. Moreover, Chinese can afford or stand to play the waiting game, provided that there is always someone left to invest and spend for them. Cultures around the world have developed their own way of responding to time. The dimension for time orientation is based on two aspects; the relative significance the culture gives to its past, present, and future, and its way of approaching the time. China has indeed embraced globalization since the last three decades. Despite this, its stronghold to its culture is still very evident. This is because China is considered as a past-oriented culture country. Countries that fall under this category have a culture that is largely leaned towards the past; they see their future as a repetition of their past experiences. Moreover, they have high respect and regard for their collective historical experiences and their ancestors. As per David Thomas’ description of the country, China embraces its tradition and culture of ancestor worship and has strong pride of its customary and cultural persistence for over thousands of years (73). The Chinese society holds the perspective that their past is their guide on how to live their lives in the present. According to an old Chinese proverb, â€Å"Consider the past and you will know the present† (Quotations). Work Cited Riggs, James, et al. Industrial Organization and Management. Manila, Philippines: McGraw-Hill, Inc. , 1980. Lo, Vincent. Chinese Business Culture: Guanxi, An Important Chinese Business Element. 17 March 2005. 01 May 2009 Thomas, David. Cross-Cultural Management: Essential Concepts Second Ed. California: Sage Publications. 2008. Quotations. 14 February 2008. 01 May 2009.

National Interests Vs Human Interests in Takastand Case Study

National Interests Vs Human Interests in Takastand - Case Study Example Here, the response of the entire world to the human interests issues of people in Takastand would play a major role. However, in planning the international conference it is important to first analyze the issues of Takastand. Case study reveals that the primary issue of the country is unnecessary political influence which has subsequently increased breach of human rights from the side of government officials. This paper aims to plan the international conference for the human security problems in State through following three steps: Economic: Economic stability and long term sustenance plays the most vital role in bringing peace and prosperity to a nation (Strauss-Kahn). This becomes even more significant when the state is facing various internal and external threats. Hence agenda of conference should be based upon the resolution that the residents of Takastand must be given equal employment and business opportunities. They must not be discriminated on the basis of ethical or religious background. Political: Currently the politics of Takastand are solely handled by one political party which is against the rules and regulations of democracy. Since this political party is also found to be supported by international criminal networks while enjoying complete authority over the police and military forces therefore it has started attacking the minorities and less influential social groups. These issues should be tackled through ensuring complete implementation of democracy by allowing different political parties to acquire same status in the national and provisional assemblies. Military: The issues pertaining to military in Takastand are actually associated with the super influential political party which not only discriminates people but it also practices illegitimate military control over them.

Bariatric Surgery & Type2 Diabetes Essay Example | Topics and Well Written Essays - 500 words

Bariatric Surgery & Type2 Diabetes - Essay Example The American Diabetes Association has reported that Bariatric Surgery should be considered for adults with Type 2 diabetes. Furthermore, Advocacy and Outreach report that observational studies show that weight loss surgeries can improve glycemic control and cause diabetes remission in obese patients suffering from type 2 diabetes (Taylor, 2013). Evaluation takes into account factors like implementation, assessment of needs, technology, mode of delivery, program fidelity and staff and personnel. In the case of bariatric surgery and type 2 diabetes, evaluation design will consider the factors like the availability of qualified doctors, risks associated with a surgery, obesity prevalence, and the circumstances that might lead to the establishment of surgery as the solution. The effectiveness of Bariatric surgery relies on a number of factors that should be carefully analyzed prior to surgery. The research will use evaluation design to determine the impact of Bariatric surgery on type 2 diabetes. Evaluation research is used to determine if a social intervention has achieved the desired results. The research proposals seek to determine the effect of Bariatric surgery on type 2 diabetes reversal. Evaluation research can be defined as, the systematic process of collecting and analyzing data about the quality, effectiveness, merit, or value of program, products or practices" (Gay, Mills, & Airasian, 2012, pg17 ). The aim of research is to answer the question, â€Å"What is the impact of Bariatric Surgery in Type 2 Diabetes reversal?† Evaluation research is suitable because it will also unbiased analysis of data and effectiveness of Bariatric surgery in type diabetes reversal. It will permit a thorough analysis of all relevant data and history to determine the effectiveness of Bariatric surgery. Data will be collected from observation, past

Personal Educational Philosophy Essay Example | Topics and Well Written Essays - 750 words

Personal Educational Philosophy - Essay Example Vicarious reinforcement is indirect reinforcement and does not come from without. It comes from the person himself so that it is also called self-reinforcement. Imitation and modeling as the terms suggest simple mean that a person learns what he sees. Models particularly are imitated. The model could be a parent, a teacher, peer, basketball star or even I whose behavior is imitated. My impact as a teacher being a role model in the classroom cannot be overemphasized. This is true in all aspects of learning that range from mechanical speech learning to the more complex learning of values. No matter how good I am on the theories of good speech if I do not talk well, the learners may not learn to talk correctly. In like manner, a good discourse on moral values like honesty will not do any good if the learners are witnesses of dishonesty in the classroom and in bigger society. Most observational learning studies have been focused on films and television shows. In fact, the researches of Bandura and Walters on observational learning included exposures of the experimental groups to films. Aside from this, I also adhere to Bandura's different models. Environmental model refers to the observations made of sexual reproduction among domestic animals like dogs, cats, chickens, and other including plants like vegetables and fruits. Parental instruction model ... Also included in this category are the peer groups through teasing, conversation, cursing, etc. Cultural model refers to the use of folk tales in order to illustrate the concept of size, the normative and "don't's" in verbal reference to sex; the use of language to identify basic elements of social organizations. The foregoing results reveal the modeling role of parents and peers which become especially important within the context of parents and teachers as authorities. In a society where children are left more and more with their peers, the latter's modeling could lead to more imitative sex-related and other forms of behaviors. In social or observational learning, Bandura emphasized four subprocesses; namely, attention, retention, motoric reproduction, and reinforcement. For any observational learning to occur, I believe that the model stimulus must be attended to. What has been observed must be retained if the model's behavior is to exert influence even after a period of time. Imitation follows only if the individual had motoric reproduction or actually imitated the behavior of the model. The last, reinforcement is internal rather than external. In this Bandura states that reinforcement is a motivational factor rather than a strengthening factor. Social learning theory seemingly explains many of our behaviors. The way we talk and walk - our gestures - many have been learned from the models that we have been exposed to. No wonder, children talk like their parents and resemble those of their parents. Friends, too, behave similarly. The social learning theory points out the crucial influence of television, radio, movies, and other forms of mass media which are fertile sources of models for

Case study 4-2 Virtually There Example | Topics and Well Written Essays - 500 words

4-2 Virtually There - Case Study Example Therefore the patients are able to draw on the knowledge of a lot of doctors. These doctors positioned in other locations can be acquainted with modern treatments or can have a new look on the treatment alternatives. The scenario outlines a real-time corporate shared data network. In this scenario, some of the other communication technology based facilities can comprise electronic repositories, electronic collaboration systems and video teleconferencing. In this answer I will present the possible ideas and suggestions which can be adopted by Dr. Esserman in order to successfully manage this virtual team. In order to successfully manage such team we need to take care of some the issues and areas, which are: (Turban, Leidner, McLean, & Wetherbe, 2005; Laudon & Laudon, 1999) Privacy/security: How will the privacy of patient’s data and information records are maintained? In a world which is more and more concerned with privacy, the privacy of patient records have to be addressed. Liability: Recognizing the extensive issues for medical malpractice, who will take the responsibility for problem cases? The students can react to physician who provides help as the preliminary point of contact; however it cannot be probable to consequently carefully restrict liability. Compensation: How will the project team associates be rewarded for their participation? For the team to effort over a long term, a number of systems will require to be planed to recompense the physicians for their time. As the quality of their contribution will carry on being significant for these virtual teams, there requires being a number of drivers for the physicians’ participation. Communication: How will the important data and information are communicated to the patient? Who will be accountable for up-holding the communication technology? Students can be worried about how the responsive information has to be

Europa Report Essay Example | Topics and Well Written Essays - 500 words - 1

Europa Report - Essay Example The Europa report film faces a lot of disastrous technical failures the lead to lack of communication between them and the earth mission control. Despite the series of very dangerous crises, the Europa crew continue with the mission of reaching Europa where they encounter a lot of scientific mysteries. On this mission, several scientific aspects were used which had different accuracies (National Research Council & Space Studies Board, 28). One of the scientific aspects used included the Radio Science Subsystem. A radio science subsystem is a subsystem that is placed on board of a spacecraft (Carroll & Michael, 76) .The RSS is placed on board for purposes of radio science. The radio Science Subsystem mainly uses signals to determine a medium like that of planetary atmosphere. The spacecraft transmit very high stable signals to the ground stations, receives signals from the ground stations or even both. The transmitted signals parameters are known to the receiver and so the propagation medium or the relative motion of the spacecraft is attributed to these parameters (National Research Council & Space Studies Board, 59). The Radio Science Subsystem was used in the Europa to determine the degree two-time dependent gravity field, to recover K2 amplitude at the Europa’s orbital frequency to 0.003 absolute accuracy, and the phase to 1 degree. The RSS functions include determination of the gas clouds that include the atmosphere and the aura of plasma which surrounds the sun also referred to as the corona. The RSS also characterize gravitational field which explains that there is a body that extends into space around itself. RSS estimates masses of celestial satellites and sizes of particle fields and also the density of ion fields (Carroll & Michael, 99). A magnetometer (MAG) is an instrument that measures vector magnetic field where the information is used to determine the boundaries that are between various plasma regions. The MAG also

Twentieth Century Fiction Assignment Example | Topics and Well Written Essays - 1750 words

Twentieth Century Fiction - Assignment Example Under ordinary circumstances, petite narrative happens to be less intricate than work of fictions. In most cases petite narrative is oriented towards a common incident; it has a distinct background, a small numeral of attributes, and stretches for a very minimal interlude. In protracted forms of fiction, stories happen to contain various core elements of dramatic configurations. These include explanation (backdrop preamble, scenario as well as central characters); impediment (this is when the conflict is introduced); mounting accomplishment, crisis (this is a critical moment when interest in terms of the conflict as well as the point with the most accomplishment); climax (this is the point of elevated interest with regards to the conflict and the point with most action); declaration (this is when the conflict is resolved) as well as ethical, DiMaggio R. S (1976). Additional emblematic, nevertheless, is an immediate establishment, with the story that begins in the hub of the accomplishment. In the case of longer stories, plots of stumpy stories do have climax, conflict, or turning point. Nonetheless, the conclusions of most short stories are abrupt and open and might or might not have an ethical or pragmatic lesson. Petite narrative fall under fastidious subordinate-grouping referred to as parables especially when conveying particular moral as well as ethical point of view. This form of stumpy narrative has been employed by spiritual as well as religious cream of the crop globally to instigate, inform, consider, and also in refining their admirers, DiMaggio R. S (1976). Length Establishing what exactly differentiates a diminutive story from longer fictional shapes is anomalous. Standard description of a petite narrative is based on the fact that it should be read in a given session. An allusion of reference for the science fiction genus author; the methodological fiction as well as Fantasy authors of America illustrates dumpy chronicle span in its Nebula Awards for methodological literature. The terminology dumpy narrative in modern application refers to a work of fiction that does not stretch beyond 20,000 words and not less than one thousand words. Accounts that are less than 1,000 words are normally known as petite dumpy fiction or diminutive, The post-war era The interlude subsequent to World War II witnessed an enormous blossoming of fictitious dumpy fiction in the history of the United States of America. The New Yorker continuously distributed to bring out the works of the form's leading mid-century practitioners, in addition to Shirely Jackson, with the story, The sweepstake, published in 1948, elicited the strongest rejoinder in the magazine's chronology to that moment. When life magazine published Ernest Hemingway's elongated petite chronicle (otherwise novella) the elderly chap and the aquatic in 1952, the subject that constitutes this narrative, the issue restricted in this chronicle sold over five million copies in 24 hours. Literary as well as communal uniqueness played an extensive function in much of the diminutive narrative in the sixties in the previous century. Phillip Roth in addition Grace Paley cultured idiosyncratic

Source of Finance Essay Example | Topics and Well Written Essays - 1000 words

Source of Finance - Essay Example However interest on overdrafts is usually greater than interest on other loans and banks even charge an overdraft facility fee. The company should therefore put all these in to consideration and make sure that the benefits to be achieved from the overdraft outweigh the costs associated with taking the overdraft. Also, overdrafts do not cover all financing requirements. The company should therefore assess whether its financing requirements are long-term or short-term. If short-term, then an overdraft can be a right source of funding but if long-term then an overdraft would be an inefficient way to raise funds since the overdraft would be required on demand by the bank. If that be the case the company might go into financial distress and subsequently bankruptcy. In addition, collateral security might be needed by the bank in the form of a tangible fixed asset or against personal guarantee provided by the directors. It this case, the company should consider the nature of its fixed assets and asses which assets it can put up as collateral. Another determining factor for the overdraft is the firm's cash flows, timing and receipts of payments, sales trends and other cash flows. By carefully analysing all these information the company would be able to arrive at a better conclusion as to whether to engage in the overdraft or not and if the answer is yes, the amount and when the overdraft is to be repaid. Before engaging in an overdraft, therefore, the company has to carefully study the costs of the overdrafts and benefits from the investment it wants to finance with the overdraft. Should the costs outweigh the benefits then it should not engage in the overdraft. However it should engage in the overdraft facility only if the benefits substantially exceed costs. (http://www.tutor2u.net/business/finance/finance_overdraft.htm). Existing shareholders The company can also raise the much needed 10000-euro through equity finance Finance raised from shareholders in the form of ordinary shares and reserves, as opposed to non-equity and to borrowing. (John and Nicolas, 2005) Handy Andy's corner shop can also raise its 10,000euro by making contact with a business angel.

Judy Bacas Great Wall of LA (Historical and Geographic and american Essay

Judy Bacas Great Wall of LA (Historical and Geographic and american dream aspect) - Essay Example The community in which it exists is also highly diverse, including residents of Mexican, Indian and African descent, making a history of this nature seem entirely appropriate for the area and necessary for the state. Each panel depicts a different event in California history while can be pieced together through the 1960s. By looking at the panels that depict the California Gold Rush and California’s role in World War II, it is possible to see how the American Dream was shared by people of all races in the first and defended by people of all races in the second. The panel depicting the California Gold Rush is an important point in history as it is the event that brought numerous white settlers out to the west to displace those individuals already living there. Panels before this depict the level of Indian and Mexican settlement that had already taken place, as well as Spanish domination. However, with the discovery of gold, more and more white settlers moved in from the east seeking their own fortunes. The panel begins innocently enough with the depiction of the discovery of gold and the arrival of gold seekers by ship. Here is the American dream in action, with people of all colors coming to the California coast to seek their fortunes and pursue the American Dream of some property, a home to call their own and the ability to make their own livings. Included in the image are portraits of Mifflin W. Gibbs, who is identified on the wall’s official website as the publisher of the first Black newspaper, and Mary Ellen Pleasant, also iden tified on the same site as a civil rights activist who helped defend Blacks arraigned under the fugitive slave laws. While the inclusion of these two figures is intended to indicate the positive impact of black people on California history, it also serves to remind viewers of the limited number of people of color that were able to have such an impact on the people of this time period. The inclusion of a

Electronic Commerce Essay Example for Free

Electronic Commerce Essay Introduction: E-Commerce is basically using the Internet to either buy or sell goods and it has been revolutionizing the way business is controlled. In recent times Internet has evolved so huge it has lead to development of lots of new web based technologies one of them, which is most used, is E-Commerce [1]. Online shopping is an example for the most used forms of e-commerce, which companies like Amazon or eBay offer. E-Commerce in Modern Business: Nowadays businesses that do not have an EC model have started adapting automating all the manual operations overriding it by e-commerce, since every person would want to save time and money, and these 2 factors are very important in a person’s life. Consider a person who wants to purchase a laptop, he does need to go to a store physically to buy it, he can buy it online within minutes, the laptop company would already have an online shopping website, the person can just browse for available laptops which contains all the information regarding the product right from color, weight, configuration, hardware and software’s, best part is he can also change the configuration online as he wants. Few companies offering online shopping are Dell, Apple, Hewlett Packard, Lenovo and many more. EC gives the people the added advantage to compare various products with one-click, they can either buy or sell their products. Usually sometimes people might not find all the brands in one particular store and now since EC has evolved to an extent where most of the brands offer online shopping a person is not limited to a geography and also M-commerce which is basically using wireless devices or handheld devices to do online transactions. M-commerce has been growing exponentially over the years. Smartphones is the new trend, people started creating Apps for their business, which can be accessed through mobiles, everyone can easily use the App on their smartphone to buy food, clothes, book flight/train/bus/cab etc. It is more  like people can buy anything from the device on the go if they have Internet [1]. E-Commerce in Social Media: Social media has really changed the way we communicate it has replaced all the old age types of communications like writing post cards or letters. Internet has a big role in this change; people use social platforms like Messages, Watsapp, Twitter, YouTube or Facebook for communicating. Many people have still have a doubt how would social media increase the sales of a business. It is simple since almost everyone uses some kind of social networking platform for communicating; these platforms really bring awareness, they showcase daily deals as advertisements, people can keep a tab on the latest products releasing from a brand, business use celebrities to endorse their brands, customers can directly interact on these platforms with others and can discuss the plus or minus of a product or a service [2]. So businesses can setup up an advertisement on a website or social platform to promote their product. Feature for a person or business to promote a product or service ranging from 5$ per day to 100$ per day, based on the payment the audience for the advertisements will be higher. Most of the social networking platforms make money through advertisements. LinkedIn one more social platform for professionals where people from various companies meet and greet each other, participate in technical or non-technical discussions, but one feature where e-commerce is involved in LinkedIn is, it offers a premium profile for users in which a person will have access to apply for more number of jobs and recruiters have full access to post a new job, search for people who need a job or who are considering a job change. This way EC has a very important role in social media too. International Barriers for Success of EC: 3 International Barriers to EC which and their role in EC’s success, one of them is no limitation to Geography. In an e-commerce model when the website  offers shipping to not only domestic places but also internationally, it really helps increase the revenue [3]. Consider a product like Cordless Warming Tray, which is available in America but not available in countries like India, so if anyone wants it, buying the product is easy, any person can purchase the item online through Amazon and enter his/her international address for shipping. E-commerce websites also offer an option for faster shipping if the person needs a product immediately for which the person should pay a little more for the shipping costs. Business are now seeing the opportunities in international markets and have started their business setup’s in those countries, like Amazon did in India recently investing 2 Billions dollars and Uber too a cab service business which is based out of America also started its business in India and few other countries. Success of EC can be calculated here by the increase in revenue from international markets. Only few companies are offering this kind of non-limitation to geography like Amazon, Barnes and Noble etc. Organizations that only offer shipping fewer countries include The Limited, J-Crew and few others. Second type of international barrier is language, considering most of them speak English there might be a section of people who do not speak, read or write English. So to offer e-commerce for those people or to those areas/countries e-commerce websites started adapting their software or website in such a way that a user who has no knowledge of English would be able to search for any product he wants without the need to type in English, he would be able to do it in his own mother tongue and the price of the product is shown in various currencies which would help buyers to easily compare the price. In this type of barrier the number of users base for each company increases which ultimately increases the revenue too. Since now EC model would not only have customers from places who speak, read or write English but also from places where they can use their local language to buy or sell goods, this is very healthy in the EC model. Third type of barrier is for a successful EC model is Legal battle and Infrastructure, as we talked about no limitations to geography and language, so when a company sets up a EC model in different countries the first and foremost thing they will need to comply with is the legal rules of that particular country. Following the rules and regulations legally would really help a company offering EC to run their business smoothly without any issues or hiccups. There have been lots of issues for few companies offering EC in various countries, consider Facebook which is a most used social platform all over the world had to fight for legality issues in few countries since people’s information was visible for everyone. One more example would be Google Earth, which faced a lot of criticism and legal issues and is now banned in India, since it was very helpful for some organizations, which are under the radar of military forces. There are success stories like Amazon, EBay and many more who have been successfully doing their business in different countries. These companies have setup their websites domain separately for each country. Like www.amazon.com is used globally, www.amazon.au is used in Australia, www.amazon.in is used in India, these sites have their own infrastructure setup to control the load of users. Since EC systems should be available 24*7 for them to gain the users reliability and confidence also because users are all across the globe they cannot afford to lose business, they need to have their website up and running all the time. To establish that they need to have heavy configurations, storage and network bandwidths and a team of technical experts who would have the capability to stop hackers from attacking their websites and access risk management techniques well before anything unusual happens. To sum up EC has been growing and will be growing exponentially in today’s and tomorrow’s business, since the ease of doing business has become very easy and as discussed time and money are important which can be saved from EC. Social media the main way of communicating with each other has also benefited from EC in a big way, since billions of users use this platform the revenue generated from the social media advertisements has made some of the start up companies like Google and Facebook to grow from a small scale companies to one of the biggest branded company and revenue generating companies all over the world. The international barriers have also as discussed added up to the success of EC. There might be limitations to EC like security issues and protecting the website or software from hackers but  it all depends on the organization on who attentive they are, how good their staff is in preventing such kind of attacks from happening. REFERENCES: [1] Turban, E, King, D (2012). Electronic commerce 2012: A managerial and social networks perspective, (7th ed.). Prentice Hall, New Jersey, USA. [2] R. T. Wigand, (1997), â€Å"Electronic commerce: Definition, theory, and context,† The Information Society, vol.13, no. 1, pp. 1–10, New York, USA. [3] Farhoomand, AF; Tuunainen, VK; Yee, LW, (2000), â€Å"Barriers to global electronic Commerce: A cross-country study of Hong Kong and Finland, vol. 10 n. 1, p. 1-40, Hong Kong.

Reflective Essay NU-AGE

Reflective Essay NU-AGE NU-AGE is a module that has had a profound influence of my understanding about the concept and self-perception about ageing. Having to learn how much more biology, lifestyle, clinical aspects, technology, living conditions and solutions can directly or indirectly alter how an individual age. Ageism in one major concern that was given much attention to in the module. Ageism was thought be the direct action of our society towards the ageing population(reference). For the past century, the institutionalisation and the idea of making the older population redundant was a major concern to both the economy. Many had to opt for poor relief, begging, paid work when possible, charity, growing food, use of common rights and help from family. Unequal access to improved occupational and private pension have been a concern to how the ageing population had access to an income to support them through later life has contributed much to the of the negative concept of ageing. This led the population to have a stereotypical view of the prevalence of loneliness at older people that their prevalence of illness and disease were more likely higher and older workers are less efficient. Despite all these negative stereotypical views positive ideas and views have been acknowledged, but many recogn ise that the ageing population have a perceived superior wisdom from experience. Health Nutrition and health has an undoubtedly profound aspect on how progression of ageing occurs. Research has shown that people in poorer parts of England lived on average 7 years less than those of in richer parts. This has been affiliated with the qualities of life the two regions face and the conditions they are assumed to face in such regions. The poorer regions are proposed to be subjected to adverse environment conditions, more stress and poorer diet. Richer regions are assumed to have the direct opposite qualities of those of the poorer regions. Research has proven that the genotype of an individual has a profound effect on the progression of ageing of an individual, such as having the Age-1 gene. All these factors are known to contribute oxidative stress, metabolic stress and inflammation which known to affect the trajectory of how ageing progresses and the prognostic implications in later life. It has been proven that diets low in calorific value and higher in unsaturated fats a nd omaga-3, such as the Mediterranean diet, showed marked decrease in the causes of mortality such as cardiovascular disease, neurodegenerative diseases and cancers. Physical activity has been a key player in the progression of how we age. Mental health has been shown to be related to how much an individual is involved in the arts and society. For example, risks of showing onsets of dementias have been shown to decrease with engaging in thought and social processes. (reference) This clearly shows us the ageing is plastic. This relates very strongly to the Clinical Ageing and Health module I took this year in Biomedical Sciences, iterating much of what was covered but in a simplified coherent manner. Ageing affect individuals related to the ones ageing. Residents in the care homes haves generally shown that there are losses of formal association with members they have had earlier in life thus leading to increased prevalence to neurodegenerative disease and loneliness. This has been addressed by providing and involving the ageing population in the arts whereby bonding with those of a similar age, ethnicity and class which provides a strengthened emotional support, and social identities. Wealth Engagement of the ageing population has been a paramount interest of discussion over the years. Establishments of capital development projects were one of the topics of interest that has been of great interest to me, especially one EX-BEX member shared his thoughts of how he thinks that life savings in the bank might not gain as much capital gains as when other forms of investment out-weighed the risks since equity has been rising for the past century. Through this module, I have truly come to grasp of the global scale of what society is expecting from ageing, how it is perceived and what we as the younger generation can implement to address issues in relation to the current ageing population and to the younger generation to age in a graceful manner. I have learnt that ageing is not a concept to be worried about and that it should be regarded in a positive aspect to consider in life. Being an international student, I have come to experience thoughts and aspects of ageing in the UK and through other international students which I propose to implement in the Seychelles. Seychelles has had a graceful ageing population two decades ago, unfortunately the can no longer be said with confidence. Prevalences of age related diseases are rising and life-spans are decreasing. No strong investigation has been made to determine why such decline is occurring. I feel that it is my duty as a Seychellois to lead the way to investigate and support th e ageing population into the aspect of graceful and healthy. My hope is to promote the Seychelles as an example to the world that ageing is in our control and we should not fear it. My dream is to see the ageing population of Seychelles to be healthy, active and vibrant thus defeating the ideology and perception of ageism.

Examining The Social Structure Theories In The Economy Criminology Essay

Examining The Social Structure Theories In The Economy Criminology Essay Social structure theories assert that the disadvantaged economic class position is a primary cause of crime.   The theories state that neighborhoods which are lower class force of strain, frustration and disorganization that create crime (Shanali-Justicia). Social Disorganization, Strain Theory and Culture Deviance are a few of the social structure criminology theories that are used to explain crime. Other social theories that fall into this category are Culture of Poverty and the truly disadvantage theory. The theory of social disorganization is that crime and delinquency is caused when communities fail. There is a breakdown of families, church, schools and government in the community. Social disorganization theorizes that these relationships reinforce positive behavior, a sense of community responsibility and concern for the social network within a close area (Hardy, 2010). When these relationships breakdown or do not exist the communities and its inhabitants lose its sense of structure and this is believed to be the causation of crime and delinquent behavior. The cycle of Social Disorganization is thought to start with poverty, where there is lack of opportunities and racial discrimination. The lack of opportunities breaks down the social institutions and organizations and this leads to the erosion of traditional values. This breakdown leads juveniles to seek the acceptance from peers and a sense of belonging from gangs. Once these gangs form there is a loss of social control or it b ecomes less effective. When this control is lost neighborhoods become more prone to crime and this detracts from investors which reduces opportunities in the community. Eventually this becomes the norm and this way of life is passed onto the next generation. The formation of criminal careers if formed and the cycle continues for some while others grow out of their delinquent phase. Populace in these disorganized areas can feel neglected, frustrated and ostracized from the economic mainstream, they develop feelings of hopelessness and anger which sociologist state are signs of strain (Siegel Welsch, 2008, p. 89). This strain develops and theorist state it leads people to commit criminal offenses, because they lack the opportunities for success. The opportunity for a better life seems to be beyond their reach, so people turn to deviant behavior to achieve their goals because they feel that society has let them down. Cultural Deviance Theory is a combination of both the effects of social disorganization and strain. It is thought that the lower socio-economic populaces create an independent subculture where they have their own rules and values. Juveniles in lower class neighborhoods adapt to their environment, they become cynical and have no respect for authority. Conventional values make little sense to a youth whose role models may include gun runner, drug deale rs and pimps (Siegel Welsch, 2008, p. 91). Teachers and other authority figures become secondary citizens to these juveniles and they cannot conform to the rules as other members of society do. These juveniles experience a form of culture conflict as a result they never achieve their goals and eventually get caught up in the life of gangs and deviant behavior. The populace of this poverty culture is marked by frustration of their environment. There is a lack of trust of police and government and this mistrust stalls people from this environment from seeking other advantageous opportunities or ones that are available to them. The results of this environment are depression and possibly psychological issues. Inner-cities that suffer from economic changes have an increase of crime; they become ingrained in a cycle of poverty, unemployment and crime. These people are considered the truly disadvantage living in communities with poorly organized social networks, alienated populations and high crime (Siegel Welsch, 2008, p. 85) Theorists such as Clifford Shaw, Henry McKay, and Robert Merton have similar views on social structure theories. While Elijah Anderson believed that juveniles committed crimes because of their socio-economic living conditions there were rendered incapable of achieving success (Siegel Welsch, 2008, p. 92). A juvenile turned to crime because it was their only way of achieving success. They feel that their only option is to join gangs and engage in behavior that is deviant. Clifford Shaw and Henry McKay believe that delinquency is mainly the consequence of a collapse of institutional, community-based controls (Wong, 2009). Shaw and McKay believed that people that lived in situations such as these responded to the disorganization of their environment. They believe that delinquent behavior was a result of social disorganization, because the neighborhoods they lived in were transitional neighborhoods. This was an area where there was a shift in population; the middle class neighborhood would transition to a mixture of lower class people. When this transition would occur the family would become rooted in the neighborhood and the values that they developed such as belonging to gangs and criminal behavior would be passed onto the next generation. Similar to Shaw and McKay, Robert Merton believe that society was the cause of deviant behavior, because society put pressure on people to achieve the American dream. Merton believed that society expected an individual to conform or either work within its structure. When a person cannot conform they become members of a deviant subculture. Merton argued that upper class children are less likely to commit delinquent acts because they have the means and ability to obtain an education and stable employment. While lower class juveniles do not have the same means they feel the social and psychological strain or anomie. Merton believed this condition caused juveniles to commit criminal acts to achieve their goals and even if they were offered the means to achieve these goals legally, they would reject those acceptable means of deviant ones (Siegel Welsch, 2008, p. 89). The theory that I most associate with my belief that juveniles commit crimes is the based Cultural Deviance theory. I think that juveniles conform to their environment and as a result have a lower set of goals and values than those of society. Juveniles that grow up in lower economic levels become hardened in their environment and develop an outer shell that shows no fear and have accepted because they play hard they will probably die young. These juveniles do not hesitate to use violence to get the message across nor do they consider the consequences of their actions. The goals that these juveniles set for themselves are reaching the top level in their gangs and increasing their drug sales. These juveniles cannot understand the concept of hard work and setting realistic goals like other members of society and because they fail to achieve success in life they are quick to blame the man for their failures.

Technology and Its Impact on Work-Related Stress Essay -- Technologica

Technology and Its Impact on Work-Related Stress Trends in organizational behavior have an impact on employees. Many factors in our daily lives can cause stress, but how does technology play a role in impacting stress? Does technology affect us positively or negatively? Is there anything unethical about technology and the way it is utilized in the workplace? This paper will reveal both the positive and negative impacts of technology on work-related stress and discover some influential ethical issues as well.   Ã‚  Ã‚  Ã‚  Ã‚  Organizations utilize various types of technology, from cell phones to personal computers and numerous types of technical software. In the article, ?Workplace Depression Blamed on IT Stress?, David Williamson states, ?Technology designed to help people work efficiently is now forcing employees into a state of digital depression? (Williamson, 2003, pg.9). Technology has the ability to prevent a person from escaping reality.   Ã‚  Ã‚  Ã‚  Ã‚  In the fire service, firefighters and staff personnel utilize cell phones, pagers, radios, and e-mail. As such, are rarely unavailable and it is not uncommon to be interrupted during one?s day off or vacation. While this inability to ?escape? may cause stress, these same types of technology can assist in relieving stress. For those who travel, cell phones can provide a feeling of safety since help can be a phone call away when the car breaks down. For working parents, there is often comfort in knowing the children and family will...

Computational Linguistics :: Essays Papers

Computational Linguistics Computational linguistics is a discipline between linguistics and computer science which is concerned with the computational aspects of the human language. This area of computer science overlaps with the field of Artificial Intelligence. Basically, computational linguistics is a series of programs that interprets human speech into words and actions. There are a couple of different areas of computational linguistics and those areas are theoretical computational linguistics and applied computational linguistics. Each one of those areas are divided up into more areas. Theoretical computational linguistics is composed of theoretical linguistics and cognitive science. This particular area deals with formal theories about the linguistic knowledge that a human needs for generating and understanding language. This area has advanced so much, and has become so complex that it can only be managed by using computers. With these computers computational linguists develop formal models simulating aspects of the human language and then incorporates that into programs. These programs that they write constitute the basis for the evaluation and further development of their theories. Along with these theories there is another part that plays a big role in theoretical computational linguistics and that part is cognitive sciences. What I mean by that is that part of these programs interprets what is being said and then it matches it up to what is in its programming. The other part of computational linguistics is called applied computational linguistics which focuses on the practical outcome of modeling human language use. The methods, techniques, tools, and applications in this area are often subsumed under the term language engineering or (human language technology. The current computational linguistic systems are far from achieving human ability of communicating they have numerous applications. The goal for this is to eventually have a computer program that will have the same communication skills as a human being. Once this is achieved it will open doors never thought possible in computing. After all the major problem today with computing is communication with the computer. Today’s computers don’t really understand our language and it is very difficult to learn computer language, plus computer language doesn’t correspond to the structure of human thought.

The Way Heany Uses the Theme of Nature to Achieve his Point in Poetry :: Papers

The Way Heany Uses the Theme of Nature to Achieve his Point in Poetry The way Heany uses the theme of nature to achieve his point is by using language, and devices. The poems I have read about heany are an advancement of Learning, and Death of a Naturalist. I will first talk about an advancement of learning. An advancement of learning is about a boy who is scared to cross a bridge because they are rats near it. He has always had a phobia of rats since he was young because over his bed in a farm where he used to live rats would run around in the ceiling right over his head and makes funny noises. Finally one day he over comes them and learns that there is nothing to be afraid about hence the name of the title," an Advancement of Learning. In the first two stanzas of the play he portraits a relaxing picture using the ugly nature. " I considered the dirty-keeled swans". The nature is also showing that the place is filthy and that he is standing well away from it. He also using enjambment when he connects the first and second stanza to show it is still slow and peaceful language. " Pliable, oil-skinned, wearing A transfer of gables and sky. Everything starts to change in the 3 stanza. The language is now moving fast because he is using devices like alliteration and assonance. " Something slobbered curtly close, Smudging the silence. " my throat Sickened so quickly. The words like sickened and quickly go smooth together giving a fast language. Also the nature is dirty and the nature makes us think that something slimy is coming out of the water. In the forth stanza the boy is running from the rat and another rat turns up so he is now trapped. The nature in this stanza just increases the ugliness of the rat. " tracing its wet Arcs on the stones. In stanza 5 heany uses a military word to show that the boy is in the

Kaplan P4 Mock Exam

ACCA REVISION MOCK June 2010 Question paper Time allowed Reading and planning: Writing: 15 minutes 3 hours This paper is divided into two sections: Section A TWO compulsory questions Section B TWO questions ONLY to be attempted Formulae Sheet and Mathematical Tables are on pages 3, 4, 5, 6 and 7 Do NOT open this paper until instructed by the supervisor This question paper must not be removed from the examination hall Kaplan Publishing/Kaplan Financial KAPLAN PUBLISHING Page 1 of 14 Paper P4 Advanced Financial Management ACCA P4 Advanced Financial Management  © Kaplan Financial Limited, 2010 All rights reserved.No part of this examination may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system, without prior permission from Kaplan Publishing. The text in this material and any others made available by any Kaplan Group company does not amount to advice on a particular matter and should not be taken as such. No reliance should be placed on the content as the basis for any investment or other decision or in connection with any advice given to third parties. Please consult your appropriate professional adviser as necessary.Kaplan Publishing Limited and all other Kaplan group companies expressly disclaim all liability to any person in respect of any losses or other claims, whether direct, indirect, incidental, consequential or otherwise arising in relation to the use of such materials. Page 2 of 14 KAPLAN PUBLISHING Revision Mock Questions FORMULAE SHEET Modigliani and Miller proposition 2 (with tax) ke = kie + (1 ? T)(kie ? kd) Vd Ve Two asset portfolio sp = 2 2 w a s a + w 2 s 2 + 2w a w b rab s a s b b b The capital asset pricing model E(ri) = Rf + ? i(E(rm) ? Rf) The asset beta formula ? ? ? Vd (1 ? T ) ? Ve ? a = ? ?e ? + ? ?d ? ? (Ve + Vd (1 ?T )) ? ? Ve + Vd (1 ? T )) ? The growth model Po = D o (1 + g ) (re ? g) Gordon’s growth approxi mation g = bre The weighted average cost of capital ? Ve ? ? Vd ? WACC = ? ?k e + ? ? k d (1 ? T ) ? Ve + Vd ? ? Ve + Vd ? The Fisher formula (1+i) = (1+r)(1+h) Purchasing power parity and interest rate parity s1 = S o x (1 + h c ) (1 + h b ) f0 = so x (1 + i c ) (1 + i b ) KAPLAN PUBLISHING Page 3 of 14 ACCA P4 Advanced Financial Management The Black-Scholes option pricing model c = PaN(d1) – PeN(d2)e? rt Where: The forex modified Black-Scholes option pricing model c = e? rt [F0N(d1) ? XN(d2)] Or d1 = In(Pa / Pe ) + (r + 0. 5s ) t s t p = e–rt [XN(? d2) ? F0N(? d1)] Where: d 2 = d1 ? s t d1 = and 1n (F0 / X) + s T / 2 s T 2 d 2 = d1 ? s T The put call parity relationship p = c ? Pa + Pee? rt Modified Internal Rate of Return ? PV ? n MIRR = ? R ? (1 + re) – 1 ? PV1 ? 1 Page 4 of 14 KAPLAN PUBLISHING Revision Mock Questions MATHEMATICAL TABLES Standard normal distribution table 0. 00 . 0000 . 0398 . 0793 . 1179 . 1554 . 1915 . 2257 . 2580 . 2881 . 3159 . 3413 . 3 643 . 3849 . 4032 . 4192 . 4332 . 4452 . 4554 . 4641 . 4713 . 4772 . 4821 . 4861 . 4893 . 4918 . 4938 . 4953 . 4965 . 4974 . 4981 . 4987 0. 01 . 0040 . 0438 . 0832 . 1217 . 1591 . 1950 . 2291 . 2611 . 910 . 3186 . 3438 . 3665 . 3869 . 4049 . 4207 . 4345 . 4463 . 4564 . 4649 . 4719 . 4778 . 4826 . 4865 . 4896 . 4920 . 4940 . 4955 . 4966 . 4975 . 4982 . 4987 0. 02 . 0080 . 0478 . 0871 . 1255 . 1628 . 1985 . 2324 . 2642 . 2939 . 3212 . 3461 . 3686 . 3888 . 4066 . 4222 . 4357 . 4474 . 4573 . 4656 . 4726 . 4783 . 4830 . 4868 . 4898 . 4922 . 4941 . 4956 . 4967 . 4976 . 4983 . 4987 0. 03 . 0120 . 0517 . 0910 .1293 . 1664 . 2019 . 2357 . 2673 . 2967 . 3238 . 3485 . 3708 . 3907 . 4082 . 4236 . 4370 . 4485 . 4582 . 4664 . 4732 . 4788 . 4834 . 4871 . 4901 . 4925 . 4943 . 4957 . 4968 . 4977 . 4983 . 4988 0. 04 . 0159 . 0557 . 0948 . 331 . 1700 . 2054 . 2389 . 2704 . 2995 . 3264 . 3508 . 3729 . 3925 . 4099 . 4251 . 4382 . 4495 . 4591 . 4671 . 4738 . 4793 . 4838 . 4875 . 4904 . 4927 . 4945 . 4959 . 4969 . 4977 . 4984 . 4988 0. 05 . 0199 . 0596 . 0987 . 1368 . 1736 . 2088 . 2422 . 2734 . 3023 . 3289 . 3531 . 3749 . 3944 . 4115 . 4265 . 4394 . 4505 . 4599 . 4678 . 4744 . 4798 . 4842 . 4878 . 4906 . 4929 . 4946 . 4960 . 4970 . 4978 . 4984 . 4989 0. 06 . 0239 . 0636 . 1026 . 1406 . 1772 . 2123 . 2454 . 2764 . 3051 . 3315 . 3554 . 3770 . 3962 . 4131 . 4279 . 4406 . 4515 . 4608 . 4686 . 4750 . 4803 . 4846 . 4881 . 4909 . 4931 . 4948 . 4961 . 4971 . 4979 . 4985 . 989 0. 07 . 0279 . 0675 . 1064 . 1443 . 1808 . 2157 . 2486 . 2794 . 3078 . 3340 . 3577 . 3790 . 3980 . 4147 . 4292 . 4418 . 4525 . 4616 . 4693 . 4756 . 4808 . 4850 . 4884 . 4911 . 4932 . 4949 . 4962 . 4972 . 4980 . 4985 . 4989 0. 08 . 0319 . 0714 . 1103 . 1480 . 1844 . 2190 . 2518 . 2823 . 3106 . 3365 . 3599 . 3810 . 3997 . 4162 . 4306 . 4430 . 4535 . 4625 . 4699 . 4762 . 4812 . 4854 . 4887 . 4913 . 4934 . 4951 . 4963 . 4973 . 4980 . 4986 . 4990 0. 09 . 0359 . 0753 . 1141 . 1517 . 1879 . 2224 . 2549 . 2852 . 3133 . 3389 . 3621 . 3830 . 4015 . 4177 . 4319 . 4441 . 4545 . 4633 . 4706 . 4767 . 4817 . 4857 . 4890 . 4916 . 4936 . 952 . 4964 . 4974 . 4981 . 4986 . 4990 0. 0 0. 1 0. 2 0. 3 0. 4 0. 5 0. 6 0. 7 0. 8 0. 9 1. 0 1. 1 1. 2 1. 3 1. 4 1. 5 1. 6 1. 7 1. 8 1. 9 2. 0 2. 1 2. 2 2. 3 2. 4 2. 5 2. 6 2. 7 2. 8 2. 9 3. 0 This table can be used to calculate N (d1), the cumulative normal distribution function needed for the Black-Scholes model of option pricing. If d1 > 0, add 0. 5 to the relevant number above. If d1 < 0, subtract the relevant number above from 0. 5. KAPLAN PUBLISHING Page 5 of 14 ACCA P4 Advanced Financial Management Present value table Present value of ? 1, i. e. (1 + r)-n where r = discount rate n = number of periods until paymentPeriods (n) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Periods (n) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 1% 0. 990 0. 980 0. 971 0. 961 0. 951 0. 942 0. 933 0. 923 0. 914 0. 905 0. 896 0. 887 0. 879 0. 870 0. 861 2% 0. 980 0. 961 0. 942 0. 924 0. 906 0. 888 0. 871 0. 853 0. 837 0. 820 0. 804 0. 788 0. 773 0. 758 0. 743 3% 0. 971 0. 943 0. 915 0. 888 0. 863 0. 837 0. 813 0. 789 0. 766 0. 744 0. 722 0. 701 0. 681 0. 661 0. 642 4% 0. 962 0. 925 0. 889 0. 855 0. 822 0. 790 0. 760 0. 731 0. 703 0. 676 0. 650 0. 625 0. 601 0. 577 0. 555 5% 0. 952 0. 907 0. 864 0. 823 0. 784 0. 746 0. 711 0. 677 0. 645 0. 614 0. 585 0. 557 0. 530 0. 505 0. 481 6% 0. 43 0. 890 0. 840 0. 792 0. 747 0. 705 0. 665 0. 627 0. 592 0. 558 0. 527 0. 497 0. 469 0. 442 0. 417 7% 0. 935 0. 873 0. 816 0. 763 0. 713 0. 666 0. 623 0. 582 0. 544 0. 508 0. 475 0. 444 0. 415 0. 388 0. 362 8% 0. 926 0. 857 0. 794 0. 735 0. 681 0. 630 0. 583 0. 540 0. 500 0. 463 0. 429 0. 397 0. 368 0. 340 0. 315 9% 0. 917 0. 842 0. 772 0. 708 0. 650 0. 596 0. 547 0. 502 0. 460 0. 422 0. 388 0. 356 0. 326 0. 299 0. 275 10% 0. 909 0. 826 0. 751 0. 683 0. 621 0. 564 0. 513 0. 467 0. 424 0. 386 0. 350 0. 319 0. 290 0. 263 0. 239 11% 0. 901 0. 812 0. 731 0. 659 0. 593 0. 535 0. 482 0. 434 0. 391 0. 352 0. 317 0. 286 0. 258 0. 232 0. 209 2% 0. 893 0. 797 0. 712 0. 636 0. 567 0. 507 0. 452 0. 404 0. 361 0. 322 0. 287 0. 257 0. 229 0. 205 0. 183 13% 0. 885 0. 783 0. 693 0. 613 0. 543 0. 480 0. 425 0. 376 0. 333 0. 295 0. 261 0. 231 0. 204 0. 181 0. 160 14% 0. 877 0. 769 0. 675 0. 592 0. 519 0. 456 0. 400 0. 351 0. 308 0. 270 0. 237 0. 208 0. 182 0. 160 0. 140 15% 0. 870 0. 756 0. 658 0. 572 0. 497 0. 432 0. 376 0. 327 0. 284 0. 247 0. 215 0. 187 0. 163 0. 141 0. 123 16% 0. 862 0. 743 0. 641 0. 552 0. 476 0. 410 0. 354 0. 305 0. 263 0. 227 0. 195 0. 168 0. 145 0. 125 0. 108 17% 0. 855 0. 731 0. 624 0. 534 0. 456 0. 390 0. 333 0. 285 0. 243 0. 208 0. 178 0. 152 0. 130 0. 11 0. 095 18% 0. 847 0. 718 0. 609 0. 516 0. 437 0. 370 0. 314 0. 266 0. 225 0. 191 0. 162 0. 137 0. 116 0. 099 0. 084 19% 0. 840 0. 706 0. 593 0. 499 0. 419 0. 352 0. 296 0. 249 0. 206 0. 176 0. 148 0. 124 0. 104 0. 088 0. 074 20% 0. 833 0. 694 0. 579 0. 482 0. 402 0. 335 0. 279 0. 233 0. 194 0. 162 0. 135 0. 112 0. 933 0. 078 0. 065 Page 6 of 14 KAPLAN PUBLISHING Revision Mock Questions Annuity table 1- (1+ r) -n r Present value of an annuity of ? 1, i. e. where r = interest rate n = number of periods Periods (n) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 1% 0. 990 1. 970 2. 941 3. 902 4. 853 5. 795 6. 728 7. 652 8. 566 9. 471 10. 37 11. 6 12. 13 13. 00 13. 87 2% 0. 980 1. 942 2. 884 3. 808 4. 713 5. 601 6. 472 7. 325 8. 162 8. 893 9. 787 10. 58 11. 35 12. 11 12. 85 3% 0. 971 1. 913 2. 829 3. 717 4. 580 5. 417 6. 230 7. 020 7. 786 8. 530 9. 253 9. 954 10. 63 11. 30 11. 94 4% 0. 962 1. 886 2. 775 3. 630 4. 452 5. 242 6. 002 6. 733 7. 435 8. 111 8. 760 9. 385 9. 986 10. 56 11. 12 5% 0. 952 1. 859 2. 723 3. 546 4. 329 5. 076 5. 786 6. 463 7. 108 7. 722 8. 306 8. 863 9. 394 9. 899 10. 38 6% 0. 943 1. 833 2. 673 3. 465 4. 212 4. 917 5. 582 6. 210 6. 802 7. 360 7. 887 8. 384 8. 853 9. 295 9. 712 7% 0. 935 1. 808 2. 624 3. 387 4. 100 4. 767 5. 389 5. 971 6. 515 7. 024 7. 499 7. 43 8. 358 8. 745 9. 108 8% 0. 926 . 178 3 2. 577 3. 312 3. 993 4. 623 5. 206 5. 747 6. 247 6. 710 7. 139 7. 536 7. 904 8. 244 8. 559 9% 0. 917 1. 759 2. 531 3. 240 3. 890 4. 486 5. 033 5. 535 5. 995 6. 418 6. 805 7. 161 7. 487 7. 786 8. 061 10% 0. 909 1. 736 2. 487 3. 170 3. 791 4. 355 4. 868 5. 335 5. 759 6. 145 6. 495 6. 814 7. 103 7. 367 7. 606 Periods (n) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 11% 0. 901 1. 713 2. 444 3. 102 3. 696 4. 231 4. 712 5. 146 5. 537 5. 889 6. 207 6. 492 6. 750 6. 982 7. 191 12% 0. 893 1. 690 2. 402 3. 037 3. 605 4. 111 4. 564 4. 968 5. 328 5. 650 5. 938 6. 194 6. 424 6. 628 6. 811 13% 0. 885 1. 668 2. 361 2. 74 3. 517 3. 998 4. 423 4. 799 5. 132 5. 426 5. 687 5. 918 6. 122 6. 302 6. 462 14% 0. 877 1. 647 2. 322 2. 914 3. 433 3. 889 4. 288 4. 639 4. 946 5. 216 5. 453 5. 660 5. 842 6. 002 6. 142 15% 0. 870 1. 626 2. 283 2. 855 3. 352 3. 784 4. 160 4. 487 4. 772 5. 019 5. 234 5. 421 5. 583 5. 724 5. 847 16% 0. 862 1. 605 2. 246 2. 798 3. 274 3. 685 4. 039 4. 344 4. 607 4. 833 5. 029 5. 197 5. 342 5. 468 5. 575 17% 0. 855 1. 585 2. 210 2. 743 3. 199 3. 589 3. 922 4. 207 4. 451 4. 659 4. 836 4. 988 5. 118 5. 229 5. 324 18% 0. 847 1. 566 2. 174 2. 690 3. 127 3. 496 3. 812 4. 078 4. 303 4. 494 4. 656 4. 793 4. 910 5. 008 5. 092 19% 0. 840 1. 47 2. 140 2. 639 3. 058 3. 410 3. 706 3. 954 4. 163 4. 339 4. 586 4. 611 4. 715 4. 802 4. 876 20% 0. 833 1. 528 2. 106 2. 589 2. 991 3. 326 3. 605 3. 837 4. 031 4. 192 4. 327 4. 439 4. 533 4. 611 4. 675 KAPLAN PUBLISHING Page 7 of 14 ACCA P4 Advanced Financial Management SECTION A TWO COMPULSORY QUESTIONS QUESTION 1 (a) Hunt plc is a medium sized UK company that trades with companies in several European countries. Trade deals over the next three months are shown below. Assume that it is now 20 April. Two months’ time Receipts Payments ? â‚ ¬393,265 ? ? ? ? Three months’ time Receipts Payments â‚ ¬491,011 â‚ ¬60,505 â‚ ¬890,217 â‚ ¬1,997,651 Kr 8. m ? France Germany Denmark Foreign exchange rates Spot Two months f orward Three months forward Dkroner (Kr)/? 10. 68 – 10. 71 10. 74 – 10. 77 10. 78 – 10. 83 Euro (â‚ ¬)/? 1. 439 – 1. 465 1. 433 – 1. 459 1. 431 – 1. 456 Annual interest rates (valid for two months or three months) Borrowing (%) United Kingdom 7. 50 France 5. 75 Germany 5. 75 Denmark 8. 00 Investing (%) 5. 50 3. 50 3. 50 6. 00 Futures market rates Three month Euro contracts (125,000 Euro contract size). Contracts are for buying or selling Euros. Futures prices are in ? per Euro. Current 20 April June September December 0. 6964 0. 6983 0. 013 Page 8 of 14 KAPLAN PUBLISHING Revision Mock Questions Required: (i) Using the forward market, money market and currency futures market as appropriate, devise a foreign exchange hedging strategy that is expected to maximise the cash flows of Hunt plc at the end of the three month period. (Note: Denmark is not a member of the Euro block. ) Transaction costs and margin requirements may be ignored for thi s part of the question. The basis may be assumed to reduce to zero in a linear manner over the period to expiry of the futures contracts. Futures contracts may be assumed to mature at the month end. 15 marks) (ii) Successive daily prices on the futures market for a June contract which Hunt plc has sold are: Selling price Day 1 Day 2 Day 3 0. 6916 0. 6930 0. 6944 0. 6940 Initial margins are ? 1,000 per contract. Variation margin is 100% of the initial margin. Spot exchange rates may be assumed to not change significantly during these three days. For each of the three days, show the effect on your cash flow of the price changes of the contract. (4 marks) (b) Discuss the advantages and disadvantages of forward contracts and currency futures for hedging against foreign exchange risk. 6 marks) (Total: 25 marks) KAPLAN PUBLISHING Page 9 of 14 ACCA P4 Advanced Financial Management QUESTION 2 Brookday plc is considering whether to establish a subsidiary in the USA. The subsidiary would cost a total of $20 million, including $4 million for working capital. A suitable existing factory and machinery have been located and production could commence quickly. A payment of $19 million would be required immediately, with the remainder required at the end of year 1. Production and sales are forecast at 50,000 units in the first year and 100,000 units per year thereafter.The unit sales price, unit variable cost and total fixed costs in year 1 are expected to be $100, $40 and $1 million respectively. After year 1 prices and costs are expected to rise at the same rate as the previous year’s level of inflation in the USA; this is forecast to be 5% per year for the next five years. In addition, a fixed royalty of ? 5 per unit will be payable to the parent company, payment to be made at the end of each year. Brookday has a four year planning horizon and estimates that the realisable value of the fixed assets in four years’ time will be $20 million.It is the company†™s policy to remit the maximum funds possible to the parent company at the end of each year. Assume that there are no legal complications to prevent this. Brookday currently exports to the USA yielding an after-tax net cash flow of ? 100,000. No production will be exported to the USA if the subsidiary is established. It is expected that new export markets of a similar worth in Southern Europe could replace exports to the USA. United Kingdom production is at full capacity and there are no plans for further expansion in capacity. Tax on the company’s profits is at a rate of 50% in both countries, payable one year in arrears.A double taxation treaty exists between the UK and USA and no double taxation is expected to arise. No withholding tax is levied on royalties payable from the USA to the UK. Tax allowable depreciation is at a rate of 25% on a straight line basis on all fixed assets. Brookday believes that the appropriate beta for this investment is 1. 2. The market rate of return is 12%, and the risk-free rate is 7%. The current spot exchange rate is US $1. 300/? 1, and the pound is expected to fall in value by approximately 5% per year relative to the US dollar.Required: (a) Evaluate the proposed investment from the viewpoint of Brookday plc. State clearly any assumptions that you make. (20 marks) (b) What further information and analysis might be useful in the evaluation of this project? (10 marks) Briefly discuss ethical issues that might need to be considered as part of a multinational company’s investment decision process (5 marks) (Total: 35 marks) (c) Page 10 of 14 KAPLAN PUBLISHING Revision Mock Questions SECTION B TWO QUESTIONS ONLY TO BE ATTEMPTED QUESTION 3 The following data relates to a large company operating in the electronics industry. 0X3 After tax earnings (? million) Dividend per share (pence) Number of ordinary shares (million) Average share price (pence) Net capital investment (? million) Annual increase in inflation (%) 1 30 9. 75 508 740 210 4 20X4 195 11. 0 600 875 270 4 20X5 255 12. 75 650 690 340 3 20X6 295 14. 0 695 20X7 472 15. 5 930 820 1,012 410 520 3 3 A major institutional shareholder has criticised the level of dividend payment of the company suggesting that it should be substantially increased. Required: (a) Briefly discuss the factors that are likely to influence the company's dividend policy. 6 marks) Discuss whether or not the institutional shareholder's criticism is likely to be valid. (6 marks) Hiome plc has experienced a period of above average growth for its industry, but is now growing at a normal rate of about 10% per annum. The company’s directors are reviewing the current dividend policy. One director has suggested that, as the company no longer needs as much internally generated funds to finance new investment, a higher proportion of earnings should be paid out as dividends in order to benefit the company’s shareholders.Another director has read that two eminent economists, Miller and Modigliani, have stated that the pattern of dividend payouts is irrelevant, and therefore shareholders will experience no gain from a higher level of dividends. Discuss whether or not an increase in dividends is likely to benefit the shareholders of Hiome plc. (8 marks) (Total: 20 marks) (b) (c) KAPLAN PUBLISHING Page 11 of 14 ACCA P4 Advanced Financial Management QUESTION 4 (a) One of the most important elements of any decision is the specification of goals or objectives which the decision maker seeks to achieve.The literature on capital budgeting, or investment appraisal, generally assumes the goal of a company is the maximisation of shareholder wealth. Required: Discuss the rationale for this assumption. Include in your discussion an explanation of alternative goals available to companies. (12 marks) (b) XYZ plc is a medium-sized company operating in the chemical industry. It is a profitable business, currently producing at below maximum capacity. It has on e large factory located on the outskirts of a small industrial town. It is the region’s main employer. The company is evaluating a project which has substantial environmental implications.Required: Discuss the inclusion of environmental costs and benefits into the investment appraisal process, and explain how this might be done. (8 marks) (Total: 20 marks) QUESTION 5 Island Energy Ltd is a small private company on the Island of Senyeh ? a small island whose company law and accountancy practices are based on those of the UK. The company is the monopoly provider of all domestic fuels (electricity, gas and heating oil). The company imports oils and gas and generates and distributes its own electricity. The company currently has 20 staff working on engineering and electrical work at varying level of skills and three clerk/typists.The company at present does not have any management staff: the previous Managing Director (an engineer) resigned at the end of 2006 and has not been rep laced; the Chairman (a retired engineer) has taken over the dayto-day management. The remaining board members are also all retired and comprise two lawyers, a teacher, a politician, an engineer and an operations director for a shipping company. Their role is simply to rubber-stamp the Chairman’s decisions – none of them takes an active role in the company and there have been board meetings where it has been difficult to obtain a quorum.Recently the island’s press has started to express concern about the way the company is being run – partly in reaction to public dismay at the resignation of the MD who was felt to be more approachable than the Chairman, and partly because the company is seen to be spending vast sums of money on capital equipment and worries have started to emerge about how this will impact on the price of fuel. Fuel prices on Senyeh are currently 20% above those on other islands in the region. Page 12 of 14 KAPLAN PUBLISHING Revision Mock QuestionsPengers, a member of the government of Senyeh has recently read an article about corporate failure and thinks that Island Energy Ltd may fit some of the criteria; Lakes, another government member, disagrees – arguing that the Chairman has been in place for several years ? and has asked you, a newly qualified ACCA accountant, to apply the model to show that there is no reason for concern. N. B. Accounting data for the company is presented in the Appendix to this question. You find that the model that Pengers read about was Altman’s Z score model applied to private manufacturing companies and that: Z score = 0. 17X1+ 0. 847X2 + 3. 107X3 + 0. 420X4 + 0. 998X5 where: X1 = working capital/total assets X2 = retained earnings/total assets X3 = earnings before interest and tax/total assets X4 = market value of equity/total liabilities X5 = sales/total assets Further research shows that companies with a score less than 1. 23 have a 95% chance of bankruptcy, those with a score greater than 2. 90 are unlikely to become bankrupt and those in between the two figures require additional scrutiny. (a) Calculate the Z score for Island Energy Ltd and comment upon your findings. 12 marks) (b) List any further concerns you may have about the company and any concerns you may have about the use of the model. (8 marks) (Total: 20 marks) Appendix: Island Energy Ltd Income Statement for the year ended 31 December 20X7 TURNOVER Less: Cost of sales GROSS PROFIT Less: Administrative costs OPERATING PROFIT/(LOSS) Bank charges and interest payable PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION Tax on profit on ordinary activities PROFIT/(LOSS) FOR THE FINANCIAL YEAR NET DIVIDEND PAID (NON-EQUITY) TRANSFER TO/(FROM) RESERVES ? 2,374,087 ? 1,923,872 450,215 ? 381,592 68,623 ? 3,999 64,624 ? 8,753 55,871 ? ,120 54,751 KAPLAN PUBLISHING Page 13 of 14 ACCA P4 Advanced Financial Management Island Energy Ltd Statement of Financial Position as at 31 December 20X7 ? NON CURREN T ASSETS Tangible assets CURRENT ASSETS Inventory Receivables Cash at bank and in hand ? 1,622,009 213,979 275,522 487,953 ––––––––– 977,454 ––––––––– TOTAL ASSETS 2,599,463 ––––––––– CAPITAL AND LIABILITIES CURRENT LIABILITIES – TRADE PAYABLES LONG-TERM LOAN CAPITAL AND RESERVES CALLED-UP SHARE CAPITAL RESERVES General reserve Profit and loss reserve 586,117 400,000 64,405 1,129,584 419,357 ––––––––– 1,548,941 ––––––––– TOTAL CAPITAL AND LIABILITIES 2,599,463 –––––––– Page 14 of 14 KAPLAN PUBLISHING ACCA Paper P4 Advanced Financial Management June 2010 Revision Mock – Answers To gain maximum benefit, do not refer to these answers until you have completed the revision mock questions and submitted them for marking. KAPLAN PUBLISHING Page 1 of 17 ACCA P4 Advanced Financial Management  © Kaplan Financial Limited, 2010 All rights reserved. No part of this examination may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system, without prior permission from Kaplan Publishing.The text in this material and any others made available by any Kaplan Group company does not amount to advice on a particular matter and should not be taken as such. No reliance should be placed on the content as the basis for any investment or other decision or in connection with any advice given to third parties. Please consult your appropriate professional adviser as necessary. Kaplan Publishing Limited and all other Kaplan group companies expressly disclaim all liability to any person in respect of any losses or other claims, whether direct, indirect, incidental, consequential or otherwise arising in relation to the use of such materials.Page 2 of 17 KAPLAN PUBLISHING Revision Mock Answers ANSWER 1 (a) (i) Any hedging should be based upon expected net receipts and payments. Net receipts/payments Receipts Two months Three months Three months Forward market hedge 393,265 1. 433 676,928 1. 431 Kr8. 6m 10. 83 Payments â‚ ¬393,265 â‚ ¬676,928 Kr 8. 6m Two months = (? 274,435) Three months = (? 473,045) Three months = ?794,090 Money market hedge (i) Now Payment Euro deposit rate (1. 005833) 2 months (â‚ ¬393,265) Buy Deposit â‚ ¬390,984 (â‚ ¬393,265) 0 Buy at spot (Immediate payment in ? s) 1. 439 (? 271,705) (1. 0125) UK borrowing rate (? 275,101) Forward market The forward market is cheaper.Payment (? 274,435) KAPLAN PUBLISHING Page 3 of 17 ACCA P4 Advanced Financial Management Now Payment Euro deposit rate (1. 00875) 3 months (â‚ ¬676,928) Buy Deposit â‚ ¬671 ,056 (â‚ ¬676,928) 0 Buy at spot (Immediate payment in ? s) 1. 439 (? 466,335) (1. 01875) UK borrowing rate (? 475,079) Forward market The forward market is cheaper. Now Receipt Danish borrowing rate (1. 02) Payment (? 473,045) 3 months Kr8,600,000 Sell Loan Kr8,431,373 (Kr8,600,000) 0 Sell at spot (Immediate receipt in ? s) 10. 71 ? 787,243 (1. 01375) UK deposit rate ? 798,068 Forward market The money market offers the better alternative in this case.Futures hedge – The currency of the contract is Euros Payment of â‚ ¬393,265 1 Set up the hedge: Payment in Euros Buying Euros Buy E contracts Receipt ? 794,090 Number of contracts: = â‚ ¬393,265 ? â‚ ¬125,000 = 3. 15 contracts say 3 contracts Buy 3 â‚ ¬ June future contracts at a current price of ? 0. 6964 Page 4 of 17 KAPLAN PUBLISHING Revision Mock Answers 2 The play off: Now 20 April Spot market ? /Euro (1/1. 439) Futures market ? /Euro ? 0. 6964 Basis 0. 0015 ? 0. 6980 (BAL) 0. 0002 10 days of 71 left BASIS N IL Conversion date 20 June Expiry date 30/6 ?0. 6949 Fwd rate 1/1. 433, i. e ? 0. 6978 3 Profit on the futures: Profit on futures: ? 0. 6980-0. 6964) ? (125,000 ? 3) = ? 600. In sterling, therefore no need to convert. 4 The cash flows: Actual payment: Profit on futures Net payment â‚ ¬393,265 ? 0. 6978 = (? 274,420) ? 600 –––––––– (? 273,820) –––––––– In this case, the futures alternative is cheaper than the forward market. Payment of â‚ ¬676,928 1 Set up the hedge: Payment in Euros Buying Euros Buy E contracts No of contracts = â‚ ¬676,928 ? â‚ ¬125,000 = 5. 42 contracts say 5 contracts Buy 5 E September future contracts at a current price of ? 0. 6983 KAPLAN PUBLISHING Page 5 of 17 ACCA P4 Advanced Financial Management 2 The play off: Now 20 April Spot market ? /Euro (1/1. 39) Futures market ? /Euro ? 0. 6983 Basis 0. 0034 ? 0. 7003 (BAL) 0. 0015 BASIS NIL 72 days of 163 left Conversion date 20 July Expiry date 30/9 ?0. 6949 Fwd rate 1/1. 431 i. e. ?0. 6988 3 Profit on the futures: Profit on futures: ? (0. 7003-0. 6983) ? (125,000 x 5) = ? 1,250. In sterling, therefore no need to convert. 4 The cash flows: Actual payment: Profit on futures Net payment â‚ ¬676,928 ? 0. 6988 = (? 473,037) ? 1,250 –––––––– (? 471,787) –––––––– Again, the futures are cheaper than the forward market. In conclusion, the money market should be used for the Danish Kroner hedge and the futures market for the Euro hedges.Although in reality the outcome of futures hedges is not known with certainty, as the basis will probably not reduce to zero in a linear manner before the expiry dates, i. e. we do not know what the closing futures price will be. (ii) Day one – a movement from 0. 6916 to 0. 6930 would produce a loss of 125,000 (0. 0014) or ? 1 75. You would need to provide an extra ? 175 to maintain the margin at ? 1,000, otherwise the contract will be closed out by the Clearing House. Day two – the price change is the same and a further ? 175 would need to be provided to maintain the required margin. Day three – a profit is made of 125,000 (0. 944 – 0. 6940) or ? 50, which may be taken in cash. Page 6 of 17 KAPLAN PUBLISHING Revision Mock Answers (b) Forward contracts Advantages (i) Forward contracts on the Over The Counter (OTC) market are tailored to the needs of the parties concerned and are flexible in terms of size and maturity. (ii) No payments are required until the contracts are settled. (iii) Contracts are available in a very wide range of currencies. Disadvantages (i) Forward contracts have two prices, a buying and a selling price, which means that companies must bear the cost of the spread between these prices. ii) Prices can vary according to the size of deal and the customer. (iii) Long maturity contracts are rare (normally six months) and some currencies do not have a forward market. Currency futures Advantages (i) There is a single specified price which is transparent. (ii) As the market’s Clearing House is the formal counter party to every transaction. This effectively reduces counter party default risk for those dealing in futures. Disadvantages (i) Futures contracts are not very flexible. Contracts are only of a specified size and maturity and are only available for a very limited number of currencies. ii) The cost of operating the margin system. An initial margin (deposit) is required and further variation margins are necessary on a daily basis. KAPLAN PUBLISHING Page 7 of 17 ACCA P4 Advanced Financial Management ACCA marking scheme (a) (i) Use of net receipts and payments Forward market Money market Futures market Conclusions Maximum (ii) Understanding of variation margin Day 1 and 2 loss Day 3 gain Maximum Marks 1 2 4 6 2 ___ 15 ___ 1 2 1 ___ 4 ___ ( b) Advantages and disadvantages of forward contracts Advantages and disadvantages of futures 3-4 3-4 Max 6 Total ___ 25 ___ Page 8 of 17 KAPLAN PUBLISHING Revision Mock Answers ANSWER 2 a) Brookday’s stated policy is to remit the maximum funds possible to the parent company. The net present value of relevant cash flows to the parent company will be the appropriate decision criterion, and should lead to maximisation of parent shareholder wealth. The dollar profit and relevant cash flow from the subsidiary must be determined first. Projected earnings data of the US subsidiary Year 1 $000 5,000 2,000 1,000 309 4,000 7,309 (2,309) 0 (2,309 Year 2 $000 10,500 4,200 1,050 586 4,000 9,836 664 0 664 Year 3 $000 11,025 4,410 1,102 557 4,000 10,069 956 0 956 Year 4 $000 11,580 4,630 1,158 529 4,000 10,317 1,263 0 1,263 Year 5 $000Sales (Note 1) Variable costs Fixed costs Royalty (Note 2) Depreciation Taxable profit US tax payable (Note 3) Profit after tax (287) (287) Projected cash flo w data of the US subsidiary Year 0 $000 Profit after tax Depreciation Initial investment Additional capital Realisable value of fixed assets (Note 4) Tax on realisable value Working capital available Cash flows available to parent Exchange rate $/? (W2) Year 1 $000 (2,309) 4,000 (19,000) (1,000) Year 2 $000 664 4,000 Year 3 $000 956 4,000 Year 4 $000 1,263 4,000 Year 5 $000 (287) 20,000 (10,000) 4,000 –––––– ––––––– ––––––– ––––––– ––––––– ––––––– (19,000) 1. 300 691 1. 235 4,664 1. 173 4,956 29,263 (10,287) 1. 115 1. 059 1. 006 KAPLAN PUBLISHING Page 9 of 17 ACCA P4 Advanced Financial Management Projected cash flow data for the parent company Year 0 Year 1 Year 2 ? 000 ? 000 ? 000 Available from US s ubsidiary (14,615) 559 3,976 Royalty payment 250 500 UK tax on royalty (Note 5) (125) Net cash flow Discount factors @ 13% (Note 6) Present values (14,615) 1 (14,615) 809 0. 885 716 4,351 0. 783 3,407 Year 3 ? 000 4,445 500 (250) 4,695 0. 693 3,254 Year 4 ? 000 27,633 500 (250) 27,883 0. 13 17,092 Year 5 ? 000 (10,226) (250) (10,476) 0. 543 (5,688) Net present value = ? 4,166,000 The positive NPV means that the project is acceptable. The loss of exports to the USA if the project is undertaken is not a relevant cash flow. Notes: 1 Sales price increases by 5% per year Year 1 Year 2 Year 3 Year 4 Price 100. 00 105. 00 110. 25 115. 80 Units (000) 50 100 100 100 Sales revenue (000) 5,000 10,500 11,025 11,580 Similar calculations are necessary for variable costs, and price adjustments for fixed costs. 2 The royalty is payable in ? s and will depend upon the $/? exchange rate.The ? is expected to fall in value by 5% per year relative to the $. Year 1 Expected exchange rate $/? Royalty (? 0 00) Royalty ($000) 3 4 1. 235 250 309 Year 2 1. 173 500 586 Year 3 1. 115 500 557 Year 4 1. 059 500 529 Year 5 1. 006 5 Losses are assumed to be carried forward and allowed against future profits for taxation purposes. Although the subsidiary will exist for more than four years, the company’s planning horizon is only four years. A value must be placed upon the subsidiary at this time. The only information available is an estimate of realisable value of fixed assets.Tax on this realisable value will be payable as the assets are fully depreciated. Potential working capital available must also be considered. There will be no double taxation on cash flows from the USA. However, the royalty has not been subject to US tax, and will be liable to UK taxation. Page 10 of 17 KAPLAN PUBLISHING Revision Mock Answers 6 Using the capital asset pricing model to determine the discount rate: R project = R project = = RF + (RM ? RF)? project 7% + (12% ? 7%) 1. 2 13% (b) Further information and analysis might include: (i) How accurate are the cash flow forecasts? How have they been established? ii) Why has a four-year planning horizon been chosen? The valuation of the fixed assets at year 4 is highly significant to the NPV solution. How has this valuation been established? Is this valuation based upon future earnings as a going concern? It would be more desirable to evaluate the project over the whole of its projected life. (iii) Risk is taken into account by using a CAPM derived discount rate. How has this rate been derived for a situation involving two countries? Does this fully reflect the risk of the project? Is the use of CAPM appropriate (as it is a single period model)?Other, theoretically weaker measures of risk might be useful as an aid to decision making, e. g. sensitivity analysis of the key variables or simulation. (iv) Cash flow is usually assumed to occur at the end of each year. Greater accuracy would result if consideration were given to when during the ye ar cash flow arises and these cash flows discounted at the appropriate rate. (v) Political and economic factors. How stable is the US government policy? Will a change in government lead to changes in taxation policy, exchange controls, restrictions on the remittance of funds, attitudes toward foreign investment? vi) Are there any intangible benefits of establishing a manufacturing plant in the USA, e. g. making the American public more aware of Brookday’s product? (vii) Real options analysis. The Black-Scholes option valuation model could be used to place a value on any real options. Thus enabling the calculation of a true NPV of project with options: True NPV = Short term NPV + NPV of all real options Multinational companies may engage in activities which, whilst not illegal, are questionable ethically, and may have detrimental long-term effects on the company’s reputation.Ethical considerations include: (i) (ii) (iii) (iv) (v) (vi) Would the investment cause pollutio n or other environmental damage in the country? Does the investment involve experiments on animals, genetic modifications etc? Should the investment be undertaken if the country has a poor record on human rights? If local officials ask for ‘inducements’ to facilitate the investment process, should these be paid? Would the investment in any way assist trading in drugs or arms? Are wages to be paid below subsistence level? Are working conditions of an acceptable standard? c) KAPLAN PUBLISHING Page 11 of 17 ACCA P4 Advanced Financial Management ACCA marking scheme (a) Exchange rates Sales Variable costs Fixed costs Royalty Depreciation US tax payable Tax on realisable value Working capital Discount rate Loss on exports – not relevant UK tax on royalties NPV and conclusion Reward technique even if calculation errors exist Maximum (b) (c) 1 – 2 marks for each good point 1 – 2 marks for each good point Total Marks 2 2 1 1 2 1 2 1 1 2 2 2 1 ___ 20 ___ 10 5 ___ 35 ___ Page 12 of 17 KAPLAN PUBLISHING Revision Mock Answers SECTION B ANSWER 3 a) There is considerable debate as to whether dividend policy can influence corporate value. Much of the debate concerns the question of whether it is the dividend that affects share value, or the information implied by the payment of the dividend. Dividends may provide, in the cheapest and most efficient manner, unambiguous signals about a company's future prospects and management performance. Managers have an incentive to send truthful signals via dividends, as any changes in dividends that are not likely to be accompanied by changes in cash flows will not fool a market that is at least semi-strong form efficient.Dividends therefore may be a valuable communication medium. There are a number of possible practical influences on dividend policy including: (i) (ii) (iii) (iv) Dividends are to be discouraged as they may lead to issue costs associated with raising additional external finance. Corporate growth. The faster a company is growing the lower the dividend payment is likely to be. Liquidity. Cash is needed to pay dividends. The level of corporate liquidity might influence dividend payouts. The volatility of corporate cash flows.Companies may be reluctant to increase dividends unless they believe that future cash flows will be large enough to sustain the increased dividend payment. Legal restrictions, for example, government constraints, limitations on payments from reserves, and covenants on debt that restrict dividends. The rate of inflation. Many shareholders like dividends to increase by at least as much as inflation. The desires and tax position of the shareholder clientele. However, most companies have a broad spread of shareholders with different needs and tax positions. (v) (vi) (vii) b) Statistical data: Earnings per share (pence) Retained earnings (? m) Payout ratio (%) Dividends (? m) Real growth in dividend per share (%) 20X3 25. 6 80 38. 1 49. 5 20X4 32. 5 129 33. 8 66. 0 8. 48 20X5 39. 2 172 32. 5 82. 9 12. 53 20X6 42. 4 198 33. 0 97. 3 6. 60 20X7 50. 8 328 30. 5 144. 1 7. 49 The company's dividend per share has increased, in real terms, by between 6. 6% and 12. 53% per year during the last five years. Although no comparative industry data is available, this appears to be a good performance. The payout ratio has reduced from 38% in 20X3 to 30. % in 20X7, which may be why the institutional shareholder has KAPLAN PUBLISHING Page 13 of 17 ACCA P4 Advanced Financial Management made the criticism. However, there is little point in the company paying out large dividends if it has positive NPV investments which can be financed partially by dividend retention. Although there is by no means a perfect correlation between NPV and earnings per share, the fact that earnings per share have consistently increased over the period suggests that the company's investments are financially viable.The company has consistently had high net capital expenditure relative to earnings, and in such circumstances it is not unusual for dividend payments to be relatively low. The company's share price has not increased by as much as earnings per share but, without information on stock market trends and the relative risk of the company, it is not clear whether or not the company's share price is under performing. Unless the institutional shareholder could invest any dividends received to earn a higher yield (adjusted for any differences in risk) there is little evidence to support the validity of the criticism. c) The argument by Miller and Modigliani (MM) that dividend policy is irrelevant to the value of company was formulated under very restrictive perfect market conditions. If such conditions existed then shareholders would not value an increase in dividend payments. However, there are several real world factors that are likely to influence the preference of shareholders towards dividends or retentions (and hence expected capital gains). These include: †¢ Taxation.In some countries dividends and capital gains are subject to different marginal rates of taxation usually with capital gains being subject to a lower level of taxation than dividends. Brokerage fees. MM ignore brokerage fees. However, if shareholders have a preference for some current income and are paid no or low dividends, their wealth will be reduced if they have to sell some of their shares and incur brokerage fees in order to create current income.If a company needs to finance more new investment it is usually cheaper to fund investment through retained earnings as most forms of external finance involve issue costs. Information asymmetry may exist between shareholders and directors. If the market is not strong form efficient, shareholders may have less complete knowledge of the likely future prospects of the company than directors, which may influence the shareholders’ desire for dividends or capital gains. †¢ †¢ †¢ The implicati ons of an increase in dividends need to be considered by the company.Dividends are often regarded as an unbiased signal of a company’s future prospects, an increase in dividends signalling higher expected earnings. The company should be careful to inform its shareholders of the reason for any increase in dividends. A further factor is the use that the company can make of funds. If the company has a number of possible positive NPV investments, then shareholders will normally favour undertaking these investments (at least on financial grounds), as they will lead to an increase in shareholder wealth.If, however, the company has relatively few projects and can only invest surplus cash at an expected zero NPV, the arguments for retentions is weakened. For strategic and operational reasons most companies keep some funds in the form of cash or near cash, for transactional and precautionary motives and to be in the position to take advantage of unexpected opportunities that may arise . The need for cash for such purposes may influence the level of dividend payout. Page 14 of 17 KAPLAN PUBLISHING Revision Mock Answers ACCA marking scheme a) (b) (c) One mark for each valid point Two marks for calculations. 4 marks for detailed analysis/explanation Two marks for each well-explained point Total Marks Max 6 Max 6 Max 8 ___ 20 ___ ANSWER 4 (a) It is generally assumed that the major objective of decision makers in a company is to maximise the net present value of future cash flows when discounted at a rate which reflects shareholders’ required rates of return. The rationale for this assumption is that of all the stakeholders in a company the demands of the equity investors are paramount.Equity investors are dominant because they own the assets of the company and employ directors and managers (the decision makers) to make the best use of those assets. Ultimately, if the directors do not produce an, at least, adequate return for shareholders they will be out of a job. It is accepted that often alternative goals govern decision making within a company. In some cultures and political environments, the assumed dominance of shareholder interests is questioned. Why shouldn’t the providers of labour, rather than capital, have their rewards maximised?It is important to remember that it is senior management that actually make the decisions within companies and they will be looking for personal reward. They are likely to be interested in the level of their own salaries and pensions and security. It is often claimed that management seek maximum revenue rather than maximum profit, or, knowing that they may only work for a company for a limited time period, are more interested in short-term performance rather than the long-term growth of shareholders’ wealth. Finally there are other stakeholders in the company to be considered.Most companies will try to ‘balance’ the maximising of shareholder wealth with the motivation of work ers and management, the delighting of customers and a good public image. In achieving this balance shareholder wealth will not always be the major objective. (b) In the modern world companies cannot ignore the environmental implications of their actions; to do so may destroy the company because of the effect on their reputation in the eyes of customers or suppliers, or the effect of the imposition of fines and penalties if they break legislation or regulations designed to protect the environment.Including environmental costs and benefits in investment appraisal will probably require the advice of an environmental specialist who can calculate for the company such items as: (i) (ii) the costs of machinery or changes to processes to avoid environmental damage the likely costs of penalties, fines or claims for compensation if environmental damage occurs KAPLAN PUBLISHING Page 15 of 17 ACCA P4 Advanced Financial Management (iii) (iv) he likely effect on future revenues from any adverse p ublicity that would be likely to arise from environmental damage the likely effect on future revenues from positive publicity from going beyond statutory requirements to protect the environment. Once costed, these costs and revenues could be included in the net present value calculations undertaken by XYZ plc in its investment appraisal of the chemical project. A more extreme approach would be to place a subjective valuation on the cost of reinstating the environment to its original condition and treating that as a nominal outflow.ACCA marking scheme (a) (b) One mark for each valid point throughout One mark for each valid point throughout Total Marks Max 12 Max 8 ___ 20 ___ ANSWER 5 (a) X1 = working capital/total assets X2 = retained earnings/total assets X3 = earnings before interest and tax/total assets X4 = book value of equity/total liabilities X5 = sales/total assets And the Z score = 0. 717X1+ 0. 847X2 + 3. 107X3 + 0. 420X4 + 0. 998X5 X1 = 391,337/2,599,463 X2 = 1,548,941/2,59 9,463 X3 = 68,623/2,599,463 X4 = 64,405/986,117 X5 = 2,374,087/2,599,463 = 0. 505 = 0. 5959 = 0. 0264 = 0. 0653 = 0. 9133 Z = 0. 11 + 0. 50 + 0. 08 + 0. 03 + 0. 91 = 1. 63 Whilst Island Energy Ltd is not in the immediate danger zone, its score is in the ‘grey area’ and further analysis is recommended. (b) Further concerns about the company: †¢ †¢ †¢ †¢ Page 16 of 17 The Chairman is also acting as MD so there is no counter-balance to him and, as such, no ‘watchdog’ over his activities. The remainder of the Board does not participate in the running of the company. There appears to be a weak finance function.There is a lack of management depth – there being no middle management. KAPLAN PUBLISHING Revision Mock Answers Concerns about the model: †¢ General limitations about the Z score (and other prediction models). These accounting based models only focus on the financial aspects of a company’s performance. This is only a snapshot of the company – maybe the position is improving. Further analysis is required to fully determine what the situation is with Island Energy Ltd. This may only be a predicator for the short term; we do not know what the company’s future plans are.ACCA marking scheme (a) (b) Calculation of each x or z score = 2 marks , interpretation 2 marks 1 mark for each valid point Total Marks Max 12 Max 8 ___ 20 ___ †¢ †¢ †¢ MARKING SCHEME This marking scheme is given as a guide to markers in the context of the suggested answers. Scope is given to markers to award marks for alternative approaches to a question, including relevant comment, and where well reasoned conclusions are provided. This is particularly the case for essay based questions where there will often be more than one definitive solution. KAPLAN PUBLISHING Page 17 of 17