Capital Budgeting Methods for Corporate Project Selection

Capital Budgeting Methods for Corporate Project Selection In a 2001 Graham and Harvey survey of 392 chief financial officers (CFOs) asked â€Å"how frequently they used different capital budgeting methods? † Approximately 75% of the CFOs replied that they use net present value (NPV) or Internal Rate of Return (IRR) always or almost always (Smart, Megginson & Gitman, 2004, pg. 251). Projects are viewed as capital investments in the corporate world, and as such, are evaluated closely for their possible financial impacts on the â€Å"bottom line† due to their higher risk of failure.Capital investments are those that are considered long-term investments such as manufacturing plants, R&D, equipment, marketing campaign, etc. , and capital budgeting is â€Å"the process of identifying which of these investment projects a firm should undertake† (Smart, Megginson & Gitman, 2004, pg. 227). According to Smart, Megginson & Gitman, there are three steps in the capital budgeti ng process: * Identifying potential investments Analyzing the set of investment opportunities, identifying those that will create shareholder value, and perhaps prioritizing them * Implementing and Monitoring the investment projects selected This paper will focus on step two, and will discuss the strengths and weaknesses of the four most common methods that are utilized for evaluating, selecting and prioritizing projects in the corporate world. Net Present Value (NPV), Internal Rate of Return (IRR), Straight/Discounted Payback Period and Profitability Index are the four of the most come methods used during step 2 of the capital budgeting process.Four fictional potential capital investments will be used to illustrate how the different methods can affect project selection for a portfolio. THEME PARK CAPITAL INVESTMENTS A theme park senior executive management team had four capital projects presented during the last capital budget meeting. The projects are a $250M park expansion, $50M value resort renovation, $500M new moderate resort construction and $200M new value resort construction. All these projects have similar completion time frames and have 20 year life expectancies.Years 1 to 5 cash flows for each project come from the pro formas, and Years 6 -20 are based on an expected 2% per increase in cash flows. The company has $750M to invest on capital projects this year, and they must decide which projects should be approved. NET PRESENT VALUE Net Present Value is the sum of discounted future cash flows and provides the appropriate adjustments for the time value of money. In short, NPV is the reverse of compounding interest, and this process begins with the selection of a â€Å"discount rate. † According to Smart, Megginson & Gitman, pg. 01, â€Å"A project’s discount risk must be high enough to compensate investors for the project’s risk† The discount rate can be based on the inherent risk of a project, the required rate of return on shares, cost of equity, etc. The discount rate should not be one rate for all projects with in a firm, but reflect the nature of the project. The formula for NPV is: In this calculation, CFt represents the net cash flow of the year and r is the selected discount rate. CF0 usually represents the initial outlay to get the project started, and is usually a negative cash flow.As a rule, projects with a negative NPV are not approved, but a â€Å"hurdle† could be set such as projects with a NPV

Human Evolution Essay

The Evolutionary History of Life on earth traces the process by which living and fossil organisms have evolved since life on the planet first originated until the present day. According to research earth formed about 4.5 Ga (billion years) ago and life appeared on its surface within 1 billion years. The similarities between all present day organizes indicate the presence of a common ancestor from which all known species have diverged through the process of evolution. Every organism has an evolved life history pattern. A life history pattern in which the way time and energy are allocated between growth, maintenance and reproduction. The Evolution of Human Behavior promotes there have been three major life history transactions toward later sexual maturation and longer lifespan. Such as; Prosimians to Monkeys, Monkeys to Apes and Apes to Humans, these patterns of life history characteristics resulting in parental care over long developing periods of human life’s expendency. In my opinion, in order for one must first find out what their genes have been up to in their past history and what they want in their present type of environment plays a big part as to where their future lifespan reaches. We have to consider both the successes and problems causing failures of attempts to use natural instincts to understand fully human behavior and reproduction. Human sexual selection is also an explanation for human social differences in which the human race evolves. Another behavioral perspective is the conclusion concerning the evolutionary base for differences in behavioral between men and woman. In addition, using survival skills such as; behavior in planning, consciousness, emotions, awareness and moral sense that often accompany what we do plays a big part in our destiny. According to anthropologist George Armelagos, ancient teeth tell us secrets that may relate to modern-day health: Some stressful events that occurred early in development are linked to shorte r life spans. Prehistoric remains are providing strong, physical evidence that people who acquired tooth enamel defects while in the womb or early childhood tended to die earlier, even if they survived to adulthood. The idea that many adult diseases originated during the fetal development and early childhood. Teeth are like a snapshot into the past, the evidence is  there and it is indisputable. Over half of the baby boomers here in America are going to see their hundredth birthday come to an excellent health. There will also be the other percent that will get to experience a shortened lifespan due to the lack of health effects in evolution ending in aging without children. Insurance companies are trying to promote and incorporate- The Die Younger plan so they can save millions of dollars on social security since they are running out. Not only are insurance companies promoting this plan but the child’s parent or guardian is also the cause of their shorter lifespan. The plan is pushing to encouraging Baby Boomers to smoke, eat fatty food, drink excessively, not exercise, and to generally burn the candle at both ends. In addition, the retirement age to be raised so Boomers have to keep working and live under a lot of stress causing them to have a shortened lifespan. The parents are not taking care of their healthy lifestyles but promoting bad eating and lack of exercise habits. In conclusion, health is an important role and affects one’s lifespan in evolution. So, unless we start taking better care of our health and habits we will not be able to elongate our life’s but shorten it instead. As the saying goes, what you do now reflects on your future.

Cultural Diversity Paper Essay Example | Topics and Well Written Essays - 750 words

Cultural Diversity Paper - Essay Example fornio died but before his death he wished his tomb to be inscribed that when he was born California was still Mexico and in his death, it is still Mexico. As Josà © was in California, he meets the love of his life Maria (Jennifer Lopez) who was a citizen of the United States and Maries her. However, Maria is illegally deported by the U.S. government to Mexico but manages to return to Los Angeles after two years through an arduous and long trip. In her return, she comes with their new child named Chucho. After 20 years, their eldest daughter Irene is getting married, and Paco and Chucho have grown-up. New add-ons to the family comprise Toni, Guillermo, and Jimmy. The movie gains energy after the marriage when Chucho unintentionally kills his rival Mejja, who was bothering him, and he becomes a fugitive. Afterward the Los Angeles Police Department shoots Chucho as Jimmy watched, this made Jimmy angry, and he followed the footsteps of Chucho of becoming a fugitive. Chucho’s gir lfriend gets pregnant and gives birth to Carlitos, but dies unexpectedly. Chucho blames the doctor and after stealing from a store he is jailed and Carlitos is brought up by his parents. After being released, he does not want to anything to do with his son but when he sees him he suddenly wants to take care of him. Nevertheless, his son does not like him but later they reconcile. The story ends with Maria and Jose recalling about their past (Nava, 1) The use of family or household as a character in the movie gives a point of reference for the numerous potential audience. However, simultaneously, the characters diversity and the narrative assessment of their choices in life tend to value integration over assimilation while the insinuations to Mexican religiousness insist on a certain degree of unreachability to the non-Chicano listeners. Therefore, the demonstration of family imitates the patterns already recognized with respect to the demonstration of space and language use. Concisely, from

United States Presidential Election Essay Example | Topics and Well Written Essays - 1000 words

United States Presidential Election - Essay Example Still, there is only one of these candidates that has the credibility, honesty, and vision necessary to lead our country through these difficult times. Barak Obama can help heal this nation's legacy of discrimination, speak credibly about a peaceful future for out great grandchildren, and lead our country with the vision needed to assure a peaceful and prosperous future for all Americans. The election of Barak Obama to the office of the presidency could help to begin to erase the centuries of oppression and discrimination felt by African Americans left behind by the legacy of slavery. African Americans have been denied education, employment, and opportunities in America for over 300 years. Electing Barak Obama would show that America is finally ready to put aside race and begin to heal our nation's deepest wounds. There is significant evidence that the country still has racist attitudes. The Democratic primary has had race as a central issue as we see overwhelming numbers of blacks supporting Obama, while Clinton's supporters are a majority white. White voters fear the possibility of a black candidate taking the White House. Yet, these fears are unfounded. The election of Obama will not ignite a race war or cause centuries of resentment to boil over into recriminations against the white power structure based on race. Instead, it will give African Americans the show of respect and dignity that we value as a people and profess as a nation. Barak Obama should be elected president because he is the only candidate that has the credibility to guide our country into a peaceful future. While the other candidates speak of their desire for peace, Obama is the only one that has based his decisions, actions, and rhetoric on the philosophy of peace. John McCain openly supports the War in Iraq and has been an outspoken proponent of an escalation in troop levels in Iraq. Clinton, while she calls for an immediate withdrawal, voted for the war and has done little as a US Senator to lessen the prospects of continued involvement or hasten the possibility of peace. Our foreign policy is contingent on having other countries trust that our words and intentions will measure up to our actions. Without trust, other nations would only tentatively support our efforts and would remain cautious when we spoke of a desire for peace. However, Obama's initial, and consistent, stand against the military action in Iraq can be depended on to be genuine . The confidence that other nations place in our true intentions could bring them into the philosophy of peace and insure greater cooperation with our efforts to create a free and peaceful planet. The social structure of America is in such a state of chaos that it will require a president that has a solid vision for the country's future to be able to be an effective leader. America is polarized on several hot button issues such as abortion. Obama has the ability to reflect America's respect to the right of privacy, while assuring the rights of the minority are protected. His pro-choice stance reflects the ideology of a majority of Americans. America also has the social ills of poverty and inadequate health care that divide our nation. It will take more than billions of dollars and massive federal programs to solve our nation's problems. It will take a leader that can defuse the polarization on the emotionally charged issues, such as abortion, and bring about a sense of unity to the country. America needs a leader that has a focused vision of what our

Cold War Essay Example | Topics and Well Written Essays - 2000 words

Cold War - Essay Example It is called Cold War because the relations were icy at the least and never reached boiling point to bring on a shooting war. It is also 'cold' because each try to undermine each other's political power. There were several zones where potentially both were at loggerheads and where another WW III could have ensued had hotter heads prevailed. In West Berlin, Russia blockaded this US,UK and France-controlled zone with a wall that made the latter construe that they were intentionally entrapped. A dtente ensued when US did a massive airlifting of supplies instead of using force. In the Iron Curtain, Stalin convinced these Slav and Balkan countries to accept communism as form of government because Russia needed them as buffer states against Germany but the Allies construed this as an intense its brand of government. In Greece and Turkey, Russia frowned upon when there the Truman Doctrine was applied i.e. US provided funds and massive aid so that both may be able to resist communist attempts to subjugate them. In Western Europe, the US came up with the Marshall Plan, which was a multi-billion aid program to reconstruct the almost bankrupt nations ravaged by WW II. Russia reacted with consternation because that would make it difficult for them to foment dissension and discontent. Then the NATO, composed of USA, Britain, Canada and Western Europe including West Germany was established for the purpose of mutually securing themselves from possible communist military aggression. Despite the overweening tension and intensified hostilities, no full-scale war emanated. And this was because USA had invented the atomic bomb and displayed how it can resolve conflicts with dire consequences. It is because of the development of these atomic and hydrogen bombs, missiles and other arsenals of war and because of the complexity of plans involved in upsetting the rival that espionage became a necessary tool to outwit the rival. As early as the 1920's, USSR through its NKVD and OGPU intelligence agents, had already penetrated the State and the War Departments and other government agencies by recruiting left-leaning Americans, foreign-born Americans and Russians as spies to obtain classified and confidential secrets and transmit3 them to Moscow as microfilms or as encrypted cables. Then, the interest of the Russian spy ring was the industrial and military secrets of USA and the first target for infiltration was the FAECT(Federation of Architects, Engineers, Chemists and Technicians) and with satisfying results (Usdin 28). In one case, it was discovered that espionage had reached the top echelon of the State Department with Alger Hiss, one of its top officials caught flatfooted when Time Magazine editor Whittaker Chambers, himself a confessed Soviet agent, showed and testified that Hiss passed on to him a microfilm of State Department documents. Even the film industry was not spared as the HUAC (House Un-American Activities Committee), alarmed by the trend of left-leaning films, interrogated directors

Land Law and Professional Advice Essay Example | Topics and Well Written Essays - 1000 words

Land Law and Professional Advice - Essay Example Since the completion of the sale agreement, various concerns have been raised, which are fully addressed to in this report. First, Miss Horrock in a letter dated 23rd January 2012, claims that a neighbour, Fred Furnace found some gold coins in the property which appear to be Roman. This raises the possibility of a treasure as defined under section 1 of the Treasure Act 1996. For the purposes of the coins, section 1(1)(a)(ii) read together with section 3(4) requires that, for a coin to fall under this Act, it must be one, which when found, is one of at least two coins found together. It must be at least 300 years old and have a percentage of precious metal. Hence, it shall be necessary to establish these claims, which if true means that the coins found satisfies the requirements laid down in the Act and, therefore, amount to a treasure. With regards to ownership of treasure, section 4 and 5 apply. Section 4 states that the ownership of the treasure vests in the franchisee, if there is one, otherwise in the crown. Section 5 defines a franchisee and subsection 1(b) is relevant to this case. It includes in the definition as successor in title who would have been the franchisee of the crown in a right of treasure trove for the place where the treasure was found. Therefore, the gold coins should vest in Poppy, who is the successor in title to Victor Majelin. ... This raises the question of fixtures and chattels on land. It is trite law that fixtures are part of the land while chattels are not. It shall, however, be necessary to ascertain the terms of the sale agreement. If the agreement show that only land and nothing else are being bought and sold, the purchaser buys everything affixed to land such as buildings, fences and trees (Drake et al 2007). If the vendor does not intend to include a certain fixture in sale, this must be stated in the agreement. On the other hand, where purchaser intends to purchase chattels, the intended chattels must be listed in the sale agreement. To ascertain whether an item is a chattel or a fixture, one has to check at the purpose of the annexation. If the object stood affixed for the enhanced enjoyment of the land, the object is likely to be a fixture, but if it were intended to be placed there for a temporary purpose or so that the property can be better enjoyed; it is likely to be a chattel. An example incl udes; tapestries as held in Leigh V Taylor [1902] AC 157, or ornamental panelling as held in the case of Spyer V Philipson (1931) 2 Ch. 183. It is necessary to look at the degree of annexation in order to decipher the purpose. If the object cannot be removed without causing significant damage, it is more likely to be a fixture though this is not conclusive, (Drake et al 2009). In this case, it is clear that the garden water feature which was cemented forms part of the land. The same shall apply with regards to the old range cooker per the presumptions made under the 2nd schedule of the standard sale agreement. With regards to the removable pebbles and a sprout, they are also fixtures with regards to their degree of annexation. Consequently she has

What extent can we speak of a uniform impact of the cold war on Essay

What extent can we speak of a uniform impact of the cold war on western europe in the period from 1950 to 1980 - Essay Example The discussion here will focus on Western Europe, more specifically Britain, Spain, and Italy. After WWII, Europe was divided by Western Europe, allies of the United States, and Eastern Europe, which was controlled by puppet Russian communist regimes. The United States wanted an independent Western Europe. However, the United States only wanted an independent Europe, if the countries were capitalist. Whereas the Western Europe countries did not like having Russia control half of Europe, with America influencing the other half, they accepted it to the alternative. Brogi (2001, 76) quotes John Gaddis following statement: the hard reality was that Britain, France, and their smaller neighbors preferred the known risks of influence to the imponderables of a unified third force that could conceivably fall under German or even Russian control. Thus for the avoidance of a third world war, Western Europe tolerated the United States influence. â€Å"Indeed the Europeans proved incapable of overcoming their ancient rivalries, but were able to adapt and even promote dependence on the United States† (Borgi, 2001, 76). By depending on the United States, Britain, Spain, and Italy could transfer the responsibility of protecting their nations from Russia to the United States. The United States became the protector of Britain, Spain, and Italy during the Cold War. When before the Cold War, these countries were more dependent on European and self preservation against Russia and Germany. Great Britain and the United States have been allies before and since both world wars. However, the United States, during the Cold War, proved to Great Britain where the true power lay. For example, when the Suez Canal crisis arose, Great Britain and France wanted to resolve the issue militarily (Fraser, 2002, 74). The United States did not want to provoke the Russian backed Egyptian president, Nassar for fear of another world war. To stop France and

Critcally examine the success of operation management theories ,tools Essay

Critcally examine the success of operation management theories ,tools and techniques in the uk supermarket sector - Essay Example Operations management is a science that deals with coordination of all functions of an organization. The major departments within an organization include; accounting, marketing, human resources, information technology departments and purchasing have to be well controlled. The key factors that have led to the development of operations management include; globalization, total quality management, empowerment and techonology.With the world becoming a global village, supermarkets are striving to provide services more efficiently and effectively so as to stay at the top of competition by quickly delivering their services. Operations management is a transformation process that interacts with various departments in an organization. According to Slack â€Å"Operations management helps in developing and managing the value chain process and also in supporting it through using different tools, techniques and methods in order for an organization to be in a position to achieve its goals and objectives within a specified period of time. The Total Quality Management is a holistic approach that requires that all the managers and personnel working for supermarkets to be able to handle customers in an appropriate way. The major supermarkets in the United Kingdom also have got a major challenge in ensuring that they empower all their members of staff regardless of their hierarchy in the organization so that they can take part in achieving the company’s goals and objectives. It refers to the process of organizing and controlling the activities of a business so as provide goods and services to the customers at the appropriate time and place. The major functions of any business involve finance, marketing and operations management. Some of the processes involved in the process management theory include forecasting, capacity planning, and management of inventory, quality assurance, motivation and training of the employees. The traditional objective of

Cover letter &Resume Essay Example | Topics and Well Written Essays - 500 words

Cover letter &Resume - Essay Example Likewise, I have already established an education and design company in China, which gives me a competitive advantage through the experiences encountered in start-up and in operating a business endeavor. I came to the United States to earn a degree in Economics, which is a field of discipline I consider of crucial importance to contemporary global organizations. I plan to eventually venture in the international market and my gaining a degree in Economics in a prestigious university in the United States would give me significant advantage to succeed. the identified software programs; as well as navigate the Internet for research and other social activities with exemplary skills. I am also a good team player; I am highly motivated and flexible; as well as manifest the ability to efficiently handle multiple tasks, as required. I am hereby attaching my resume for your perusal. I could be reached at any of the contact numbers indicated therein. I would also be available for scheduled interviews at any of your most convenient time. Rest assured that when considered for the position, our professional relationship would definitely be mutually beneficial. I would be looking forward to hearing from you soon. Objective: My professional goal is to become part of a global organization and to apply the theoretical frameworks gained in the field of economics. As a highly motivated and immensely driven individual, I plan to be an instrumental contributor to future organizations through the application of developed skills in economic policy design, international business and global management, as well as in evaluating micro- and macro-perspectives affecting the organizations’ operations. "Spring 2014 Internship, Economic Security Washington D.C." 2014. The EastWest Institute.

Clinical Depression Overview Research Proposal Example | Topics and Well Written Essays - 1250 words

Clinical Depression Overview - Research Proposal Example When depression strikes, a person will not only feel down, it may affect his ability to function normally in society, and in some extreme cases, it provokes the person to commit suicide. Being the most common mental disorder in the United States, depression affects over 17 million Americans each year ("Understanding Depression"). With these, depression is obviously a serious condition that should on no account be ignored. In identifying depression, certain factors such as gender, age, and culture should be taken into account. The manifestations of depression in different people are likely to vary in accordance with the aforementioned factors (Smith, R. Segal, and J. Segal). For instance, an elderly man would most probably exhibit different signs and symptoms of depression from a teenage girl. However, there are common signs and symptoms that we can watch out for. These signs and symptoms can be categorized into those involving the person's mood, his thinking, his behavior and physical manifestations ("Depression - Types, Causes and Symptoms"). Symptoms that involve the person's mood include feelings of sadness, hopelessness, helplessness, numbness, emptiness, anxiousness, and guilt. People who are depressed find it hard to enjoy and feel good about things that they used to do normally ("Depression - Types, Causes and Symptoms"). A depresse...People suffering from depression also find it difficult to think clearly and they have poor concentration and memory ("Depression - Types, Causes and Symptoms"). In some cases, as earlier mentioned, depressed people have suicidal thoughts and some actually attempt to kill themselves.

China Trade from Early 17th Century to Mid 19th Century Essay Example for Free

China Trade from Early 17th Century to Mid 19th Century Essay Around 17th and 18th century, Western countries were extremely eager to reach the profitable Chinese market due to its privileged geological location. Although China had traded their riches with Europe along the Silk Road for centuries, Chinese government were afraid that the sea trade to the south would potentially corrupt their â€Å"imperial kingdom† and further try to conquer the country. From 1700 onwards, the government established a set of rigid restrictions imposing the practice of Co-hong to confine foreign trades and merchants in Canton. However, by late 18 century, the trading system seemed to change. The British commenced the opium trade, which created a steady demand among Chinese addicts and further solved the chronic imbalanced trade. As the Opium War broke out with Britain, China was no longer on the top of the world. The Celestial Empire not only was forced to be subservient to British trading regulations, but also somewhat became a semi-colonial country. The East India Company founded in 1600 that held a monopoly in east India by the British government was rapidly enlarging its global trading influence in China. By sending a company trader to address their concern regarding to the unreasonable restrictions on trade in Canton, the representative James Flint was arrested and imprisoned for being breaking the â€Å"Canton trading law†. This incident showed China’s superior attitude toward Westerners and how they manipulated the trade irrationally in their best interest disregarding the concerns of foreign traders. The growing number of foreign traders in the late eighteenth century strongly threatened the Qing. They feared that the trade with foreign merchants would give the opportunity for Westerners to corrupt China; therefore, a set of laws that was so called â€Å"Canton system† was established. The system restricted all European trades to only one port Canton and foreign merchants were forbidden to abode in the city except trading season. Moreover, the Europeans had to obey the licensed Co-Hong merchants, of who were responsible for controlling the trading behavior in Canton. As a result, these complex and irksome rules created a tension between foreigners and Chinese merchants, British traders especially. In 1792, a British ambassador Lord George Macartney set sail to China hoping to seek the approval of the Qing Emperor to loosen some of the trading restrictions to the British traders. Yet, the letters to the Emperor was unreservedly rejected; the response was fairly disappointing. Emperor Qianlong’s edicts to George III in response to McCartney’s demands on English traders showed his arrogant and condescending attitude toward the British. â€Å"As your Ambassador can see for himself, we possess all things. I set no value on objects strange or ingenious, and have no use for you country’s manufacturers. (105 Cheng and Letz with Spence) Furthermore, in his second edict, he stated, â€Å" But your Ambassador has now put forward new requests which completely fail to recognize the Throne’s principle to â€Å"treat strangers from afar with indulgence† and to exercise a pacifying control over barbarian tribes, the world over. † (106 Cheng and Letz with Spence) He describes foreigners as â€Å"barbarians, which showed how he disrespected all Westerners and measured China as the most superior in the world; other countries would have obey Chinese â€Å"law†. British viewed Qing’s legal code as unreasonable and perceived the Chinese officials as obstinate governance, which further exasperated the existed tension between the two nations. Meanwhile, a network of opium was widely distributed throughout China. In order to pay for the tremendous demand of Chinese tea, silk and porcelain pottery in Europe, Britain and other European nations determined to import the one product which became the factor that corrupted the Imperial Empire: opium. Opium addiction level arose in a short period of time, which affected not only the imperial troop but also the governmental officials. Thus, Emperor Daoguang appointed Commissioner Lin to confiscate opium from English ships and refused to pay indemnity to the British traders. The efforts of the Qing dynasty to coerce the opium restraints resulted in the trading conflict, which had already existed for decades between Britain and China triggered the Opium War in 1840. Lord Palmerston’s dispatch to the Emperor of China was a message to inform the Qing that Great Britain would no longer be submissive. The British government therefore has determined at once to send out a Naval and Military Force to the Coast of China to act in support of these demands, and in order to convince the Imperial Government that the British Government attaches the upmost importance to his matter, and that the affair is one which will not admit of delay. † (125 Cheng and Letz with Spence) The dispatc h simply showed the Britain’s intentions to use force to protect its subjects in China, Canton in particular. After the damaging defeats in the war, the first unequal treaty, Treaty of Nanjing was signed after the War, which awakened China from its fantasy of superiority. In the Treaty, China opened several ports and exposed its markets to Western merchants, which turned the central kingdom into a semi-colonial country. Consequently, the role in the national economy had reversed. China was now forced to obey all the demands in the Treaty of Nanjing signed with the British. China was no longer the â€Å"Celestial Empire†; inversely, it was slowly sliding down from the top of the world.