How individuals, institutions, governments and business acquire financial resources - Free Essay Example

Sample details Pages: 2 Words: 697 Downloads: 8 Date added: 2017/06/26 Category Business Essay Type Analytical essay Did you like this example? Organizations or intermediaries that help the financial system operates efficiently and transfer funds from savers and investors to individuals, business and government that seek to spend or invest the funds. Financial Markets: These are the physical location or electronic forums that facilitate the flow of funds amongst investors, business and governments Don’t waste time! Our writers will create an original "How individuals, institutions, governments and business acquire financial resources" essay for you Create order Investments: It involves sale or marketing of securities, the analysis of securities, and the management of investment risk management of investment risk through portfolio diversification. Financial Management: It involves financial planning, asset management, and fund raising decision to enhance the value of business. Course Work: Question No. 1: Net Present Value: It is basically the difference between the present value of cash inflows and the present value of cash outflows. NPV is used in capital budgeting to analyze the profitability of an investment or project. If the NPV of the project is positive, then the project should be accepted. However, if NPV of that project is negative, the project should probably be rejected because cash flows of that project will also be negative. Calculations for Alice and Wonderland Limited: The market weighted gearing of Alice Ltd pound;1 ordinary shares amounts 500 million GBP = owns 500 million shares. Market value of shares = 500-4 = pound;2000 million Market value of bonds = 5.7-93 = pound;530.1 million Market value of debt = pound;530.1 million Total value = 2700+530.1 = pound;3230.1 million Fraction debt = 530.1/3230.1 = 16.4% Fraction equity = 2700/3230.1 = 83.6% Asset beta for Alice Ltd Assets beta = (2700/ (2700+530.1-.65))-1.5 = (2700/ (2700+344.565))-1.5 = (2700/3044.565)-1.5 = 0.887-1.5 = 1.33 Wonderland equity beta Beta wonderland = 1.33 (1 + (0.35-0.65/0.65)) = 1.33 (1 + 0.35) = 1.33- 1.35 = 1.796 Cost of equity Using CAPM (Capital Asset Pricing Model), the formula for cost of equity is Cost of equity = risk free rate + beta- (market return risk free rate) Cost of equity = 3.5% + 1.796- (12% 3.5%) = 3.5% + 1.796-8.5% = 3.5% + 15.27% = 18.77% CAPM: It is a model which describes the relationship between risk and expected return and that is used in the pricing of risky securities. This model says that the expected return of a portfolio or of a security equals the rate on a risk-free security plus a risk premium. If this expected return does not match or beat the required return, then the investment should not be undertaken. The security market line plots the results of the CAPM for all different risks (betas) Cost of equity for Wonderland Inc. = 18.77% Capital Asset Pricing Model Cost of equity = 18.77% Cost of debt = 8% Fraction debt = 35% Fraction equity = 65% WACC (Weighted Average Cost of Capital): Corporate assets are financed by two ways either by debt or by equity. WACC is the average of the costs of these sources of financing, each of which is calculated by its respective use in the given situation. By taking a calculated average, we can see how much interest the corporate has to pay for every penny a corporate finances in the project or in its business. WACC can be calculated as follow: WACC = Fraction equity cost of equity + fraction debt cost of debt- (1 T) WACC = 0.65-0.1877 + 0.35-0.8- (1 0.35) = 12.2% + 0.35-0.8-0.65 = 12.2% + 18.2% = 30.4% NPV for Wonderland Theme Park: Admission price = 25- (0.3-20,000) + 15-(0.7-20,000) = 150,000 + 210,000 = pound;360, 00 Contribution from food and drinks = 10-20,000-0.4 = pound;80,000 Contribution from gifts and souvenirs = 7-20,000-0.45 = pound;63,000 Revenues = pound;503,000/day Revenue Projections Annual revenues = 503,000-365 = pound;183.6 million Revenues at year 0 = pound;183.6 million Revenue at year 1 = 183.6-1.05 = pound;192.78 million Revenue at year 2 = 192.78-1.05 = pound;202.4 million Revenue at year 3 = 202.4-1.05 = pound; 212.52 million Revenue at year 4 = 212.52-1.05 = pound;223.146 million Revenue at year 5 = 223.146-1.05 = pound;234.3033 million Wonderland can secure a loan of pound;400 million at 8% fixed rate. Thus the company will pay an interest on the loan which is tax-free. Hence this must be excluded from the taxable income similar to capital allowance. Hence the company will pay pound;32 million as interest every year. The after tax realizable value of the non-current assets after five years of the project is given to be between pound;100 million and pound;200 million. This is assumed to be pound;150 million. NPV= initial cash outlay of -250 -net working capital of -60= net cash flow of -310 Critical Analysis: Going with the NPV rule for single projects, the negative NPV of cash flows indicates that the theme park project should not be undertaken.

Genocide An International Crime - 2054 Words

Genocide is a horrific, systematic destruction of people that affects the international community because of its severity and violation of human rights. Genocide is considered an international crime because its consequences rattle the world. Genocide can occur for many reasons. The reasons vary from a group feeling threatened, to sending a warning to others, or to simply gain power among the community. Another reason for the occurrence of genocide may be to gain wealth, whether it is economical or territorial. If a group sees another as a barrier between their wealth and power they will do whatever it takes to exterminate the threat. In this paper, I will focus on the Rwandan Genocide that occurred in 1994 and the impact it had on the victims. Genocide was defined in 1948 by the United Nations as an international crime. Prior to the Holocaust in Nazi Germany, there was no definition for the word genocide. The international world realized that this was a major crime that could not go unnoticed and needed to start defining and prosecuting perpetrators. The UN identified genocide as the killing of groups, causing serious bodily or mental harm, deliberately inflicting on the group actions to bring physical destruction, preventing births within the group, or forcibly transferring children from one group to another (Campbell, 2009). Any one of these acts executed with the purpose to destroy, in whole or in part, a national, ethnical, racial or religious group isShow MoreRelatedThe International Convention on the Prevention and Punishment of the Crime of Genocide2250 Words   |  9 Pagestheir will. This essay will look into relevant case law, analysing and evaluating judgments of a particular case in relation to the stolen generation being a form of cultural genocide. 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The situation started when two of the six republics of Yugoslavia, Slovenia and Croatia, declaredRead MoreInternational Community Is Culpable For The Rwandan Genocide1376 Words   |  6 PagesTutsi and moderate Hutu were murdered during the Rwandan genocide (Destexhe, 1994). The international community failed to prevent or stop this slaughter. Considering the horrific nature of this genocide and the vast number of victims, there is a question whether the international community is culpable for the Rwandan genocide; specifically, the role of its key players, the US, the UN, France and Belgium. I will argue that the international community is culpable and focus on three reasons for thisRead MoreCrimes Against Humanity : Genocide1414 Words   |  6 Pages Crimes against Humanity final Name: Institution: â€Æ' Crimes against humanity Introduction The law is credited with ensuring that people get justice and fair treatment in the legal system. 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The United Nations recognized the need for an international criminal court to prosecute and punish persons responsible and to help end impunity for these perpetrators of the most serious crimes against humanity. In 1948, the United Nations General Assembly adopted the Convention on the Prevention and Punishment of the Crime of Genocide. By 1951, international treatiesRead MoreDo We Need An International Criminal Court?1227 Words   |  5 Pages Do we need an international criminal court ? The International Criminal Court (ICC), governed by the Rome Statute, is the first interminable, treaty based, international criminal court established to help end exemptions for the perpetrators of the most serious and heinous crimes of concern to the international community. The ICC was mandated in July of 1998 but was bought into force by July of 2002.1 The Rome Statute is a mutual treaty which serves as the ICC s foundational and leading documentRead MoreThe Death Of Genocide : The Annihilation Of Minorities Essay1548 Words   |  7 Pages Genocide is the systematic mass murder of an ethnic, race, religious, or national group based on discriminatory preconceptions (Payne 33). The heart of genocide is destruction: the annihilation of minorities. Minorities have always been the scapegoat for most governments in times of crisis or when the government has been mismanaged. Minorities are even considered non-human. The annihilation of a specific target group does raise to question why and how this would be carried out. A genocide happens

Deregul;Ation Of The Electrical Industry Essay Example For Students

Deregul;Ation Of The Electrical Industry Essay Deregulation of the Electrical IndustryThe roots of modern day regulation can be traced all the way back to thelate 1800s and found in the form of antitrust. By the beginning of the 20th century, the U.S. government had formed the interstate Commerce Commission to regulate the railroad industry, and shortly thereafter, many other regulatory commissions were founded in the transportation, communication, and securities fields. The main goal of these regulatory commissions was to create a reasonable rate structure that would be appealing to both producers and consumers. While this system has worked for many years, it has recently come under heavy criticism, with many people pushing for open competition among electric power producers. Although once believed to be an impossible proposal, competition among electric power producers is finally a reality in a few areas. Massachusetts is just one state where legislation implemented to create competition among electric power producers is not only favored by the people of the state, but has also provided significant rate reductions as well. The attempt at regulating price in the electric industry is a troublesome one. The objective is not only to minimize the cost to consumers, but also to create a rate structure that will entice the electric company to remain in the industry. The regulatory commission wants the electric company to have a reason to innovate so that they will be able to provide cheaper power in the future. However, if the commission captures all gains from innovation in the form of lower pric es, then the electric company has no incentive to undertake any type of innovation. Therefore, a compromise must be reached which would provide adequate incentives for firms to undertake cost-reducing actions while at the same time ensuring that the price for consumers is not exorbitant. The term regulation refers to government controlled restrictions on firm decisions over price, quantity, and entry and exit. Each factor of an industry must be regulated for producers and consumers to truly benefit. The control of price does not mean setting one fixed price, but rather entails the creation of a price structure for purchasing electricity during peak and non-peak times. The control of quantity refers to the governments attempt to control the amount produced or in this case the amount of electricity produced. For example, in the electric industry, it does not make sense to have a lot of small power plants produce electricity. However, at the same time one company can not be allowed to monopolize the industry and set prices at its own discretion. Another factor in this problem is the control of entry and exit in the electric industry. By controlling who can enter the industry, the government can control who produces the electricity and how much of it they produce. However, the effectiveness of regulation has begun to be questioned, and created the evolution of a more competitive market. Ever since the Public Utility Act of 1935, which in turn created the Federal Power Commission, the role of electric utility regulation and its effectiveness has been questioned. Since that act was passed into legislation, the question has always remained: has electric regulation made a difference? Major studies done throughout the 20th century found conflicting results. A study published in 1962 and conducted by Stigler and Friedland compared the price of electricity in states with regulation to the price in states without regulation. However, at the time all states had electric re gulation, so Stigler and Friedland had to go back to the 1920s and 1930s to find states without regulationTheir finding was as expected. In 1922, the average price of electricity was 2.44 cents per kilowatt-hour in states with regulation. However, in states without regulation, the average price increased to 3.87 cents per kilowatt-hour. While many would say that prices could vary for reasons other than regulation, Stigler and Friedland controlled the analysis of other variables and found that no significant difference in price existed. Other critics felt that this study was done in a time when regulation was just getting started, and that regulators in the present day are more effective. Two other studies which found different results were those conducted by Meyer and Leland and another done by Greene and Smiley. In their study, which used data from 1969 and 1974, Meyer and Leland utilized econometric estimates of demand and costs to find hypothetical unregulated prices. Their concl usion was that the regulated prices were significantly lower, but that even lower prices were demanded. In a similar study conducted by Greene and Smiley, they found that unregulated prices were 20-50% higher than actual regulated prices. Although these studies seem to reach conclusions that support regulation, the alternative finding by Leland and Meyer that even lower prices were demanded seems to be an indication towards open competition among electric producers. Soon thereafter, the trend toward competition between electric producers began to emerge. Life And Times Of Alexander The Great EssayHowever, even though the law seems to have many more benefits than it does negatives, it has come under recent criticism. Many opponents of the law feel it is not doing its designed purpose, and consumer backlash was so great that Issue 4 asking whether or not the law should be repealed. An organization called The Campaign for Fair Electric Rates, backed by failed congressional candidate John OConnor and consumer advocate Ralph Nader, led the effort to repeal the law, calling it the biggest consumer rip-off in Massachusetts history. The big issue involved in the attempted repeal was lawmaker reneging on their promise to protect consumers by allowing utilities to recover 100% of their bad investments. Because deregulation will cause some utilities to lose money on investments in power plants or on contracts they made when they expected to keep selling power at a regulated price, the question becomes do they deserve compensation for these st randed costs, which may approach $200 billion nationally? For instance, utilities spent more than $5 billion building the Seabrook nuclear plant in New Hampshire, which produces 1,150 megawatts. In contrast, private developers have proposed more than 50 new plants, which combined would produce 30,000 megawatts, and the cost of these projects is estimated at slightly more than $15 billion. The utilities argue that public regulators approved those expenses and that the state can not back out on them now, stating that many plants have already begun to implement the new law, including selling most of their power plants. Repealing the law now, they argue, would create utter chaos. Therefore, a provision was written into the law allowing for utilities to recover all of their stranded costs over a 10-year transition period. While proponents of the law were hoping for a 30% rate reduction, of which two-thirds would have come from consumers not having to pay for most of the utilities strande d investments, they will now have to settle for a guaranteed 15% rate cut, hopefully with more to come through competition. The question now on everyones mind is: has the law served its purpose and reduced electric rates? In a study done by Standard and Poors DRI entitled Economic and Environmental Analysis of the New Massachusetts Electricity Law, and released on September 2, 1998, it found that the new has triggered substantial economic and environmental benefits. According to the study, electric rates will decline by almost 28% by the year 2010 as a direct result of retail competition and industry restructuring. The DRI, a conservative report when compared to others, predicts that consumers will save $470 million in 1998 alone, and increases that estimate to at least $550 million per year in future years as a result of the new law. Also, the study predicts the Commonwealth to achieve higher economic output and employment growth triggered by the estimated $10 billion consumers and businesses will save on electricity costs. By 2010, there will be over 60,000 more jobs, a $19.6 billion gain in consumers cumulative real discretionary income, and lower price inflation. All of this forecasting appears to put the law in a favorable light, but many want to know how its working now. According to the Massachusetts Electric Company, its 970,000 customers have saved a total of $67 million on their electricity bills in the first six months of the new electricity law. On September 1, savings for the companys customers increased to more than 15%, or a total savings of $25 million per month, one full year ahead of the required rate cut. This was due to the companys affiliates selling their power plants. SummaryBy examining the early results of the Massachusetts Electricity Law, along with projections such as the ones provided by Standard and Poor, one can determine that the deregulation of the electric industry has been long overdue. The deregulation of the electrical industry proves that any industry can and should be deregulated. It also proves that competition of the utility companys is in the best interest of society as a whole and that no industry should be allowed to exist without it. Economics Essays

The Odyssey Vs. The Aeneid Essays - Greek Mythology, Epic Poets

The Odyssey Vs. The Aeneid Comparisons: The Odyssey Vs. The Aeneid Virgil was a creative genius from his time, but it can be understandable that many of his works may have been influenced from previous works of literacy. A comparison of Virgil's, The Aeneid, and Homer's, The Odyssey, will help to show the different aspects of Roman and Greek cultures. It will also help to illustrate the effects the Greeks had on Roman culture. There are many differences and likenesses between these two epics. Greek culture and literature had a great dominating influence over Roman life, therefore, the influence of style and the stories written by Virgil adopted many of the old Greek ways. However, Virgil did not imitate, he gave a new meaning to the works that he borrowed and added his own thoughts and opinions that expressed and explained Roman life to the rest of the world. The Aeneid is not only a personal epic about Aeneas, but also exaltation and beautification of Rome and the future of the people. There is a greater emphasis placed upon the founding of Rome rather than the actual adventure of Aeneas. Virgil's epic shows that he had a great admiration and pride in Rome and its people. Homer used the story of The Odyssey to express his understanding of human nature and the world that humans live in. His techniques were used to express his ideas and beliefs. Homer's poems were accepted as the ultimate authority for information about mortality and early history.5 The introduction of epic poetry begins with an invocation. This is where the writer states the theme of his work and asks for divine aid in telling the story . During the time of Homer, an invocation was used as a prayer based on the belief that art and poetry were a sacred act of creation. In Virgil's time, the invocation was only used because it was a tradition in epic poetry. The change in Virgil's invocation reveals his different approach to this epic. This new subject reflects the role Aeneas plays in Rome and the influence the gods have over his future. For example, Virgil begins his epic asking for godly inspiration to tell his story correctly: ?Tell me the causes now, O Muse, how galled In her divine pride, and how sore at heart From her own wound, the queen of gods compelled him-? The Odyssey's invocation also announces the theme of his poem and he too asks for godly inspiration, except Homer uses real prayer to ask for this assistance. ?Sing in me, Muse, and through me tell the story of that man skilled in all ways of contending, the wanderer, harried for years on end, after he plunders the stronghold on the proud height of Troy.? Both of these pieces show similarities in their form and structure, but the statement that is being expressed is completely different. Homer uses more of a mythical, spiritual aspect, while Virgil uses a more formatted approach and less sacred emotions. Many of the situations from the Homeric poems are embraced in The Aeneid. They were however changed by Virgil throughout his writing of the epic. Some examples are the shipwreck, the tale told by the hero at the banquet, and the descent of Aeneas/Odysseus into Hades. The shipwreck, in the Aeneid in Book 1, is when Aeneas and his ships left Sicily, on the last part of their journey to Italy. Juno bribed Aeolus, the king of the winds, to cause a furious storm that would cause their ships to become overtaken by the sea. In The Odyssey, the shipwreck is told in Book X. Odysseus and his men landed on the island of Aeolus, the king of the winds. As a gift, from Aeolus, Odysseus received a large leather bag that contained all the vicious winds, which could drive his ships off course. When one of Odysseus' men opens the bag, the ship is blown off course and destroyed. Notice the same name used for the god Aeolus. Aeneas is asked to tell his tale at the banquet held by Dido, in Book 1, Aeneas tells his tale to Dido in Book 2. Odysseus tells his tale while he is among the Phaeacians. He tells his tale in Books IX, X. XI, and XII.