Stock investment project Essay Example | Topics and Well Written Essays - 750 words

Stock speculation venture - Essay Example The disappointment of one speculation has less odds of harming my general execution since I have other venture to rely upon for their benefit. Putting resources into shared assets empowered me to have a bigger number of speculations than when I didn't think about the choice. I had the option to misuse the chance of dollar cost averaging (DCA) whereby I would contribute any sum through the venture chief. I thought about that without shared supports I would have endured the danger of greater expense emerging from putting resources into assortment of stocks. The administration cost proportion (MER) is the equivalent paying little heed to the measure of stock I had put resources into; henceforth the chance of putting resources into huge number of stock without fearing the impact of the commission expenses (Rowland and Lawson, 2012). The business expense for entering and leaving the market likewise went about as a rate misfortune on my speculation in this manner calling for interest in sh ared assets. Execution I put resources into six unique stocks in the market including: SOHU.COM Inc, Packaging Corp of America, Intel Corporation, Yahoo Corporation, Cambrex Corp, GIS. The contributed had a total assets of $100,044.46. Total assets for the entire undertaking was $100,044.46; purchasing power for the stocks was $115039.92 with money surviving from $14,995. The general increase was $44.46 while the general return was 0.04% and today’s gains was 1.39%. On November 2, 2013 coming up next was the manner by which the stock sold in the market for the organization I picked with each having financier charge of $10 appended. Coming up next is the picture demonstrating the general execution of the stock and that detailed by the 6 unique stocks in the market. An increase of 1.39% is useful for beginning a task, and I consider proceeding to put resources into these market stocks. Impact of monetary conditions The predominant financial conditions affected on the productivi ty of my stock portfolio. Uncertainity about current worldwide monetary conditions went about as a significant viewpoint in my venture choice (Rowland and Lawson, 2012). I feared for the vulnerability since this normally diminishes the spending capacity of the organizations and the purchasers. The organizations and the shoppers would diminish on their spending particularly in light of the negative money related news and more tight credit in the market. More tight credit suggests the resemblance of greater expense to be related with any speculation conditions. The nearness of these conditions made me to waver in settling on venture choice in the market. Further the overall vulnerability in worldwide financial conditions likewise set off the idea of interest significantly contrasting among various nations. This implies the activity by the organizations in raising costs on merchandise and ventures to raise their benefit, would have less effect since the wiliness of the customers to pur chase is such a great amount of various in different nations. Instinctively, the condition exposed the organizations to seeing changeability in their pay and costs in view of the increases or misfortunes acknowledged from the deal or trade of budgetary instruments (Rowland and Lawson, 2012). Subsequently, I had settled on a choice corresponding to company’s readiness towards making up for the potential misfortunes coming about because of the vulnerability in the worldwide financial pattern. The above conditions influenced the expense related to speculation, particularly the beginning expense. For my situation, the

Acetic acid from methanol Essay Example | Topics and Well Written Essays - 1000 words - 1

Acidic corrosive from methanol - Essay Example This bit of craftsmanship additionally gave me how difficult work pays as the individual swinging is having a good time because of the extravagance introduced by the encompassing. Actually, I can recommend that social qualities have a more prominent reverberation than policy driven issues as introduced by this craftsmanship. To begin with, the craftsmanship depicts how the world ought to show up regarding tidiness and how things ought to be orchestrated in the advanced world or society. It likewise shows the class contrasts without requiring a lot of clarification as it is anything but difficult to decipher. â€Å"This is the latest bit of workmanship which was made in 2011 to connect to the screening of the film ‘The Exit to the Gift Shop’† (Kok 19). The scene where the craftsmanship was made is some good ways from where network individuals dwell. They were attempting to collect some cash by changing over the parking area into an advanced park with a decent play area. It is perhaps the most grounded case of my creative work that has been pleasantly beautified to catch practically all parts of the cutting edge imaginative work. This is a direct result of the shading utilized, outward appearance and the state of the craftsmanship. Its outward picture likewise gives more than one portrayal of what the craftsman was attempting to clarify not at all like his first aesthetic work that indicated just one importance. The young lady swinging and the works on the divider are highlights that qualify this bit of workmanship to have more than one importance clarified in a similar bit of craftsmanship. It is important that the space utilized is little yet the significance is wide and can without much of a stretch be comprehended from the initial introduction by survey the picture. From the outset as I watched the picture, it gave me an alternate significance after which it changed totally when I watched it fundamentally. It affected my perspective to give both the internal and outward significance to any masterful work before reaching a determination. This work is accordingly present day when contrasted with different works by different specialists. The given work delineates some specialized foundation abilities where the craftsmen had the option to adjust every one of his components.

Columbias provost shares post-election message COLUMBIA UNIVERSITY - SIPA Admissions Blog

Columbias provost shares post-election message COLUMBIA UNIVERSITY - SIPA Admissions Blog Dear fellow members of the Columbia community: The presidential election has prompted intense concern for the values we hold dear and for members of our community who are apprehensive about what the future holds.   Some of this concern is focused on possible changes to immigration laws and to the federal enforcement of those laws.   Some is due to possible changes elsewhere in federal law and policy.   Reports of bias crimes and harassment occurring since the election are also deeply disturbing, particularly so when those who feel threatened are part of a community like ours, committed to tolerance and reason. President Bollinger has asked me to work with the University administration and our community to develop a response to these concerns.   I am writing to share information about relevant policies and our plans for ensuring that every person at Columbia feels safe, is able to proceed unimpeded with their studies and their work, and understands beyond question that Columbia’s dedication to inclusion and diversity is and will remain unwavering. First, the University will neither allow immigration officials on our campuses without a warrant, nor share information on the immigration status of undocumented students with those officials unless required by subpoena or court order, or authorized by a student.   Moreover, New York City continues to be a sanctuary city, with special protections for undocumented immigrants, and Mayor de Blasio recently affirmed that local law enforcement officials will continue to operate consistent with that commitment. If the Deferred Action for Childhood Arrival (DACA) policy is terminated or substantially curtailed and students with DACA status lose the right to work, the University pledges to expand the financial aid and other support we make available to undocumented students, regardless of their immigration status.    It is of the utmost importance that federal policies and laws do not derail the education of students whose enrollment at Columbia and other colleges or universities is made possible by DACA.   We subscribe to the view of the Association of American Universities that “DACA should be upheld, continued and expanded,” and we will continue to express that commitment in the future. To provide additional support, the Office of University Life is hosting a series of small-group, private information sessions specifically for undocumented students in our community, including DACA recipients, to offer support and guidance regarding possible changes in the law.   Affected students can contact the Office directly for more information.   Separately, our International Students and Scholars Office (ISSO) is scheduling information sessions and is prepared to provide assistance via its telephone helplines to any of our international students with questions or concerns.   For more information about resources, support, and reporting options regarding discrimination and harassment, please visit the Office of University Life website. The commitments outlined above emerge from values that define what we stand for and who we are as a University community.   Indeed, Columbia College and the School of Engineering and Applied Science have amplified their commitment to undocumented undergraduate students pursuing their first degrees by continuing to meet their full financial aid needs as has long been our policy and also by treating applications of undocumented students no differently than those of students who are U.S. citizens or permanent residents.   The experience of undocumented students at the College and Columbia Engineering, from the time they first seek admission through their graduation, will not be burdened in any way by their undocumented status. This is a moment for us to bear in mind how important it is to protect all who study and teach in our community and to defend the institution and the values it embodies. Sincerely, John H. Coatsworth Provost

What Is Securitisation And Its Uses Finance Essay - Free Essay Example

Sample details Pages: 7 Words: 2109 Downloads: 9 Date added: 2017/06/26 Category Finance Essay Type Analytical essay Did you like this example? If you think you can go it alone in todays global economy, you are highly mistaken Jack Welch, CEO of General Electric, USA  [1] Securitization is considered one of the most prominent developments in international finance, and is its utility is expected to rise further in the future.  [2]  Securitization has been defined as the process of pooling and repackaging of homogenous illiquid financial assets into marketable securities that can be sold to investors.  [3] The concept of securitization typically offers investors higher quality assets due to the fact that the structure created is insulated from the bankruptcy risk of the Originator. The Special Purpose Vehicle (hereinafter SPV) is one such structure. An SPV, or a special purpose entity (SPE), is a legal entity created by a firm (known as the sponsor or originator) by transferring assets to the SPV, to carry out some specific purpose or circumscribed activity, or a series of such transactions .  [4]  SPVs gained prominence in light of the Enron scandal, where the directors and auditors utilized SPVs to clear the debts off the balance book of Enron.  [5] A SPV is an independent entity, usually created for carrying out a specific project, wherein the SPV purchases assets from the Originator and issues securities against the purchased assets. Such a model provides an investor added security insofar that their investment in the SPV is not subject to any subsequent deterioration in the credit quality of the Originator.  [6]  Moreover, the investment is secured by the assets of the SPV, or in case of a joint venture, a performance amount. During the course of this paper, the researcher shall endeavor to highlight the advantages of SPVs in various transactions, with emphasis on the use of SPVs as an acquisition vehicle and the use of SPVs for joint ventures. The researcher shall first analyze the concept of a SPV, before dealing with specific issues like the use of SPVs as an acquisition vehicle and the use of SPVs by Private Equity firms. SPVs -The Concept A securitization process typically entails a four step process. First, a SPV is created, which holds the title to the assets underlying securities. Second, the assets held by the Originator are purchased by the SPV, which in turn leads to the third step, i.e. the issuance of securities to the investors which are backed by the assets purchased. The fourth step involves the SPV pays the originator for the assets with the proceeds from the sale of securities.  [7] A securitization deal typically involves three parties, namely  [8]   1. The Originator: This is the entity on whose books the assets to be securitised exist. It is the Company that generally owns the receivables. The Company then sells these receivables to a newly formed separate legal entity, which can take the form of a company or a trust. In a true sale, the Originator transfers both the legal and the ben eficial interest in the assets to the SPV.  [9]  This process results in the risks associated with the receivables being separated from the risks associated with the Originator. 2. The SPV: In order to raise funds for the purchase of the receivables, the SPV approaches the capital markets. The SPV would typically buy the assets (to be securitised) from the Originator. The SPV is characteristically a low-capitalised entity with narrowly defined purposes (in order to make it bankruptcy remote) and activities, and usually has independent trustees/directors. An example would be the acquisition of Zain Africa by Bharti, wherein two SPVs were created, which took the loan to finance the transaction, and the advantage of this process being that the loan was not on the books of Bharti.  [10] 3. The Investors: The investors that purchase the securities offered by the SPV can be in the form of individuals, institutional investors, mutual funds, provident funds, insurance companies, etc. These investors purchase a participating interest in the total pool of receivables and receive their payment in the form of interest and principal as per agreed pattern.  [11] A Special purpose entity is a unique form of joint venture or a separate form of legal structure that is created by a company or a firm for a special purpose, for example, isolation of risk or for providing liquidity or to obtain favorable external funding.  [12]  The rationale behind creation of such structures is that many of the infrastructure projects require huge capital investments, specialized technologies, multi-skill and advanced management techniques. The risks involved in such projects are so high that individual entities cannot bear such a huge risk solely on their own and they do not want to burden the existing units with such a risk. Therefore, this leads to the formation of a special structure that enables the firm to successfully complete the project by isolating the risk in such a case.  [13]  The unique feature about a SPV is that they have no other purpose other than the sole transaction or project for which they were created and they can make no substantive decisions, the rules governing them are set down in advance and they carefully circumscribe their activities. In other words, SPVs are single project/purpose entities which are bankruptcy remote, i.e. scope of activities undertaken by the SPV is strictly limited and in most cases, a non-petition agreement is obtained from the creditors.  [14] A Special Purpose Vehicle typically has the following characteristics: They are thinly capitalised; They have no independent management or employees; Their administrative functions are performed by a trustee who follows pre-specified rules with regard to the receipt and distribution of cash and there are no other decisions; The assets held by the SPV are serviced via a servicing agreement. They are structured so that they cannot become ba nkrupt.  [15] A Working Group setup by the Reserve Bank of India (hereinafter RBI) in its report suggested certain features for an ideal SPV  [16]   (a) An SPV must be capable of acquiring, holding and disposing of assets; (b) It would be an entity, which would undertake only the activity of asset securitization and no other activity; (c) An SPV must be bankruptcy remote i.e. the bankruptcy of Originator should not affect the interests of holders of instruments issued by SPV; (d) An SPV must be bankruptcy proof. i.e. it should not be capable of being taken into bankruptcy in the event of any inability to service the securitized paper issued by it. (e) An SPV must have an identity totally distinct from that of its promoters/ sponsors/ constituents/ shareholders. Its creditors cannot obtain satisfaction from them. (f) The investors must have undivided interest in the underlying asset (as distinguished from an interest in the SPV which is a mere conduit). (g) A SPV must be tax neutral i.e. there should be no additional tax liability or double taxation on the transaction on account of the SPV acting as a conduit. (h) A SPV must have the capability of housing multiple securitisation. However, SPV must take precaution to avoid co-mingling of assets of multiple securitisation. In case of transactions involving various kinds of assets, they should restrict the rights of investors to the specific pool. (i) The SPV agreement may not release its employees or trustees from their responsibility for acts of negligence and a wilful misconduct. Thus, the distinctive features of a SPV typically include the fact that such vehicles are utilised for a specific purpose, generally to isolate risk, as the basic principle of structured financings are based on one central, core principle-a defined group of assets can be structurally isolated, and thus serve as the basis of a financing that is independent as a legal matter, from the bankruptcy ris ks of the former owner of the assets.  [17] SPVs in the Indian Context In India, an Originator can create a SPV thorough various means, depending on the nature of transaction to be carried out by the SPV. A SPV can be in the form of any of the following legal entities- company, trust, mutual fund, partnership, etc. The instruments issued by a SPV should however, have the following characteristics  [18]   (a) Be capable of being offered to the public or private placement. (b) Permit free or restricted transferability. (c) Permit issuance of pass through or pay through Securities. (d) Represent the amounts invested and the undivided interest or share in the assets (and should not constitute debt of SPV or the Originator). (e) Be capable of being classified as senior / subordinate by differentiation in ranking of security or in receiving payments. (f) May be issued in bearer form or registered in the holders name, may or may not be endorsable and may be issued in definitive form or book entry form. The researcher shall restrict the scope of this paper to the study and use of a SPV which is in the form of a Company. A Company, typically a private company, is a familiar form of SPV setup to carry out a particular activity/project. The primary reason for the popularity of this model is the fact that a Company offers flexibility vis-à  -vis the nature of securities issued by the SPV. As per the Indian Companies Act, 1956, a private company can be setup with a minimum paid up share capital of Rs. 100,000, with at least two members subscribing to the Memorandum of Association.  [19]  The disclosure requirements for a private company are generally lower as compared to a public company.  [20]  Such a company may issue shares and debentures backed by the assets that have been transferred to the SPV. In case of a SPV-Company being created for an infrastructure project (for example-construction of a bridge), then the model typically utilized is the BOT model, wherein the assets are transferred to the SPV, the SPV carries out the construction work, operates it for an agreed time period and then transfers it to the government which has the rightful title to the project.  [21] Another form or popular model of SPV is a trust company, wherein a company acts as a trustee. The functioning is similar to the functioning of a company established under the Companies Act. SPV as an Acquisition Vehicle SPVs are increasingly being utilized as acquisition vehicles by various companies and private equity firms. For example, in a leveraged buyout by a private equity firm, a typical structure is modeled on the following lines. The private equity firm would setup a shell parent and subsidiary company. The shell companies created for the acquisition had no substantial assets of their own but were required to, as per the acquisition agreement, to use a measure of best efforts to complete the transactions con templated by the agreement. The target company was given assurance as to the availability of finance for the transaction by financial institutions which provided a debt commitment letter.  [22] However, in light of the financial meltdown, a new private equity acquisition structure was created which required the private equity firm to provide a letter of guarantee (generally in non recourse terms) to the target company to pay compensation in the event of the transaction not being completed. In a typical triangular or reverse triangular merger, either a subsidiary or a shell company is created by the acquiring company to take over the target company. The rationale being that post merger, the shell company ceases to exist and only the target company, now a subsidiary of the acquiring company survives the merger. An advantage of this process is that the contracts entered into by the target company, and in many cases the goodwill created by the brand name of the target company su rvives the acquisition. Conclusion During the course of this paper, the researcher has endeavoured to highlight the concept and the advantages of a SPV. The distinctive features of a SPV typically include the fact that such vehicles are utilised for a specific purpose, generally to isolate risk, as the basic principle of structured financings are based on one central, core principle-a defined group of assets can be structurally isolated, and thus serve as the basis of a financing that is independent as a legal matter, from the bankruptcy risks of the former owner of the assets. SPVs are increasingly being used for, inter alia, infrastructure projects, as a mode of acquisition vehicle, due to the various advantages that a SPV provides to the Originator. The concept however, came to light for all the wrong reasons as SPVs were used by Enron executives to hide the debt and clear their balance sheets. Notwithstanding the negative publicity created post Enron, the researcher bel ieves that SPVs today form an integral part of the MA landscape in todays world, and provide a unique and bankruptcy remote way or raising capital. Don’t waste time! Our writers will create an original "What Is Securitisation And Its Uses Finance Essay" essay for you Create order

The Kite Runner by Khaled Hosseini - 1365 Words

The imagery, styles and the concerns used in the novel foreshadows the rape scene that happened in the grand kite tournament of 1975 which sets a cycle of betrayal and redemption into motion, around which the story revolves. The rape scene represents the entire novel; it’s related to Amir’s life as he spends the whole novel dealing with the incident, which affects his entire life. It also symbolises the racism in Afghanistan, and how the country is dealing with such an issue, beauty of the Afghanistan is fading just like Hassan and Amir’s friendship. In the opening chapter, Hosseini hints at the upcoming rape scene, â€Å"Looking back now, I realize I have been peeking into that deserted alley for the last twenty-six years,†1 to generate the reader’s interest without being explicit, and from the time period he mentioned, â€Å"twenty six years,† we get the idea of what affect this incident had on Amir because it has been quite a long time but Amir was unable to forget the incident, as his past kept hunting him and his feeling of guilt kept rising with time. Hosseini uses irony to foreshadow Amir’s disloyalty towards Hassan, when Baba complains to Rahim Khan about Amir, saying, â€Å"A boy who won’t stand up for himself becomes a man who can’t stand up to anything,†2 here Baba points out one of the Amir’s major character flaws i.e. his cowardice- which never let him stood up for himself; he always relies on Hassan to defend him. Amir always wanted to be the best at everythi ng, to gainShow MoreRelatedThe Kite Runner, by Khaled Hosseini883 Words   |  4 Pagesregret from past encounters and usually feel guilty and bitter about the situation. The Kite Runner, by Khaled Hosseini, revolves around the theme of redemption. Redemption can be used as a cure for guilt. Throughout the novel, the author shows that redemption requires some sort of sacrifice and the only way that is possible is if you can forgive yourself from the mistakes you have made in the past. Khaled Hosseini effectively portrays redemption through motifs such as rape, irony and flashbacks, symbolismRead MoreThe Kite Runner By Khaled Hosseini1651 Words   |  7 Pages  Ã‚  Ã‚   The novel â€Å"The Kite Runner† by Khaled Hosseini describes the life of a boy, Amir. Amir’s best friend and brother (although that part isn’t known until towards the end), Hassan, plays a major role in Amir’s life and how he grows up. Hosseini portrays many sacrifices that are made b y Hassan and Amir. Additionally, Amir seeks redemption throughout much of the novel. By using first person point of view, readers are able to connect with Amir and understand his pain and yearning for a way to be redeemedRead MoreThe Kite Runner By Khaled Hosseini1655 Words   |  7 PagesSarah Singer Major Works Data Form Title: The Kite Runner Author: Khaled Hosseini Date of Publication: 2003 Genre: Historical Fiction Historical information about the period of publication: Since the September 11th attacks in 2001, the United States has been at war with Afghanistan. Their goals were to remove the Taliban, track down those in charge of the attacks, and destroy Al-Qaeda. Biographical information about the author: Khaled Hosseini was born in Kabul, Afghanistan, in 1965. HIs motherRead MoreThe Kite Runner by Khaled Hosseini1098 Words   |  5 PagesIn The Kite Runner by Khaled Hosseini, we learn a lot about Amir the main character, and Hassan his servant/brother. In the beginning Hassan and Amir’s relationship was one of brotherly love despite the fact that Hassan was a Hazara and Amir a Pashtun. Back in the 1970’s race and religion played a big part in Kabul and these two races were not suppose to have relationships unless it was owner (Pashtun) and servant (Hazara). Baba Amir’s father had an affair with Hassan’s mother, but it was kept aRead MoreThe Kite Runner by Khaled Hosseini1313 Words   |  5 Pagesis not unique to just J.K. Rowling. Khaled Hosseini also incorporates life experiences into some of his novels. A prime example of this is The Kite Runner. The storyline of this novel reflects his past to create a journey of a young Afghanistan boy, whose name is Amir. This boy changes drastically throughout his lifetime from a close minded, considerably arrogant boy to an open hearted and minded man. This emotional and mental trip is partially based on Khaled Hosseini’s own life. Throughout Hosseini’sRead MoreThe Kite Runner By Khaled Hosseini1908 Words   |  8 Pages​In the novel, â€Å"The Kite Runner†, written by Khaled Hosseini, was taken place in Afghanistan during the 1970’s to the year of 2002. Many historical events happened during this time period and Hosseini portrayed it into his novel. Kabul, the capitol of Afghanistan, was a free, living area for many Afghanistan families to enjoy the life they were given. Until one day, Afghanistan was then taken over and attacked. In the novel, Amir, the protagonist, must redeem himself and the history behind his actionsRead MoreThe Kite Runner By Khaled Hosseini1050 Words   |  5 Pagesâ€Å"There is a way to be good again.† (Hosseini 334). This quote given by Rahim Khan to Amir holds a great amount of force and symbolism. In theory, this quote symbolizes the beginning of Amir’s path to redemption. The eye-opening Kite Runner by Khaled Hosseini tells about the struggles of Afghanistan before and during the Taliban, and one’s struggle for redemption and acceptance. With regards to the opening quote, some see Amir’s actions as selfish. However, others may believe that Amir truly changedRead MoreThe Kite Runner By Khaled Hosseini1583 Words   |  7 Pagesnovel the Kite Runner by Khaled Hosseini, Amir, the main character, shares his thoughts and actions due to his poor decisions. The problems he encountered were all because of the sin committed in his youth. His sins taunted the beginning of his life and gave him a troublesome memory full of guilt. As the novel continued, Amir attempted to disengage the memory of his sin and forget about it. Amir then faced the long bumpy road to redemption. Khaled Hosseini’s novel the Kite Runner is about sinRead MoreThe Kite Runner, by Khaled Hosseini871 Words   |  4 Pagesthat person is trying to fix that mistake. This also applies to the novel The Kite Runner. The story revolves around the main character Amir, and his childhood friend, Hassan. After Amir came to America with Baba, his father, he still regrets the things he had done to his childhood friend. He left Hassan getting raped by Assef in a small alley in 1975. Thereafter, Amir always feel regret and seeks for redemption. Hosseini -the author, argues that redemption can be achieved by helping others, teachRead MoreThe Kite Runner By Khaled Hosseini3402 Words   |  14 Pagestitle â€Å"The Kite Runner† is symbolic as fighting kites and the kite runnings are impacting moments in the novel. Hassan was the best kite runner in Kabul, if not the whole country, after Amir won the kite fighting the running of that last blue kite triggered the monumental changes for Amir. For the beginning of the story the kite running was associated with Hassan’s rape and Amir’s grief. As kites appear throughout the story, they begin Amir’s story and also end it. Amir flying the kite with Sohrab

Specific Investment Decisions Free Essays

SPECIFIC INVESTMENT DECISIONS Q1. If a company leases rather than buy an asset, which of the following will not be a benefit to the purchaser? (MCQ)Avoiding Tax exhaustionExploiting a low cost of capital Attract lease customers Potential future scrap(2 marks) Q2. Willow Co has already decided to accept a project and is now considering how to finance the project. We will write a custom essay sample on Specific Investment Decisions or any similar topic only for you Order Now The asset could be leased over three years at a rental of $23,000 per annum, payable at the start of each year. Tax is payable at 25%, one year in arrears. The post-tax cost of borrowing is 8%. Calculate the net present value of the leasing option. (FIB)Years Cash flows ($)0 – 2 Rentals (23,000)2 – 4 Tax relief 5,75041084542545000NOTE: Negative answer should be shown with a negative sign (-)$(2 marks) Q3. Select the correct Lease option based on the statements given. (HA)It is a rental agreement OPERATING FINANCEMaintenance Servicing cost of Lessee OPERATING FINANCEAgreement for the useful life of the asset OPERATING FINANCEIncluded in the balance sheet of the Lessor OPERATING FINANCE(2 marks) Q4. Tango Co. needs to decide about an asset that will be used in a project. The company has an option to either Buy the asset or Lease it. If Tango Co. opts for Buy option the following information is given: The asset is bought using a bank loan for $400,000 for a time period of three years. The scrap value of the asset is $30,000 annual maintenance cost will be $12,000 per annum. Calculate the present value for year two using a cost of borrowing of 5% (ignoring taxation)? (MCQ)$30,000$(11,424)$(10,884)$15,552(2 marks) Q5. What are the relevant cash flows for Buy option? (MRQ)Investment and Disposal proceedsRepair Maintenance costTax allowable depreciationTax saving on Servicing cost(2 marks) Q6. Beamer Co. wants to replace a Dyeing machine on 31st December 2017. The machine is expected to cost $360,000 if purchased immediately, payable on 31st December 2017. After four years company expects technological changes in the market making this machine redundant and leaving a scrap value of $20,000 on 31st December 2021. Capital allowance on 25% reducing balance basis. A full year allowance is given for acquisition but no writing down allowance in the year of disposal. If the maintenance cost is $15,000 per year payable at each year end tax rate is 30%.What will be the Balancing Charge/Allowance? (MCQ)$28,172 Balancing Charge$27,000 Balancing Allowance$11,391 Balancing Charge$28,172 Balancing Allowance(2 marks) Q7. Putin Co has decided to invest in a new machine which has a ten-year life and no disposal proceeds. The machine can either be purchased now for $55,000, or it can be leased for ten years with lease rental payments of $10,000 per annum payable at the end of each year. The cost of capital to be applied is 11% and taxation should be ignored. What should be done? (MCQ)Purchase the machineLease the machineSale or LeasebackDo nothing(2 marks) Q8. A machine is leased using operating lease the annual lease rental for six years will be $67,000 payable at each year-end. The first rental will be payable at the start of year one. Calculate net present value using a cost of capital of 13%? (FIB) 3816353683000$(2 marks) Q9. A machine is leased using finance lease the annual lease rental for three years will be $95,000 payable at each year-end. The first rental will be payable at end of year zero in advance. The maintenance cost is $10,000 per annum for three years. Calculate net cash flow for year two using tax save rate of 30% recording in the year cash flow arises? (MCQ)$(66,500)$(73,500)$(7,000)$28,500(2 marks) Q10. â€Å"Assets with unequal lives cannot be compared to a comparison will not be like with like†. Which of the following option relates to the above statement? (MCQ)Equivalent annual costProfitability indexAsset Replacement decisionProbability analysis (2 marks) Q11. Project A with an NPV of $4m with six-year duration. Project B with an NPV of $5m with seven-year duration. Project C with NPV of $6m with a three-year duration. Cost of capital is 12%. Which of the following will be ranked second? (MCQ)Project AProject BProject CNone of the above(2 marks) Q12. The net present value of the costs of operating a machine for the next three years is $10,437 at a cost of capital of 16%. What is the equivalent annual cost of operating the machine? (FIB)4114806477000$ (2 marks) Q13. KD Co. is deciding to replace cargo planes every year or every two years. The initial cost of the plane is $200,000. The maintenance charges are as follows: First year it’s Nil ; $25,000 at the end of the second year. The second-hand value would fall from $110,000 to $90,000 if it held on the plane for two years instead of a one year. KD Co. cost of capital is 4%. How often should KD Co. replace their cargo planes % what will be the equivalent annual cost of the option they choose? (MCQ)Replace every 1 year $(94,180)Replace every 1 year $(97,900)Replace every 2 years $(139,875)Replace every 2 years $(48,450)(2 marks) Q14. Which of the following statements is/are a limitation for Asset Replacement Decision? (MRQ)Replacement made every time is better than the previous assetAssets replaced have same cash inflows every yearAssumed that Machines replaced have different operational efficiencies than the previous assetIt ignores environmental damage(2 marks) Q15. Capital Rationing is the restriction on organizations ability to invest in all projects due to insufficient funds. Select the relevant statements whether they are true or false. (HA)Hard Capital Rationing is the limit on the amount of finance available imposed by the lending institutions TRUE FALSESoft Capital Rationing is the limit on the amount of finance available imposed by the lending institutions TRUE FALSEProfitability index is a solution applicable to divisible projects only TRUE FALSETrial ; Error method is the solution applicable to divisible projects only TRUE FALSE(2 marks) Q16. Riddle Co. is appraising three investment projects but is experiencing a capital rationing in Year 0. No capital rationing is expected in future, but all the projects are important for the company and cannot be delayed ; a decision needs to be taken. Riddle Co. cost of capital is 6%. Which order should the projects to be ranked? The following information is available: (MCQ)Project The outlay in year 0 ($) Present Value ($) Net Present Value ($)Jeremy 115,000 121,900 12,190James 43,000 45,580 13,674Richard 75,000 79,500 47,700Jeremy, Richard, JamesJames, Jeremy, RichardRichard, James, JeremyJeremy, James, Richard (2 marks) Q17. What is an indivisible project?It is the ratio of the NPV of a project to its investment costIt is the project that must be undertaken completely or not at allIt is the project that must be undertaken completely or partiallyIt is the project restriction due to insufficient funds(2 marks)The following information relates to Q18 ; Q19.Schneider Co. is facing a capital constraint of $150m immediately available for investment. The investments in possible projects are: Project Initial Cost ($m) NPV ($m)W 30 7X 70 12Y 60 12Z 40 16 Q18. If the projects are divisible, what is the NPV generated from the optimum investment programme? (FIB)35115524765 00 $ Million(2 marks) Q19. If the projects are indivisible, what is the NPV generated from the optimum investment programme? (MCQ)$19m$24m$28m$35m(2 marks) Q20. Place the calculation steps of Profitability index in the correct order. (P;D)Monitor the investment made in the project 1Calculate profitability index of each project 2Allocate the funds 3Rank the project 4(2 marks)SPECIFIC INVESTMENT DECISIONS (ANSWERS) Q1. AAvoiding tax exhaustion is a benefit for lessee rather than the purchaser. Tax exhaustion is when a business has negative taxable income so cannot benefit from tax saving.Exploiting a low cost of capital is a benefit for the purchaserAttracting lease customers is a benefit to a lessorPotential future scrap is a benefit for the purchaser as the lessee is not entitled to future scrap proceeds Q2. $-50,289Years Cash flows ($) Discount Factor (8%) Present value ($)0 – 2 Rentals (23,000) 1 + 1.783 (64,009)2 – 4 Tax relief 5,750 3.312 – 0.926 13,720NPV (50,289) Q3. CIt is a rental agreement OPERATING Maintenance ; Servicing cost of Lessee FINANCEAgreement for the useful life of the asset FINANCEIncluded in the balance sheet of the Lessor OPERATING Q4. Year 0 1 2 3Investment / Scrap value (400,000) 30,000Maintenance (12,000) (12,000) (12,000)Net Cash flow (400,000) (12,000) (12,000) 18,000DF 5% 1 0.952 0.907 0.864Present value (400,000) (11,424) (10,884) 15,552 Q5. All cash flows are relevant for Buy option Q6. DYear 2017 2018 2019 2020 2021 2022Investment / Scrap value (360,000) 20,000 Tax save 27,000 20.250 15,188 11,391 28,172Workings:2017 (360,000 Ãâ€" 25%) = 90,000 Ãâ€" 30% = 27,0002018 (90,000 Ãâ€" 0.75) = 67,500 Ãâ€" 30% = 20,2502019 (67,500 Ãâ€" 0.75) = 50,625 Ãâ€" 30% = 15,1882020 (50,625 Ãâ€" 0.75) = 37,969 Ãâ€" 30% = 11,391Balancing Allowance (113,906 – 20,000) = $ 28,172 Q7. APresent value of leasing costs PV = Annuity factor at 11% for 10 years Ãâ€" $10,000 = 5.889 Ãâ€" $10,000 = $58,890 If the machine was purchased now, it would cost $55,000. The purchase is therefore the least-cost financing option, hence choosing the purchase option. Q8. $ – 267,866$67,000 Ãâ€" 3.998 (annuity factor for 6 years) = $ – 267,866 Q9. BYear 0 1 2 3Lease rentals (95,000) (95,000) (95,000) Maintenance (10,000) (10,000) (10,000)Tax save 30% (LR) 28,500 28,500 28,500 (M) 3,000 3,000 3,000Net cash flow (66,500) (73,500) (73,500) (7000) Q10. CEquivalent annual cost is method of converting asset lives to be like with likeProfitability index is the method to overcome capital rationingAsset Replacement decision is correctProbability analysis is method under risk ; uncertainty Q11. BProject A = $4 à · 4.111 (AF 6 years) = $0.973mProject B = $5 à · 4.564 (AF 7 years) = $1.096mProject C = $6 à · 2.402 (AF 3 years) = $2.498m Q12. $4,647EAC = $10,437 à · 2.246 (AF 3 years) = $4,647 Q13. DYear 1 Year Cash flow ($) DF (4%) PV ($)0 (200,000) 1 (200,000)1 110,000 0.962 105,820NPV (94,180)EAC = 94,180 à · 0.962 = 97,900Year 2 Year Cash flow ($) DF (4%) PV ($)0 (200,000) 1 (200,000)1 – 0.962 -2 (25,000) + 90,000 0.925 60,125NPV (139,875)EAC = 139,875 à · 2.887 = 48,450 Q14. Assets replaced have same cash inflows every year ; it ignores environmental damageReplacement made every time is like with likeAssets replaced have same cash inflows every year (limitation)Assumed that Machines replaced have same operational efficiencies like the previous assetIt ignores environmental damage, It ignores non-financial aspects (limitation) Q15.Hard Capital Rationing is the limit on the amount of finance available imposed by the lending institutions TRUE Soft Capital Rationing is the limit on the amount of finance available imposed by the lending institutions FALSE Profitability index is a solution applicable to divisible projects only TRUE Trial ; Error method is the solution applicable to divisible projects onlyFALSESoft Capital Rationing is the limit on the amount of finance available imposed by the company itself.Trial ; Error method is the solution applicable to indivisible projects only Q16. D. Jeremy, James, RichardProject The outlay in year 0 ($) Present Value($) Net Present Value ($) Profitability IndexJeremy 115,000 121,900 12,190 0.1James 43,000 45,580 13,674 0.3Richard 75,000 79,500 47,700 0.6Jeremy = (12,190 à · 121,900) = 0.1James = (13,674 à · 45,580) = 0.3Richard = (47,700 à · 79,500) = 0.6 Q17. BIt is the ratio of the NPV of a project to its investment cost (Profitability index)It is the project that must be undertaken completely or not at all (Indivisible project)It is the project that must be undertaken completely or partially (Divisible project) It is the project restriction due to insufficient funds (Capital rationing) Q18. $38.4mProject Profitability Index Ranking Investment ($) NPV ($)W ( 7 à · 30) = 0.23 2 30 Ãâ€"0.23 7X ( 12 à · 70) = 0.17 4 20 Ãâ€" 0.17 3.4Y ( 12 à · 60) = 0.2 3 60 Ãâ€" 0.2 12Z ( 16 à · 40) = 0.4 1 40 Ãâ€" 0.4 16Total 150 38.4 Q19. DCombination:W + X Cost $100m NPV $19mW + Y + Z Cost $130m NPV $35mX + Y Cost $130m NPV $24mX + Z Cost $110m NPV $28mY + Z Cost $100m NPV $28m Q20. Monitor the investment made in the project 4Calculate profitability index of each project 1Allocate the funds 3Rank the project 2 How to cite Specific Investment Decisions, Papers

The House of Dies Drear free essay sample

Also, in chapter 19, which is also the end of the book, Virginia Hamilton used another cliffhanger, which led us to the next book, The Mystery of Drear House. That way, it will give people the motive to read on to the next book and make the readers eager to read the next book. Metaphor revealed through out the book, such as: The stream in the moat. The covered planks are the drawbridges, Thomas thought. And the house of Dies Drear is the castle. In this case, the house of Dies Drear is being compared to a castle, it gives us a mysterious mood, and the impetus can make the story more interesting than just saying everything straightforward. Virginia Hamilton used the plot structure/plot diagram in her book. Beginning, rising action, climax, falling action and ending. The beginning of the story is when the Smalls moved in, rising action in when they knew about the backgrounds of the house and Pluto. We will write a custom essay sample on The House of Dies Drear or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Climax is when they had their revenge on the Darrows. The falling action shall be the sequel of The House of Dies Drear. I find this very interesting because Virginia Hamilton wrote The Mystery of Drear House also, but she started working on it 18 years after the first book was published. The sequel was about what happened after, and explained most parts of the mystery in the first book. She, herself also said that â€Å"I began it by looking for an opening, something I hadn’t done in the first book. ‘ What did I miss doing in Dies Drear? ’ I asked myself. ‘Is there anything I left out I can pick up in the second book? ’† Throughout the second book, she mostly solved all the mysteries in the first book, which acted as a falling action and the ending. Not a lot of authors decide to put the ending in a separate book. In addition to this, the writer uses some stylistic effects to make the story interesting to read. Such as descriptive words and allusion. In the book, Virginia Hamilton used a lot of descriptive words to make the book more interesting. Such as Onomatopoeias, the word hissed around them, stopping Mr. Small’s forward movement. It can make the readers have a vivid image in their mind, to make it more realistic through out sounds and word descriptions. Also, allusions can make people relate to the history and understand what something means. Such as Pluto’s name, was from the Roman god of death. This allusion gives the readers a creep thought about Pluto and they can relate it both to what Pluto have done in the book and to his name’s meaning. To conclude, I think that The House of Dies Drear is effective because of its form, mystery and historical fiction, which made the book more interesting. The normal structure of plot but broke in to 2 pieces. Last the use of words and allusion in the book made it very successful.