...EGT1 – TASK GUIDE INTRODUCTION: As you work on each of the Tasks please make use of the various resources posted and updated within the Business Undergraduate Economics Learning Community Task 1 Recorded Webinar TASK 1: MARGINAL ANALYSIS This Task centers on the competency of marginal analysis with two structured objectives. First is the requirement to describe the relationship between marginal revenue (MR) and marginal cost (MC) at the point of profit maximization. Second is the requirement to explain the concept of profit maximization. ACTIONS OF APPROACH: 1- Prior to turning in the Task, consider attending a Live Webinar on the Task. Students that attend are much more likely to pass the Task. You can always find an updated schedule of Live Webinars in the Community Pages (link at the top of this document). 2- This essay should be relatively short (1-3 pages) and can be written entirely from the concepts discussed within the McConnell e-text. In preparing for this Task you should read Chapters 7-11 of the McConnell e-text, with specific concentration on the information in Chapters 7 & 8. *Chapter 7 "Business and the Costs of Production" *Chapter 8 "Pure Competition in the Short Run" Chapter 9 "Pure Competition in the Long Run" Chapter 10 "Pure Monopoly" Chapter 11 "Monopolistic Competition and Oligopoly" 3- Formulate your responses to this Task in accordance with an “outline” format. More specifically, when writing your paper – list the Task Element and structure your...
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...or its finances. The major sub-areas of finance are public finance and private finance, the former deals with the managing of finances of the government while the latter deals with the finances of firms, businesses, and individuals (Paramasivan & Subramanian, n.d). 2. Identify and define the three basic forms of business ownership. Describe the advantages and disadvantages of each. According to Michael Spadaccini (2015), the three basic forms of business ownership are the following: first basic form of ownership is the Sole Proprietorship, it is owned by one person under his name he is personally liable for its debts; furthermore this type of business ownership has no separate legal entity from the owner. The advantages are; the business is easy to set up and its operation is controlled by the sole proprietor whom no conflict of interest will arise, however the disadvantage is the owner being the sole owner is personally liable for its debt. The second form is partnership; it is formed by two or more persons who contribute money, property or assets to engage in a business for a profit either by oral or written agreement. The advantages of partnership are each partner act as an agent for the other and manage the business in behalf of each other. While, the disadvantage is since each partner is an agent for the other, each partner is responsible for the actions of other partners. The last basic form of business ownership is Corporation; it is formed by more than three ...
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...Valuation Fundamentals Table of Contents www.finaticsonline.com Table of Contents > > > > > Introduction – Concept of Fair Value – Who uses Valuation? Valuation & Wealth Maximization Valuation Approaches Valuation Methods Is there a ‘Best’ method? > > Which method is best suited ? – Public vs Private Company – By Scenario – By Sector Valuation FAQs – General – DCF – Comparables Press Alt, W, F for maximizing viewing area Equity Valuation Fundamentals Introduction – Concept of Fair Value www.finaticsonline.com At Finatics, we define Equity Valuation as “A process that involves determining „Fair Value‟ of a company‟s equity in order to assist buy/sell decisions for the purpose of Financial or Strategic Investment ” So what is Fair Value of an investment? How should the worth of an Investment be determined ? …(Contd) Put Simply, Fair Value is the price at which, one will get the desired rate of return when the investment is sold to a willing & able buyer. The worth of an investment is determined by whether it is meant for long term use to generate returns (i.e. Strategic Investment) or for resale when the „right price‟ or „fair value‟ is achieved (Financial Investment). The purpose of Valuation is to determine a fair value range of an investment (or capital asset) using one or more of several available techniques As discussed, investment related demand will be driven by expected return resulting...
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...INTRODUCTION Neoclassical economics is a term variously used for approaches to economics focusing on the determination of prices, outputs, and income distributions in markets through supply and demand, often mediated through a hypothesized maximization of utility by income-constrained individuals and of profits by cost-constrained firms employing available information and factors of production, in accordance with rational choice theory. The neo-classical view of economics was under the Type A definition which had to do with the wealth and material welfare. This school of thought was headed by Alfred Marshall in the 18th century, the neo-classical view came to buttress the explanation of the classical view of economics, it gave economics a stand above all other social sciences. According to Alfred Marshall, he defined Economics as the study of mankind in the ordinary business of life.There were other contributions to this view like E.Cannan who said the aim of political economy is the explanation of the general causes on which material welfare of human being depends Beveridge defined it as the study of general methods by which men cooperate to meet their material needs,and also to Pigou he said economics welfare is the subject matter of economic science Neoclassical economics dominates microeconomics, and together with Keynesian economics forms the neoclassical synthesis which dominates mainstream economics today.Although neoclassical economics has gained widespread acceptance...
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...Shareholders and Wealth Maximization V. Sivarama Krishnan, University of Central Oklahoma ABSTRACT This paper attempts reconciliation between the two somewhat extreme views espoused by the shareholder wealth maximization paradigm and the stakeholder theory. The stakeholder theory challenges the basic premise built into corporate finance theory, teaching and practice. Corporate finance theory, teaching and the typically recommended practice are all built on the premise that the primary goal of a corporation should be shareholder wealth value maximization. Extant theoretical and empirical research in financial economics also generally accept shareholder wealth maximization as the normative and ideal goal on which all business decisions should be based. This paradigm assumes that there are no externalities and all the participants engaged in transactions with the firm are voluntary players competing in free, fair and competitive markets. A very different view is offered by what is loosely called stakeholder theory. The stakeholder theory posits that the focus on shareholders and firm value is misplaced and managers should be concerned with all stakeholders of the firm. The paper attempts to address what is felt as a lack of dialogue between the two camps. INTRODUCTION Corporate finance theory, teaching and the typically recommended practice at least in the US are all built on the premise that the primary goal of a corporation should be the maximization of shareholder...
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...business firm have to decide from where they will raise fund, where they will invest and how much of the profit will be distributed among the shareholders. “Finance” Came from Latin word “finis” means “dealing with the money”.finace is called the art and science of managing money. At the micro level, finance is the study of financial planning, asset management and fund raising for business and financial institutions. At the macro level, finance is the study of financial institution and financial markets and how they operate within the financial systems in both the domestic and global economics. Scholar’s view: “Finance consists of providing and utilizing the money, capital rights, credit and funds of any kind which are employed in the operation of an enterprise.” _George R Terry “Finance is concerned with the process, institutionsmarkets and instruments involved in the transfer of money among and between individuals, business and governments”. _Lawrence J Gitman From the above discussion, it can be said that finance is the process of financial planning, identification of sources of fund raising, investment of fund, protection of fund, distribution of profit to achieve the goal of the organization. Question-2: What is business finance? Ans: Generally, finance...
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...strategies as it focuses on stakeholders needs of a business is satisfied. An organization is recognized by their mission; but the company’s mission approaches towards communal responsibility. Every group in a company presents their variable interests and outlook. Through various stages an organization is able to recognize, understand, settle and synchronize the demands for defining their communal responsibility. This particular paper is subjected towards analyzing the operations of ethics and communal responsibility, and their application in developing planning strategies, considering requirements of the stakeholders. Ethics and Social Responsibility In a company ethics can be said as an essential tool used for helping the workers in the company for understanding them the way of conduct in a company environment. This must combine both the standards and the values employed by the organization. When planning strategies are formed in a company, it must specifically focus on the expectations of the company which has been set for the employees focus making them know their way of conduct. By setting up of the values for each and every employee, it should be ascertained that ethics are at the topmost priority (Pearce & Robinson, 2013). In a company values are basically focused by the vision and mission statement that clearly explains the way and opportunities wished to be attained by the company and their stakeholders (Pearce & Robinson, 2013). In most of the company we can...
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...Chapter 1 The Financial Manager and the Firm Learning Objectives 1. Identify the key financial decisions facing the financial manager of any business firm. 2. Identify the basic forms of business organization used in the United States, and review their respective strengths and weaknesses. 3. Describe the typical organization of the financial function in a large corporation. 4. Explain why maximizing the current value of the firm’s stock price is the appropriate goal for management. 5. Discuss how agency conflicts affect the goal of maximizing stockholder wealth. 6. Explain why ethics is an appropriate topic in the study of corporate finance. I. Chapter Outline 1.1 The Role of the Financial Manager A. It’s All about Cash Flows • The financial manager is responsible for making decisions that are in the best interest of the firm’s owners. • A firm generates cash flows by selling the goods and services produced by its productive assets and human capital. After meeting its obligations, the firm can pay the remaining cash, called residual cash flows, to the owners as a cash dividend, or it can keep the money and reinvest the cash in the business. • A firm is unprofitable when it fails to generate sufficient cash flows to pay operating expenses, creditors, and taxes. Firms that are unprofitable over time will be forced into bankruptcy by their creditors. In bankruptcy, the company will be reorganized, or the company’s...
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...outputs True Page: p35 3. One way of creating value by a firm is its “Commerce” activity, which transforms raw material and intermediate products into final products False Page: p35 4. Most of the tools used by top decision-makers in the corporate world are based upon the central assumption of profit maximization True Page: p35 5. There are different ways of measuring a firm’s profitability. Different measures of profitability are likely to result in very different rankings of firm performance True Page: p37 6. Economic profit is a better indicator of a firm’s performance than accounting profit because economic profit includes the cost of remunerating of the capital employed by the firm False Page: p36 7. Time is an important factor in assessing a firm’s performance True Page: p39 8. If time enters into the equation, the maximization of profit equates the maximization of the firm’s value, where this value is equal to the Net Present Value of the firm’s cash flows False Page: p39 9. In practice, valuing firms by discounting economic profits leads to the same result as by discounting the firm’s net cash flows True Page: p40 10. In fact, the value of a firm less its debt does not equal the stock market value of its equity False Page: p40 11. Flexibility is a very important and valuable element in the corporate arena because...
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...Effects of Corporate Social Responsibility in the financial reports:- Contents Abstract- 4 Acknowledgement- 5 Chapter-1 5 Introduction- 5 Background and overview: 6 Scope of the dissertation: 7 Research questions: 8 The aim and the research tasks: 9 Structure of dissertation 10 Chapter-2 11 Literature review: 11 1. Theories on Corporate Social Responsibility: 11 2. Motivation behind Corporate Social Responsibility: 13 3. Financial performance as motivation: 14 4. Relation between CSR and Financial Performances: 16 Theories on CSR: 19 Instrumental theories: 19 Political theories: 19 Integrative theories: 20 Ethical theories: 20 Measurement of Financial Performances: 22 Chapter-3 22 Research Methodology: 22 Introduction 22 Research model and approach 25 Research collection 29 Process of data analysis 33 Chapter-4 34 Analysis 34 Survey questions 34 Focus group discussion 42 Chapter-5 43 Result and findings 43 Implications for practitioners 44 Implications for future research 45 Chapter-6 45 Recommendations and conclusions 45 Appendix-1 49 Questionnaire- 49 Interview questions- 51 Bibliography 52 Abstract- In today’s business world the word, “Corporate Social Responsibility” (CSR) is more than a buzzword to the stakeholders. The concept of CSR is evolving in the business world from decades; however, the actual meaning with its impact is yet to be achieved. The emergence of Corporate Social...
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...| BT Retail | | | M Mwelase | | | Contents 1. Executive Summary……………………………………………………………………………………………1 2. Question 1………………………………………………………………………………………………………….2 3. Question 2………………………………………………………………………………………………………….8 4 .Question 3…………………………………………………………………………………………………….…..9 5. Recommendation…………………………………………………………………………………………….11 6. Conclusion………………………………………………………………………………………………………..12 7. Bibliography……………………………………………………………………………………………………..12 Executive Summary BT Group a world leader in telecommunication started a new division called BT Retail. This division was providing telecommunication solutions to 21 million customers in the UK. Their first CEO, Pierre Danon, instilled a culture that saw the division excel for a number of years. This culture was driven by all top management and its employees in order to realise their set targets. The culture that was adopted by BT Retail was total quality management (TQM) throughout the organisation. This meant that all top management displayed and practised TQM. The author takes us through what is TQM and what are the principles that BT Retail instilled in order to gain customer satisfaction. The following principles were discussed: * Customer Focus * Continuous Improvement * Employee involvement and Empowerment * Systems Thinking. These four pillars made sure that BT Retail was able to reduce the cost of poor quality, through continuous improvement methods and early identification...
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...Corporate Social Responsibility Theories: Mapping the Territory Elisabet Garriga, ` ´ Domenec Mele ABSTRACT. The Corporate Social Responsibility (CSR) field presents not only a landscape of theories but also a proliferation of approaches, which are controversial, complex and unclear. This article tries to clarify the situation, ‘‘mapping the territory’’ by classifying the main CSR theories and related approaches in four groups: (1) instrumental theories, in which the corporation is seen as only an instrument for wealth creation, and its social activities are only a means to achieve economic results; (2) political theories, which concern themselves with the power of corporations in society and a responsible use of this power in the political arena; (3) integrative theories, in which the corporation is focused on the satisfaction of social demands; and (4) ethical theories, based on ethical responsibilities of corporations to society. In practice, each CSR theory presents four dimensions related to Elisabet Garriga is a PhD student in Management at IESE Business School, University of Navarra, Spain. She holds a degree in Philosophy and another in Economics from the University of Barcelona, Spain. She has taught Business Ethics at the University Pompeu Fabra, Barcelona, for the International Education of Students (IES), a consortium comprised of more than 120 leading US colleges and universities. Her current research focuses on the concept and implementation of Corporate Social...
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...Chapter 1 Introduction OBJECTIVES Introduction to the goal of financial management. Competitors to the rule of wealth maximization and their limitations. Factors affecting value creation. Corporate governance around the world. Corporate Financial Management deals with the decisions of a firm related to investment, financing and dividend. To carry on business, a firm invests in tangible assets like plant and machinery, buildings, and intangible assets like goodwill and patents. This comprises the investment decision. These assets don’t come free; one has to pay for them, so a company needs to tap various sources of funds including promoter’s contribution. This forms the financing decision. The investment in assets generates revenues and cash flows for a specific period of time. The managers of the company can either retain cash with the company for further investment or distribute to the owners of the company—the shareholders. This constitutes the dividend decision. In short, a finance manager will be concerned with such financial decisions as: • Which investment/s should the company accept and what are the financial implications of undertaking the same? • How should the company finance those investments? What should be the mix of owners’ contribution— equity and borrowed funds, i.e., debt at any given point in time? • How much of the income generated from operations should be returned to shareholders in the form of dividends and how much is to be retained...
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...Paper Topic: How Companies Could Achieve Sustainable Competitive Advantage Gahn, Philip MACFA, ID# 309601 gahnphil@hs-pforzheim.de Kominek, Lukas MACFA, ID# 300953 komluk@hs-pforzheim.de Wenz, Eugen MACFA, ID# 300636 weneug@hs-pforzheim.de th Submission date: November 2 2013 2 Table of Contents 1 Purpose and Structure ......................................................................................... 5 2 Definition and Origin of Competitive Advantage .............................................. 6 3 Approaches and Methods to Achieve Competitive Advantages......................... 8 3.1 The Traditional Approach According to Porter ........................................... 8 3.1.1 Cost Leadership ................................................................................. 10 3.1.2 Focusing on Priorities ........................................................................ 10 3.2 Modern Approaches .................................................................................. 10 3.2.1 The Strategy as a Compilation of Simple Rules ................................ 11 3.2.2 The Blue Ocean Strategy ................................................................... 12 4 Ways to achieve Sustainable Competitive Advantage...................................... 13 5 Conclusion ........................................................................................................ 15 References .................................
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...5430/wjss.v1n1p20 Abstract This article reviews major theoretical perspectives to US foreign policy as well as on how these theoretical perspectives explain foreign policy decision making and conducting of the US. First, the paper will discuss the process of making foreign policy to sustain US core values and interests which are determined by five major categories of sources (i) the external environment, (ii) the societal environment of the nation, (iii) the governmental setting, (iv) the roles of foreign policymakers, and (v) the individual personalities of foreign policy-making elites (Wittkopf et al 2008, p. 15). Then, the paper will examine the defensive and offensive realism, liberalism, marxism, neoclassical realism, constructivism which can be based on to understand US foreign policy behaviour. It will be concluded that no single theory has the capacity to describe, explain and predict US foreign policy behaviour. A mixture of such theoretical approaches seems to be necessary to obtain a comprehensive picture of US foreign policy. Keywords: US foreign policy, defensive and offensive realism, liberalism, marxism, neoclassical realism, constructivism 1. Introduction This paper aims to examine some of the prominent approaches to US foreign policy which have been put forth by International Relations scholars to explain...
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