...Chapter 12 Cash Flow Estimation and Risk Analysis LEARNING OBJECTIVES After reading this chapter, students should be able to: • Discuss difficulties and relevant considerations in estimating net cash flows, and explain the four major ways that project cash flow differs from accounting income. • Define the following terms: relevant cash flow, incremental cash flow, sunk cost, opportunity cost, externalities, and cannibalization. • Identify the three categories to which incremental cash flows can be classified. • Analyze an expansion project and make a decision whether the project should be accepted on the basis of standard capital budgeting techniques. • Explain three reasons why corporate risk is important even if a firm’s stockholders are well diversified. • Identify two reasons why stand-alone risk is important. • Demonstrate sensitivity and scenario analyses and explain Monte Carlo simulation. • Discuss the two methods used to incorporate risk into capital budgeting decisions. • List four different types of embedded real options, explain what a decision tree is, and provide an example of one. • List the steps a firm goes through when establishing its optimal capital budget in practice. LECTURE SUGGESTIONS This chapter develops procedures for estimating and identifying relevant cash flows, discusses techniques used to measure and take account of project risk, introduces the concept of real options, and discusses general...
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...Video Analysis: Geraldo’s Brazil The video, titled “Geraldo’s Brazil”, examines the effects of globalization through the story of Geraldo Da Souza, a worker at Ford in Sao Paolo, Brazil. Kevin Tynan, an analyst at the Argus Research Corporation, explains to Geraldo that Ford is losing money worldwide. “The number one driving factor for everybody that puts on their Ford tie in the morning is what is the share price and what can we do to increase the share price”. However, this doesn’t make a lot of sense to Geraldo. His friend Bulldog didn’t get his job back, and then his wife left him and he’s still unemployed. It’s true, though, that Ford’s problems don’t just affect Brazil. A Ford plant at Edison, New Jersey is closing too, and the workers there aren’t happy either. “A lot of the morale around here is/has been kind of flushed down the toilet with no profit-sharing and with, you know, they’re saying our plant is going to close down and people aren’t excited to come to work, and people don’t really want to go the extra mile that a normal employee would when the company stands behind them”. In the video, Geraldo also meets a worker at the Peugeot Citroën plant near Paris. A union activist tells him that global solidarity can help workers in Brazil: “Peugeot employees in Brazil need to be able to benefit from the same advantages we have in France. And I think this will happen through global committees”. Brazil’s President, Lula da Silva, tells Gerardo that capital has become...
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...Haider Qazi ENGL 1302 Mr. Watson 01/29/2015 Rhetorical Analysis of Malala Yousazai’s Speech Shot in the head by the Taliban simply for peregrinating to school , Malala Yousafzai has not only recuperated from appalling injuries, but has gone on to become a champion for the rights of children everywhere to be edified. Today, afore the UN Full general Amassing , Malala distributed a distribution of substance, exponent , and grace. This language deserves to be auricularly discerned. This verbalization communication deserves to be read. This verbalization deserves to learn. Both for its incredible message, and for the incredible public-verbalizing adeptness of this XVI year old girl. The first challenge any verbalizer faces is to establish their...
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...development effort?” Ladies and Gentlemen good afternoon. I am not here to brag about what our government, what any administration or what our Armed Forces has done, so far, to achieve peace and development in the country. I would not throw you any unnecessary info nor will I be presenting to you thorough analysis of data based on comprehensive research. But, instead, I’m simply gonna tell you how ROTC has changed my views and how these views, in my own personal opinion, can help in our search for an ultimate peace and a satisfactory socio-economic development status. The question at hand is “How can ROTC help in the peace and development efforts,” but, should we not be asking WHAT? What we, the youth, whether we be cadets or just ordinary students, can do to contribute to this national undertaking. From my learnings as a cadet... let me suggest three Steps: First BE AWARE. Second BELIEVE. And Third ACT. From here we can derive our roles as the future leaders of this nation. It might be a cliché, but let me say again that WE ARE THE HOPE OF THE MOTHERLAND. In our hands lies the future of our country. It is for this reason that institutions of higher learning were established (for us) in the belief that knowledge can save us all. But mere knowledge is never enough for a person to achieve his goals because his CHARACTER – the way he interacts with his surroundings, his perspective, his beliefs and stand on individual matters, the way he performs his tasks and even his...
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...development effort?” Ladies and Gentlemen good afternoon. I am not here to brag about what our government, what any administration or what our Armed Forces has done, so far, to achieve peace and development in the country. I would not throw you any unnecessary info nor will I be presenting to you thorough analysis of data based on comprehensive research. But, instead, I’m simply gonna tell you how ROTC has changed my views and how these views, in my own personal opinion, can help in our search for an ultimate peace and a satisfactory socioeconomic development status. The question at hand is “How can ROTC help in the peace and development efforts,” but, should we not be asking WHAT? What we, the youth, whether we be cadets or just ordinary students, can do to contribute to this national undertaking. From my learning's as a cadet... let me suggest three Steps: First BE AWARE. Second BELIEVE. And Third ACT. From here we can derive our roles as the future leaders of this nation. It might be a cliche, but let me say again that WE ARE THE HOPE OF THE MOTHERLAND. In our hands lies the future of our country. It is for this reason that institutions of higher learning were established (for us) in the belief that knowledge can save us all. But mere knowledge is never enough for a person to achieve his goals because his CHARACTER – the way he interacts with his surroundings, his perspective, his beliefs and stand on individual matters, the way he performs his tasks and even his...
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...Hi Dr. Parkinson, I am very happy for I have passed on my oral comprehensive exam, there is so much I have to thank MTSU. A month away from my graduation, I look back at what seemed to be a nearly impossible endeavor, and I cannot help thinking that I will only succeed because of the diligent support I received from you, from the school of music, and from my professors. My experience here has empowered me to be a better musician and a better teacher, but even more, it inspired me to become a better individual, to pursue constant improvement, and to do not settle for anything less than excellence. At MTSU I have witnessed the transformative power of education in action in my own life. I am writing this letter simply to recognize the people...
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...THE ENLIGHTENMENT AND ITS DISCONTENTS Antinomies of Christianity, Islam and the calculative sciences In my point of view, the main concern of this paper is about the role of ideology in retarding or advancing the Enlightenment project. Which the ideologies itself in this case are Christianity, Islam, and accounting as a calculative science because each constitute a social ideology where they are systems of belief that inform conduct in everyday life. And what is Enlightenment itself? From the explanation of Kant, “Enlightenment is the liberation of man from his self-caused state of minority. Minority is incapacity of using one understands without the direction of another. This state of minority is self-caused when its source lies not in a lack of understanding but in a lack of determination and courage to use it without the assistance of another. Dare to use your own understanding.” From the Christian dialectic, human Enlightenment decline. It is characterized by the existence of a war against the accumulation of wealth, which is considered as an obstacle to the development of capitalism. In catholic paternalism, it is seen the pressure internally and externally. Internally, there was hypocrisy of economic in the body of the Church, where they prohibit lending practices and interest rates, but the Church itself there is excess wealth. Externally, the secularization of Church function in the form of God monarchy or God monopoly, faced with land acquisition monarchy that...
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...ITT-Technical University Rhetorical Analysis of Dr. Martin Luther Kings “I Have A Dream” (Revised) Introduction On August 28th 1963, on the steps of the Lincoln Memorial in Washington DC, Dr. Martin Luther King Jr. gave the “I Have a Dream” speech which was addressed to not only the 200,000 white and black Americans but people all around the world. The “I Have A Dream” speech has been considered one of the most greatest and powerful speeches in history. Why was it given? Simply to rectify that all me were created equal despite their race or color. In this Analysis I will be explaining some literary terms he used as strategies in his speech, and also explain how Dr. King used two rhetorical patterns to help him support his argument, those two patters are Ethos, & Pathos. Strategies Dr. King used many literary terms in the “I Have a Dream” speech such as Alliteration, which is the repetition of sounds. For example he says, “I have a dream that my four little children will one day live in a nation where they will not be judged by the color of their skin but by the content of their character.” The “c” in those three words of that sentence gives it a repetitive rhythm feel which will make that important part of the speech catch and memorable. Also from that same sentence he used Anaphora, which describes the most famous part of the speech, where in this case is “I Have a Dream”. Although he used it many times just buy naming this speech “I Have a Dream” it will make everything...
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...An Analysis of "Is Jesus the Only Savior?" By: Ronald H. Nash By: Gregory Baize, Sr. Student #23344343 May 9, 2012 THEO 313-D03 Prof. Chuck Tabor An Analysis of "Is Jesus the Only Savior?" Part II Inclusivism Nash started his work with an in depth analysis of pluralism, the beliefs and arguments developing his thesis as well as developing a strong case against pluralism. Now in the second part of the book “Is Jesus the Only Savior?” Nash leads us in a study of inclusivism. Defined as or the belief that “The work of Jesus is ontologically necessary for salvation (in other words no one would be saved without it) Nash indicates not epistemologically necessary (in other words a person need not be aware of the work in order to benefit from it).” [1] One must keep in mind that Exclusivism is in disagreement with any second proposition. Strength of his Argument As you read through Nash’s work you find that Nash quotes a number of Inclusivists extensively. He also notes that one has sufficient evidence of their view points and the many arguments made by their own writings. This author displays great integrity in that he identifies even the elements of disagreement between inclusivists. Those of the Inclusivists thought believe that a general revelation is sufficient to bring an individual unto salvation. As Nash began to look into scripture he found Romans chapters 1-3 supported his ideology that a person’s broad revelation is not quite...
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...field of culture and personality, discovered the theory of Functionalism, which gave an absolute meaning and a sanctimonious value to the generic term woman’s role. I disagree with their theory of woman existing only for their analysis of sex-roles in the social structure of the United States because it contemplates no alternative for a woman other than the role of a housewife. When Betty Friedan wrote this novel on the Feminine Mystique it was in the 1950’s when woman were looked upon much differently then they are now. The Feminine Mystique was actually one start to the woman’s right movement and motivated woman nation wide to stand up for their freedom. Women were automatically given this image of a housewife in this time period and felt imprisoned, as if they had no other choice. Women sought for absolute equality between sexes and freedom to start any career they dreamt of. It is amazing how differently human beings thought of each other just a little over 50 years ago. Today people would never even consider a women’s only role to be a housewife. Women today accomplish just as much as men do and have practically the exact same careers equivalent to men. I find it hard to believe that functionalism was even believed to be a possible theory for woman just because they have so much more respect and freedom today then they did when The Feminine Mystique was...
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...the years. The high and low moments are connected at least in some way to the company’s strengths and weaknesses of the company. Before I review the company’s strengths and weaknesses I want to give a little back ground of the company that is Ruby Tuesday. The first Ruby Tuesday restaurant was built in 1972. The first location was in Tennessee, but today there are over 800 Ruby Tuesday restaurants around the world. The chain of Ruby Tuesday restaurants serves American food in a casual dining environment perfect for family and business events. Matching this environment with a higher end looking restaurant sounds like a model for success, or is it? In the following passages I will inform you about the strengths, and weaknesses of Ruby Tuesday. I will also explain how they could utilize their strengths, and minimize their weaknesses more efficiently. Ruby Tuesday: Strengths First I will start off with the positive side of the story. Ruby Tuesday has many strengths as a restaurant. One of the first strengths that stand out about Ruby Tuesday is the food. The restaurants serve American food, which many people in America tend to like to eat. There are quite a few restaurants in this same category across America today, yet somehow Ruby Tuesday seems to stand apart from the rest. The food that they serve plays a few parts in this, some of which I will discuss later as they are weaknesses for the company as well as strengths. Ruby Tuesday has an extensive menu that covers everything...
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...The growth in use of Apple App store has been phenomenal, increasing by several billions of downloads in 2010. Meanwhile other handset manufacturers are achieving success with apps, although Apple still has over two thirds of the market by download. See my post about mobile app strategy which summarises the growth and the options of app strategy. Do you have an app strategy? 5 options for reaching and engaging your audience through mobile applications I’m currently updating my books on the latest developments and thinking through the options companies have for their mobile app strategy. This is where I’ve got to. I’d be grateful for your opinions, particularly if you have experience of what works and what doesn’t as a specialist consultant on mobile apps or if you are using apps within your business. The growth in popularity of mobile apps For me, the growth in popularity of apps for the iPhone has been amazing with Apple announcing in January 2010 that 3 billion apps had been downloaded in the 18 months following the launch of the AppStore. Growth has been maintained through 2010: Growth in download from Apple App Store 2010. Source: IphoneDev The figures in the chart above from iPhoneDev are compiled a summary of the growth based on official figures from the Apple App Store and showed these fascinating characteristics of Apps from the App Store in June 2010: * Number of apps downloaded per month = 500M * The number iOS users = 100 Million * Average number...
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...External Environment ICO Ford Motor Corp The increase in global warming is affecting everyone: from the farmer, entrepreneur, small business owner, and large corporations, to the consumers. It is up to the larger corporations to help lead the way in handling the sustainability issues we are facing globally. The concept of sustainability argues that a firm’s ability to continuously renew itself for long-term success and survival is dependent not only upon the greater economic and social system of which it is a part, but also upon the natural ecosystem in which the firm is embedded. (Wheelen & Hunger, 2012, p. 99) Ford Motor Company takes this role very seriously in identifying and implementing solutions to help preserve the world’s delicate resources. According to the Environmental Protection Agency (EPA), Carbon dioxide makes up for 82% of the U.S. Green Gas Emissions in 2013. The EPA has strict regulations and standards regarding how much CO2 emissions automobiles can eliminate. California has also been granted a Clean Air Act waiver. This allows California to implement its own emission standards (EPA, 2015). In Europe, they have a similar government agency called, the European Environment Agency (EAA). Ford Motors has to adapt with the increasing pressures from various government entities to produce fuel-efficient vehicles that have less impact on the carbon footprint. Ford Motors has introduced electric, hybrid, eco-boost, diesel, and flex-fuel options to their...
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...GOOD EVENING I’M HERE TONIGHT TO TALK ABOUT CAPITALISM. I’M HERE BECAUSE A FEW WEEKS AGO I SAT ON A PANEL AT CBS ASSESSING STUDENTS WHO HAD APPLIED FOR OVERSEAS INTERNSHIPS I EXPECTED TO MEET DENMARK’S NEXT GENERATION OF BUSINESS LEADERS INSTEAD I MET DENMARK’S NEXT GENERATION OF NGO OFFICERS, CHARITY WORKERS AND UNITED NATIONS BUREAUCRATS. ONE STUDENT AFTER ANOTHER TOLD ME HOW THEY HAD NO INTEREST IN A CAREER IN BUSINESS. HOW BUSINESS PEOPLE ARE ONLY INTERESTED IN MONEY. IT WAS AS IF CAPITALISM WAS SYNONYMOUS WITH EXPLOITING THE POOR, PUTTING CHILDREN TO WORK IN FACTORIES, DESTROYING THE ENVIRONMENT. IT WAS AS IF YOUR SCHOOL HAD BEEN POISONED, THAT A COLLECTIVE GROUPTHINK HAD TAKEN HOLD AND IT HAD BECOME IMPOSSIBLE TO STAND UP FOR THE MARKET ECONOMY WITHOUT LOSING ALL YOUR FRIENDS. THAT’S WHY I’M HERE. I ASKED TO BE HERE. TO STAND UP FOR THE MARKET ECONOMY. FOR CAPITALISM. AND FOR LIBERTY – WHICH IS WHAT MAKES IT ALL TICK. LADIES AND GENTLEMEN THE MARKET ECONOMY IS MANKIND’S GREATEST ACHIEVEMENT DARWIN’S THEORY OF EVOLUTION WAS GOOD. EINSTEIN’S THEORY OF RELATIVITY WAS QUITE IMPRESSIVE. THE LUNAR LANDINGS DESERVE A MENTION. BUT CAPITALISM IS A MIRACLE. WE HAVE INVENTED A MAGICAL SYSTEM THAT ALL BY ITSELF GENERATES PROSPERITY AND MAKES EVERYBODY RICHER. CAPITALISM IS A FORCE FOR GOOD NOT BECAUSE IT MAKES THE RICH RICHER – ALTHOUGH IT DOES - BUT BECAUSE IT LIFTS THE POOR OUT OF POVERTY. THE BIG WINNERS FROM CAPITALISM – THE JACKPOT LOTTERY WINNERS – ARE...
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...after Neil H. Borden published his 1964 article, The Concept of the Marketing Mix. Borden began using the term in his teaching in the late 1940's after James Culliton had described the marketing manager as a "mixer of ingredients". The ingredients in Borden's marketing mix included product planning, pricing, branding, distribution channels, personal selling, advertising, promotions, packaging, display, servicing, physical handling, and fact finding and analysis. E. Jerome McCarthy later grouped these ingredients into the four categories that today are known as the 4 P's of marketing, depicted below: The Marketing Mix These four P's are the parameters that the marketing manager can control, subject to the internal and external constraints of the marketing environment. The goal is to make decisions that center the four P's on the customers in the target market in order to create perceived value and generate a positive response. Product Decisions The term "product" refers to tangible, physical products as well as services. Here are some examples of the product decisions to be made: • Brand name • Functionality • Styling • Quality • Safety • Packaging • Repairs and Support • Warranty • Accessories and services Price Decisions Some examples of pricing decisions to be made include: • Pricing strategy (skim, penetration, etc.) • Suggested retail price • Volume discounts and wholesale pricing • Cash and early payment discounts • Seasonal pricing • Bundling • Price...
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