Human Growth Hormone Replacement Therapy and Aging Essay - 1

Human Growth Hormone Replacement Therapy and Aging - Essay Example It has truly amazing reparative and restorative powers that can reverse cellular and tissue damage and even help re-grow failing organs† (Life and Mintz, 2004). Science has also always been looking for the proverbial fountain of youth, ever since the roots of modern medical science in alchemy; no one has yet found it. However, it is advisable to take into consideration the pros as well as the cons when discussing the subject of using HGH on humans, and its effects on aging. These effects appear to be positive in the reckoning of the three peer reviewed sources contained in this research study, but with new developments, caution is always urged. Objective: Bowers’ study is interested in determining whether or not growth hormone is effective in creating rapid growth and increasing survival rates in animal testing. This study therefore focuses on a population not of test subjects who are humans, but instead tadpoles. The author wants to determine, based on reactions of selected populations who are treated with growth hormone, whether or not growth hormone increases survival rates in tadpoles. Methodology: The author uses an experimental control test methodology. They arrange a series of petri dishes with five tadpoles in each dish, including a control group which are given distilled water instead of growth hormone. The author uses statistics to then separate and form significance of the data which is empirical. After placing 5 tadpoles into each petri dish with 20mL of HGH, the author sets out to, â€Å"Observe rate of survival and development 24 hours later. I conclude that the Human Growth Hormone concentration of .001% had the highest survival rate with an average of 18.9. The Control of just distilled water had the second highest survival rate with an average of 12.4† (Bowers, 2002). Quantitative methodologies in research like this often supply more empirical results. Conclusions: The

Related Studies Foreign Essay Example for Free

Related Studies Foreign Essay Foreign Langer (Journal 2004 p. 76). The research team identified three types of teachers: 1. Effective teachers in effective schools; 2. Effective teachers in typical schools, and 3. Typical teachers in typical schools. In effective schools, students were â€Å"beating the odds† in test scores, and the effective teachers there found their work encouraged and sustained by a supportive school and district climate that: 1. Coordinates efforts to improve student achievement. 2. Fosters teachers participation in a variety of professional activities. 3. Creates instructional-improvement activities in ways that offer teacher a strong sense of agency. 4. Values commitment to the profession teaching. 5. Engenders caring toward students and colleagues, and 6. Fosters respect for learning as a normal part of life. Furthermore, the assumption in articles dealing with the teacher reflection is that analysis of needs, problems, change processes, feeling of efficacy, beliefs are all factors that contribute to teaches professional development, be it through enhanced cognitions or new or improved practices. Reflection is discussed and used in research in several ways. The studies in this decade centre primarily on reflection as an instrument for change and on the various ways in which reflection can be developed. A group of explicitly considers the contribution to reflection of narrative methods such as story telling (for example, about Professional Development School Experiences) and the construction of stories within professional development activities. (Breault, 2010), (Day and Leitch, 2001), (Doecke et al., 2000) and (Shank, 2006. Set in Lithuania Arl the U.S.A., the Article by Jurasaite-Harbison and Rex (2010) narrate two-year ethnographic study that looks at how teachers in three different types of schools perceive themselves as learners and how their school cultures create opportunities for teachers’ professional development. On the basis of their findings, the authors conclude that the most productive conditions for informal workplace learning is a teacher culture that encourages and values collaborative learning. Evidence shows that professional development has an impact on teachers’ beliefs and behaviors. Evidence also indicates that the relationship between teachers’ beliefs and their practice is not straightforward or simple; on the contrary, it is dialectic, â€Å"moving back and forth between change in belief and change in classroom practice† (Cobb, Wood, and Yackel, 1990; Frank et al., 1997; Thompson, 1992, in Nelson, 1999, p. 6) Wood and Bennett (2000) support this statement with the results of a study, in which a group of early childhood educators in England were helping to collect data concerning their theories of play and their relationship to practice. As a result, these educators changed their own theories or teaching practices, or even both. Similar results are reported by Kettel and Sellas (1996) in a study of the development of practical theory of student-teachers in Australia; by Kallestad and Olweus (1998) in a study involving Norwegian teachers, which shows that teachers’ professional preparation and development have a large impact on defining teachers’ goals for their students, and these goals in turn affect the teachers’ behavior in the classrooms and schools; and also by Youngs (2001). Following the examination of data assessing the effects of four different models of professional development (teachers’ networks, the use of consultants and inter-visitations, students’ assessments and school improvement plans) on teachers’ professional development and school capacity in different part of the U.S.A, Youngs found that all models generally strengthened teachers’ knowledge, skills and dispositions, and they had varied effects on other aspects of school capacity. Yet, there is still a need for more research to be done in this area. According to the latest literature, some studies have been carried out as a result of this initiative. For example, research reported by Baker and Smith (1999) identified the following characteristics of professional development as being the most effective in sustaining change in teachers: 1. A heavy emphasis on providing concrete, realistic and challenging goals; 2. Activities that include both technical and conceptual aspects of instructions; 3. Support from colleagues; 4. Frequent opportunities for teachers to witness the effects that their efforts have on students’ learning. As Ingersoll (2001) reports: â€Å"Requiring teachers to teachers to teach classes for which they have not been trained or educated harms teachers and students† (p.42). Ingersoll refers to data that show that most â€Å"out-of-field† teachers are more commonly found among first-time teachers, in low-income schools, small schools, and lower-achieving classes. Classes with â€Å"out-of-field† teachers usually generate lower student achievement. In her research, Little (2001) discovered that in restructuring schools, most of the â€Å"official time† devoted to professional development is based on the conception that professional development is a process of inspiration and goal setting where administrators have already set goals and objectives of change, and professional development activities are used to motivate teachers to strive to meet them. In summary, the professional development of teachers is a key factor in ensuring that reforms at any level are effective. Successful professional development opportunities for teachers’ have a significant positive effect on students’ performance and learning. Thus, when the goal is to increase students’ learning and to improve their performance, the professional development of teachers should be considered a key factor, and this at the time must feature as an element in a larger reform. Little (2001). Local Dr. Manila (2002) is a newly-installed principal of a public secondary school in Baguio City which ranked second to the last in the achievement test in the previous school year. As an initial step to make the school one of the best in the city she selected several teachers to undergo a professional development program that she designed, hoping to achieve the results she envisioned for the school. A year after the training, the principal expected a big improvement in the performance of their school. Unfortunately, there was no improvement in the schools’ making. It is important that you learn to decide on what training is best for and what training should come first. Professional development programs are more effective when the individual needs of teachers are taken into account. The conduct of needs assessment must consider the critical skills areas that are needed for successful performance. The strength and weaknesses of teachers in key areas that have been proven to impact directly on student achievement should be identified. In a related study entitled â€Å"Continuing Professional and Technical Education in the Philippines† by Divina Edralin, Ph.D., the author’s recommendations may also be considered in making Continuing Professional Education serves its intended purpose among professional organizations. These are: 1. Formation of a Unifying Human Resource Development Framework; 2. Review of Matrix on Continuing Education; 3. Greater access to education, training, and retraining; 4. Incentives for Professionals and Technical Workers; 5. Needs identification and assessment; 6. Effective integration of education and employment; 7. Active tripartite cooperation; and 8. Financing Scheme. Moreover, to keep Continuing Professional Education relevant to the professions, certain challenges have to be considered. Terso Tullao, Jr. 1999 (p. 32) underlines â€Å"the need to refocus CPE programs towards research, graduate education, inventions and publications†. He adds: â€Å"Professional organizations should have their own journals reviewed by national or international experts. They should also sponsor professional lectures where there distinguished members or outside experts are asked to discuss topics on their expertise. Similar to the quest of higher educational institutions to make research outputs of their professors published in international journals, professional organizations should encourage their members to publish in referred international journals. Ultimately, professionals must realize that they are the best â€Å"architects† of their personal professional development plans. They have to be more proactive and take the initiative in enhancing their competence and performance. According to Zenon Arthur S. Udani, Ph.D., 1995, on his study on â€Å"Continuing Professional Educations: Training and Developing Filipino Professionals Admist Globalization†, Professional updates which trigger build-up in knowledge and related skills more professionals to the next stage of competence-building. â€Å"As they realize that what they know and what they can do are no longer sufficient to be productive and effective professionals, competence-building becomes a more urgent concern. It calls not only for updates in professional school basic knowledge and skills, but also for education derived from pluralistic sources (continuing education for professions) found useful in assuming competence required by what professionals actually do for a living.† At the stage of competence-building, professionals, aided by their associations, would have identified their key areas of professional development and growth. Updating members of professionals associations on current issues in their field is unquestionally important. This appears to be the dominant thrust of the professional associations surveyed in this study. However, CPE in these professional associations must go beyond this stage. Competence-building and performance-enhancement must also be encouraged among the member of professional associations. Ultimately, it is the personal vision, professional drive, and sense of urgency of the individual members that would guarantee positive outcomes and improvements in professional competence and performance.

Investment Appraisal Process: Objective, Inputs And Process

Investment Appraisal Process: Objective, Inputs And Process Introduction Decisions related to investments are one of the most important and vital decisions for any organization. Making investments is the only way to increase, and maximize return on the shareholders wealth. However, taking the right investment decisions is the biggest challenge that management faces. Investment decisions are always characterized by risk and uncertainty. According to Lumby (2004) investment decision defined in simple terms, is one in which organizations make an initial cash outlay, with the aim of receiving, in return, the future cash inflows. Investments can be analyzed from several perspectives, like its suitability according to the companys objective, social cause, environmental concern etc. Yet, for the purpose of investment appraisal, it is analyzed from the point of view of cash flow only. Thus, the basic aim of investment appraisal is to check whether the initial outlay would result in enough future cash inflows, to be considered worthwhile. In order to achieve this objective, companies require certain inputs. These inputs are put through the process of investment appraisal, to reach the final outcome. Inputs Required For Investment Appraisal Investment appraisal in broad terms requires only two inputs – the estimated cash flows, and discount rate. The estimated cash flows includes all the cash outflows starting from the initial stage till much later, and inflows taking place during the lifetime of the project. This gives the final figure, which is positive or negative cash flows i.e. either inflows are more than outflows which is the acceptable case, or outflows are more than inflows which obviously leads to rejection of that project. Calculation of these cash flow figures, involves the treatment of a number of items. Cash Flows And Time Value Of Money For the investment appraisal process as discussed earlier, cash flow estimates are the primary input. Initial outlay is easy to estimate as compared to future cash inflows, and even outflows. This is because current requirements for any project, would be ascertained according to which the required finance, can be obtained. Whereas, in the case of future estimates, all the figures are estimated on the basis of some premise, which is always prone to uncertainty. Once these estimated figures are available, companies calculate these future cash flows, in terms of todays value. This is known as the time value of money, according to which, a pound today is not equivalent to a pound tomorrow. According to the time value of money, the investor needs to be compensated for certain factors. Firstly, the investment made has delayed the current consumption of the investor. Current consumption is preferred over future consumption for which, the investor needs to be compensated. This compensation i s the interest that is expected on the money invested, for that period. The second factor is inflation, the current inflation rate in UK, is 1.8% (for the month of July Bloomberg.com) Thus, what can be bought for one pound today, will be available for 1.018 GBP, the next year. Thus, future estimates must be converted in terms of present value, so as to find out its present worth. In order to compensate the investor for these two factors, the rate of return offered, is called the risk free rate. This is equivalent to the rate offered by reputed government bonds, or bills. Other Inputs There are some other factors which are required to be considered for the calculation of cash flows. The first is depreciation, which does not form a part of cash flows. For the purpose of calculating true cash flows, the precise time when the cash flow has occurred, is needed. However, depreciation does not involve any cash transaction. So, this is not included while calculating the cash flow. The second is working capital. According to Arnold (2008) besides the large and obvious depreciable assets, investment is also made in working capital. It includes the items like cash, debtors, stock which are part of companys assets and creditors which is the part of companys liabilities. Another important factor is interest. Treatment for interest is again, not straight forward. Interest can be viewed from two aspects. Firstly, if the company is employing its own funds. In that case it is losing the interest which it would have earned, by depositing money in the bank. This does not require an y treatment here, because this has been considered as the opportunity cost, and treated accordingly. Secondly, if the organization has borrowed funds from the financial market, then the interest is paid on it, which is a cash expense, and must be included in cash flow calculation. Yet, what is seen in most of the cases is that, organizations use combination of both debt and equity. Now, the same item i.e. interest cannot be treated in two separate ways. As a result, it is considered as an opportunity cost. Besides interest on capital, opportunity cost also includes a number of factors, like a building used in any project, would have earned rent otherwise, which is also the opportunity cost of the project. Other similar factors could be machinery, human resources, and other assets. The last factor is the taxation which also reduces the cash flow, by the amount of tax paid. In this case the notable factor is that debt capital gets the tax shield. However tax is to be paid on equity ca pital, making it costlier. Once all the inputs are gathered there are number of techniques available to evaluate the investment, in order to find out whether it would be profitable or not. Discount Rate Once the cash flow figures are derived for the entire period of the project, there are several methods using which we can perform the task of investment appraisal. There are some methods in which there is no allowance for the time value of money, like payback method, and accounting rate of return (ARR). In such methods, the discount rate is not required. However the more sophisticated and widely used methods use the discounted rate of cash flows like net present value (NPV), and internal rate of return (IRR). What is the discount rate and its components is discussed below. Definition The rate of return used for the purpose of finding the present value of future cash flows, is the discount rate. This rate includes the time value of money. Thus, as discussed above it is the risk free rate, plus risk premium. Risk premium depends upon the risk involved, in any particular project. Risk Free Rate Risk free rate includes the expected inflation rate, and the interest on capital which is treated as the opportunity cost of capital. As Arnold (2008) has mentioned â€Å"The risk free rate (RFR), forms the bedrock for the time value of money. Calculations such as the pure time value, and the expected inflation rate, affect all investments equally†. Risk Premium The discount rate is not the risk free rate. Rather, it is always more that that. The rate which is above the risk free rate is risk premium. Risk is the probability of not receiving the estimated return, owing to the uncertainty in any business. Higher the risk, higher is the return expected, and vice versa. However calculation of risk in itself is a difficult task. There are numerous methodologies available, for evaluating risk. The most famous among these are, sensitivity analysis, scenario analysis, and probability analysis. After getting the cash flows and discount rate, the next step is to evaluate the project. This is to determine whether the project is worth undertaking, or not. For this purpose, there are various methods. Some of the most popular ones, used across the globe, are discussed here. Investment Appraisal Techniques Payback Method This method is used to find out the period in which the future cash inflows would be sufficient, to cover the initial investment. Once this figure is obtained, it is then compared with any arbitrarily chosen time period, set as a threshold by the company. If the payback period is shorter or equal to this chosen time period, then the investment is acceptable else it is rejected. Accounting Rate Of Return It is more popularly known as return on capital employed (ROCE), or return on investment (ROI). The ARR is a ratio of the accounting profit to the investment, in the projects. It is notable that here, accounting profit is used, and not the final cash flow figure. Net Present Value This method uses the discounted cash flows. In this, the present value of outflows is subtracted from the present value of inflows. If the result, known as NPV, comes out to be positive or zero the project is accepted else not. Internal Rate Of Return This method also takes into account, the time value of money. This is used to find out the rate of return, at which net present value of an investment is zero. If this rate is higher or equal than the discount rate, then the project is acceptable else it is rejected. Issues To Be Addressed Research Question How an investment appraisal technique helps companies move in the right direction, regarding investment decisions? Other related questions are: What are the pre-requisites for this? What are the methods applied? What are the challenges faced by an organization? Why The Question Is Important? This holds a lot of importance for the organizations since the sizeable investments made by the companies, have long term consequences. The companys strategic position too, is determined by such large investments made in terms of tangible or intangible assets. It impacts the future cash flows. Thus, in order to ensure that every thing moves efficiently in future with any investment made by the company today, investment appraisal is not only necessary, but also inevitable. Research Objective The main objective of this research is to find out if there is any gap between the theoretical concepts studied and analyzed, and its implementation. In practice, matters are always little different, than what it is taught academically, or found in literature on any subject. However, to what extent there is a level of variance in case of investment appraisal, between theory and practice, is attempted to be determined, in this research. The previous research on investment appraisal discussed in broad terms, about changes in methodologies with time; factors to be considered for appropriate calculation of cash flows; and components of discount rate. Yet, none of these studies have shed much light on its practical application, which is empirically investigated, in this research. In particular, three divisions of investment appraisal – objective, inputs and process, is examined. Introduction In this section research work already done on investment appraisal process and its various other aspects have been studied. It will also reveal some elements which are quite important but still not treated appropriately to achieve effective and unambiguous evaluation of capital investments like inflation and taxation. Companies have limited resources. In order to achieve the best utilization and maximum output from these resources companies require a mechanism to decide or analyze which investments are worth taking and which are not. It is a multifaceted and analytical process and many prior studies on this practice exist. A number of surveys scrutinizing the investment appraisal process have been conducted from time to time. These surveys shed light on the changes in the use of methodologies and other practices, which formed an integral part of investment appraisal. A review of the existing literature reveals that, there have been continuous changes in the techniques used for investment appraisal. Different models and methods have been developed for investment appraisal and risk analysis. Over the period of time these developments have been incorporated into corporate practice. What does this investment appraisal process involve as found in literature analyzed and secondary sources providing quantitative data regarding the same is discussed below. Estimation Of Future Cash Flow Investment appraisal requires detailed cash flow forecasts as inputs for sophisticated evaluation methods which have been discussed above. For an investment decision to be considered as successful, it must add value to the firm. Such a project would surely increase the cash flows of the firm, but how much? At this juncture, the firm confronts the problem of estimating the future cash flow, investment outlay and cash inflows emanating from any new project, and finding out whether it adds value to the firm or not. Considering the case of Alaska pipeline project setup by many oil majors, initially its cost was estimated to be $700 million. The final cost, however, came out to be $7 billion. This shows estimation of project cash flows is one of the most important and critical parts of investment appraisal, because in case these estimates turn out to be unreliable or biased, the project would lead to poor business decisions. There are many variables involved and numerous people participat e in this exercise. Capital outlays are estimated by engineering and product development departments; revenue projections are delivered by the marketing department; and operating costs is aggregate of estimates given by number of departments like production people, cost accountants, purchase managers, personnel executives, tax experts and others (Chandra, 2008: 304). To estimate the possible future values, past events are generally used in order to estimate what possibly could be the future outcome or results for the same, or similar kind of event. Earlier, the most conventional method was to find out the best estimate from the information available. This estimate is generally the single value derived, using the mode or average, or a similar likely outcome. However, evaluations based on the single value estimates, show that the estimated value is certain, with no possible margin of error or variance. As a result, instead of using a single value as the best estimate, a new methodology of using a range of outcomes, is used. These outcomes are based on the probabilities of occurrence or non occurrence of events, which affect the cash flows (Dayananda, 36: 2002). Stages In Cash Flow Estimation According to Dayananda (2002) cash flow estimation comprises of four stages: Forecasting the initial capital outlays and operating cash inflows and outflows. Tax factor, which is an important element to be adjusted against these cash flows. There are certain other variables apart from tax like inflation, opportunity cost and depreciation etc. which need to be checked in order to find out its impact on cash flows. Allocating any further resources in order to improve the accuracy and reliability of the variables which have greatest influence on cash flow estimate. This entire process requires close monitoring and early intervention, when required. Monitoring is required at all stages from data acquisition process to projects implementation (Dayananda, 2002: 37 39 – capital budgeting: financial appraisal of investment projects). Estimating Incremental Cash Flows For Investment Apraisal The fundamental principle for the inclusion of cash flows for the purpose of investment appraisal is to include only the incremental cash flows. This refers to the cash flow incepted after the implementation of the project. The time when the investment is made, is considered as time 0, and the cash flows generated after time 0 constitutes a part of the incremental cash flow. For ascertaining the firms incremental cash flow, it is required to identify the cash flow of the firm in two situations i.e. with the project and without the project. The difference between the two gives the incremental cash flows. In estimating incremental cash flow all incidental effects are also considered. Incidental effects lead to an enhancement in the value of some existing activities, such as a rise in the demand of an existing product. However, incidental effects may also turn out to be negative like product cannibalization i.e. with the introduction of a new product, the sale of some existing products may decline (Arnold, 2008: 99-100; Chandra, 2008: 307-308). Opportunity Costs And Sunk Costs There are also certain aspects which are not apparently detected and need to be treated in the valuation of cost of capital. Opportunity costs and sunk costs are the two types of costs which fall under this category. Opportunity cost is the revenue lost by using the resources forming part of the project, under consideration. These resources might be rented out or sold, or used elsewhere. The sunk cost is the cost which the firm has already incurred, and has no effect on present or future decisions. It is the previous cost which was incurred in the past, and is irrecoverable irrespective of the fact, whether the company accepts the project or not. Furthermore, Rustagi (2005) classified the cash flows associated with a project as original or initial cash outflow, subsequent cash inflows and outflows, and terminal cash flow. Initial Cash Outflows, Subsequent Cash Flows, And Terminal Cash Flows Original or initial cash outflow is the initial investment, occurring at the beginning of the project. This is required to get the project operational. Since the investment cost occurs in the beginning of the project, it is easy to identify the initial cash outflow. It includes the acquisition of assets like machinery, building, technology etc. Along with the cost of assets, other incidental costs must also be considered, like the cost of transportation and installation. Sunk costs and opportunity costs as discussed above are also a part of this. Subsequent cash inflows and outflows are generated after the initial outlay of capital. The investment is expected to generate a series of cash inflows, through the project that has been initiated. These inflows may be the same every year or may vary from one year to another throughout the lifespan of the project. In addition to inflows, capital budgeting decisions also consider the subsequent outflows, that might be required for periodic repairs or maintenance. The third classification is the terminal cash inflows. These are the cash inflows in the last year. Firstly, this would include the scrap value, or the salvage value of the project, which is realizable at the end of the economic life. The second, is the working capital which gets released at the completion of the project. This is again, made available to the firm. Estimation of cash flows as a measure of the cost and benefits of any project, includes these three forms of cash flows, and forms the part of any good technique to evaluate a proposal (Rustagi, 2005: 486 489). In addition to all these factors, cash flows also get affected by the factors which are unlikely to be precisely forecasted, and keeps changing with time, like inflation and taxes. Treatment Of Inflation Inflation has a direct impact on the final outcome of investment appraisals. It affects both the future cash flows, and cost of capital. If inflation is not properly adjusted, the future cash flows are increased, over and above, what they would be. For the adjustment of inflation, cash flows have to be either presented in the real terms or money (nominal) terms. Adjustment Of Future Cash Flows In Real And Money Terms In real terms, future cash flows are adjusted in terms of todays current purchasing power, and in money terms cash flow is adjusted, according to the purchasing power, at the time they occur. For applying the correct treatment, companies are required to discount the real cash flows at the real discount rate, and nominal cash flows at nominal discount rates (Drayery and Tayles, 1997). As per Carsberg and Hope (1976) in Arnold and Hatzopoulos (2000) the companies earlier, adjusted for inflation in a rather inappropriate manner. Companies have been either estimating the future cash flows in nominal terms. For the purpose of discounting, they have used real rate of return. Or, they have been estimating the future cash flows in real price terms, but discounted at the money discount rate. There is a significant change in this practice from the last two decades (Arnold and Hatzopoulos, 2000: 12). However in contrast to this, according to the data collected by Drayery and Tayles, 1997 There are still a majority of firms, treating the problem of inflation, incorrectly. The survey was conducted on 195 firms in UK,out of which only 53 or 27% are doing the correct treatment of inflation, with regard to future cash flows (Data attached in appendix 1). Common Mistakes In The Adjustment Of Inflation Thus, we can see that the adjustment for the treatment of inflation, regarding future cash flows and relative discount rates, is not a very uncommon mistake. The most common mistake is using the money discount rate of return for discounting the cash flow estimates, available in terms of real prices. This leads to the undervaluation of NPV, leading to the rejection of the project in some cases, which are worth undertaking, yet, are not. In case of the converse scenario, the result would be overvaluation of the NPV, leading to the failure of projects in the long run. Long term projects, are more prone to this kind of mismatch, because with a longer time period, the variation in cash flows, due to non inclusion of inflation, gets compounded. The cash flows accrued after many years, are valued in current terms, and that turns out to be highly distorted. In case of short term projects, even if inflation has not been included, the distortion in the values of future cash flows, is not very high (Drayery and Tayles, 1997: 3). Treatment Of Taxes Taxes have a direct and considerable impact, on the project viability. For a complete project appraisal, it is important to consider the complete taxation implications, over the cash flows. It is vital for the purpose of investment appraisal, to consider the cash flows after paying taxes, since only these are available to shareholders. There are many important aspects to be considered, regarding taxation. According to Arnold (2008) if the tax liabilities of the firm gets increased due to the project, then the increased tax effects must be incorporated in the analysis, to reach the actual cash flow figure. Secondly, taxes are not generally paid in the same year in which they occur. Companies pay a part of the current years taxes and part of the accrued taxes, which must be considered accordingly. The time factor must be correctly accounted for, while analyzing the cash outflow of taxes. According to Rohrich (2007), due to the investment, tax would arise and NPV must be calculated only after taxation. The implications of taxation would affect the NPV considerably. Firstly with taxes, cash flow will decline and so will the NPV calculated out of that cash flow. Secondly, the capital structure of the project also results in the decline in discount rate, with an increase in gearing ratio. Since the interest on debt is tax deductible, it reduces the cost of capital, and thus leads to fall in the discount rate. Besides these Lumby (1988) has also thrown light on one more important aspect. This is the system of writing down balances, which also provides tax relief on capital expenditure. Thus, the net effect of the taxation could be seen as a decline in NPV, due to a decrease in cash flows, on one hand. On the other hand there was an increase in NPV, due to a decrease in discount rates. Cost Of Capital â€Å"The cost of capital is the rate of return that a company has to offer finance providers to induce them to buy and hold a financial security. This rate is determined by the returns offered on alternative securities with the same risk† (Arnold, 2008: 717). The definition given shows that the rate of return on the capital, is what determines its cost. This rate of return is the discount rate used by the companies. If it is evaluated higher than what actually it should be, then it constrains the investments. Like Arnold (2008) has quoted Michael Haseltine, one time President of the Board of Trade â€Å"Businesses are not investing enough because of their excessive expectations of investment returns† (Arnold, 2008: 717). High Rate Of Return According to Ashford et al. (1988) companies use considerably high discount rate than required, as per the opportunity cost of capital. The reason for this, is the risk premium which companies apply, especially in case of investments made in the projects using new technology. Such projects are considered to be more uncertain, so the discount rate is higher than in other investments (Ashford et al., 1988: 2). Arnold and Hatzopoulos (2000) have quoted Antle and Appen (1985) and Antle and Fellingham (1990) that managers in order to keep a strict control over corporate resources and to reduce the tendency to over invest, keep high discount rates (Arnold and Hatzopoulos, 2000). Similarly according to Dimson and Marsh (1994) in Drury and Tayles (1996) firms in UK use excessively high discount rates, which in turn, have led to the under-investment in UK firms. In USA too, firms use hurdle rates for project evaluation, which are higher than their estimated cost of capital (Drury and Tayles, 1996: 12). Wacc In order to attract investors, companies have to provide returns, higher than the opportunity cost of capital. Companies use a standard means to express their cost of capital, using weighted average cost of capital (WACC). According to Bruner et al (1998) WACC is the method used by most of the companies, advisors and even textbooks, as a method to derive the discount rate used as the cost of capital. Bierman (1993) conducted survey in which 74 Fortune 100 companies participated. The results obtained showed that all the companies use some form of discounting in their capital budgeting, and 93% use a weighted-average cost of capital (Bruner et al, 1998: 2-3). Arnold and Hatzopoulos (2000) presented information given by Westwick and Shohet (1976) stating that companys bank overdraft rate was the most popular method among UK companies for selecting the rate of return to be used for evaluating capital investment. At the same time WACC was in practice by less than 10% of firms. However, th is trend changed substantially over the period of time and according to the data collected by Arnold and Hatzopoulos (2000) more than half of the firms use WACC to calculate the cost of capital (results attached in appendix 2). In addition to this, it is also notable that still significant minority firms use interest rate payable on debt as a measuring tool to calculate the cost of capital (Arnold and Hatzopoulos, 2000: 17). For calculating the WACC a company needs to acquire information about the cost of various sources of capital and their proportions in the capital structure. Considering that we have two sources of finances i.e. equity and debt, here cost of capital is determined by the formula: WACC = KEWE + KDWD Here, KE = cost of equity KD = cost of debt WE = proportion of equity finance to total finance WD = proportion of debt finance to total finance Cost Of Debt Debt entails to more or less fixed payments, so estimating the cost of debt is relatively easy. Arnold (2008) has covered three factors which determine the cost of debt, these are: 1. Existing rate of interest on debt capital. 2. The risk of default by the debtor and recovery rate or chances in case of default. 3. Benefit derived from debt capital due to the tax shield. Cost Of Equity While the estimation of cost of debt is easy, the cost of equity is rather difficult to estimate. This is due to the fact that companies do not have any commitment towards the shareholders to pay dividends. However, companies have been reaching some reasonably good estimates of the cost of equity using some prevalent methodologies like Capital asset pricing model. Although, some firms mention other models as well like arbitrage pricing theory but these are in small proportion. Another model which was most influential in 1960s was Gordon growth model. However, there was a problem of obtaining a reliable estimate of future growth rate of dividends in this model. This was obtained objectively using past data which was not considered to be a trustworthy estimate (Arnold, 2008: 726). According to Bruner et al. CAPM is the most popularly used model for estimating the cost of equity. In a wide survey conducted by Trahan and Gitman (1995) of 84 fortune 500 large firms and best small Forbes 200 companies it was found that 30% of respondents use the capital asset pricing model. Similarly, in a survey conducted in Australia, CAPM is the most commonly used method in estimating the cost of equity, with 72% of the companies under survey, using this model (Truong et al., 2006: 3). In contrast to this Arnold and Hatzopoulos (2000) has mentioned views from several sources stating that According to Bruner et al there are theoretical, practical and empirical doubts cast on the most heavily promoted method of calculating the equity component of WACC, that is, the CAPM (Lewellen, 1977; Mullins, 1982; Lowenstein, 1989; Tomkins, 1991; Fama and French, 1992; Rosenberg and Rudd, 1992; Mills et al., 1992; Strong and Xu, 1997; and Adedeji, 1997). The difficulty faced under this model is to determine a particular divisional beta and cost of capital. This problem has been discussed in quite an elaborate manner by Bruner et al. using different beta rates and expected market return. The result produced shows substantial variation in the cost of equity and in turn had a great variation on cost of capital (result attached in appendix 3). To conclude, what can be seen is the result drawn out of study on the corporate cost of capital and the return on corporate investment. This shows average corporate investment produced returns that exceed the cost of capital. This is analyzed for the period of 1950-96, the real cost of capital for non-financial firms is high, 5.95 percent. The real return on cost is higher, 7.38 percent as a result on average investment seems to be profitable (Fama and French, 1999). Analysing The Level Of Usage Of Appraisal Techniques Since decades companies have been in continuous search of reliable investment appraisal techniques. These techniques helps to rank the multiple competing projects on the basis of benefits that can be derived out of each one as against the costs incurred over the same. Conventional Methods The first analysis studied here is the survey conducted by Arnold and Hatzopoulos in the year 1997. The survey examines the level of usage of four main conventional appraisal techniques – payback method, accounting rate of return (ARR), internal rate of return (IRR) and net present value (NPV). 300 companies are surveyed which are ranked in the Times 1000 companies according to capital employed (results attached in appendix 4). This survey is also compared with two previous surveys one is by Pike covering the period from 1975 to 1992; and Alkaraan and Northcott for the year 2002. These are chosen for comparison because of similar characteristics in all the three surveys. According to the results, it is quite clear that payback method has been the most widely used technique till early 1990s as compared to discounted cash flow methods – IRR and NPV. However, thereafter rise in the usage of NPV can be seen and as for now it became the most popular appraisal technique. Yet, this was not at the expense of a decline in the usage of the payback method. Even payb

Driving Ability Essay -- essays research papers

What things affect your driving ability? There are many things that affect your driving ability. Your emotional, vision and physical condition are just a few. Responsibility, maturity, and self-control are factors that affect your driving. It’s not just skill that matters. It’s your ability to think clearly and make sound, responsible decisions. Everybody experiences strong feelings that are both positive and negative. When you experience a strong negative emotion, you may feel as if you have to display forcefulness. This can lead to driving aggressively. This is called road rage. Violence is sometimes associated with road rage. Strong emotions can have an effect on your driving. They can interfere with your ability to manage the risk involved.   Ã‚  Ã‚  Ã‚  Ã‚  Inattention and lack of concentration may affect your driving. Both of them take your mind off of the road. It could be you being preoccupied or thinking about an exciting basketball play. It may be that you are thinking about a test that you need to study for, your boyfriend or girlfriend. The lack of concentration may cause you to speed or break other driving rules without you realizing it.   Ã‚  Ã‚  Ã‚  Ã‚  Safe driving is a full-time job for your mind and your body. Drivers must be in a state of mind that allows them to see, hear, acknowledge signals of the roadway and behave accordingly. If the occasion ever occurs when you’re not in the right state of mind, allow someone else to drive fo...

Palazzo Art History Essay

Context Few windows overlook the inner courtyard (â€Å"cortile†); the colonnaded walls are decorated on all sides by deep niches and blind windows, and the intervening surfaces are spattered by ‘spezzato’ (broken and blemished plaster) giving life and depth to the surfaces. Function pleasure palace, or Villa Suburbana Description terms four exterior faà §ades have flat pilasters against rusticated walls Intent pleasure palace, or Villa Suburbana Palazzo del Te or Palazzo Te is a palace in the suburbs of Mantua, Italy. It is a fine example of the mannerist style of architecture, the acknowledged masterpiece of Giulio Romano. The official name, and by far the most common name in Italian, is Palazzo Te, but this may be a relatively recent usage; Vasari calls it the â€Å"Palazzo del T† (pronounced as â€Å"Te†), and English-speaking writers, especially art historians, continue to call it the Palazzo del Te. In Italian this now suggests use for tea-drinking, which may account for the divergence in usage. HideDescription Palazzo del Te is a square building, constructed 1524-1534 for Federico II Gonzaga, Marquess of Mantua. He decided in 1524 to build a pleasure palace, or Villa Suburbana. The site chosen was that of the family’s stables at Isola del Te on the fringe of the marshes just outside Mantua’s city walls. The architect commissioned was Giulio Romano, a pupil of Raphael. The shell of the palazzo was erected within 18 months. It is basically a square house built around a cloistered courtyard. A formal garden complemented the house. This was enclosed by colonnaded outbuildings terminated by a semi-circular colonnade known as the ‘Esedra’. Like the Villa Farnesina in Rome, the suburban location allowed for a mixing of both Palace and Villa architecture. The four exterior faà §ades have flat pilasters against rusticated walls, the fenestration indicating that the piano nobile is on the ground floor with a secondary floor above. The East faà §ade differs from the other three by having Palladian motifs on its pilaster and an open loggia at its centre rather than an arch to the courtyard. The facades are not as symmetrical as they appear, and the spans between the columns are irregular. The centre of the North and South facades are pierced by two-storey arches without portico or pediment, simply a covered way leading to the interior courtyard. Few windows overlook the inner courtyard (â€Å"cortile†); the colonnaded walls are decorated on all sides by deep niches and blind windows, and the intervening surfaces are spattered by ‘spezzato’ (broken and blemished plaster) giving life and depth to the surfaces. Once the shell of the building was completed, for ten years a team of plasterers, carvers and fresco painters laboured, until barely a surface in any of the loggias or salons remained undecorated. Under Giulio Romano’s direction, local decorative painters such as Benedetto Pagni and Rinaldo Mantovano worked extensively on the frescos. These frescoes remain today and are the most remarkable feature of the Palazzo. The subjects range from Olympian banquets in the Sala di Psiche and stylised horses in the Sala dei Cavalli to the most unusual of all — giants and grotesques wreaking havoc, fury and ruin around the walls of the Sala dei Giganti. Mannerism’s most famous fresco: Giulio Romano’s illusionism invents a dome overhead and dissolves the room’s architecture in the Fall of the Giants. These magnificent rooms, once furnished to complement the ducal court of the Gonzaga family, saw many of the most illustrious figures of their era entertained such as the Emperor Charles V, who, when visiting in 1530, elevated his host Federico II of Gonzaga from Marquess to Duke of Mantua. One of the most evocative parts of the lost era of the palazzo is the Casino della Grotta, a small suite of intimate rooms arranged around a grotto and loggetta (covered balcony) where courtiers once bathed in the small cascade that splashed over the pebbles and shells encrusted in the floor and walls. In 1630 Mantua and the palace were sacked by invading forces, the remaining population fell victim to one of the worst plagues in history. The Palazzo was looted from top to bottom and remained an empty shell: nymphs, god, goddesses and giants remain on the walls of the empty echoing rooms. Part of the Palazzo today houses the Museo Civico del Palazzo Te, endowed by the publisher Arnoldo Mondadori. It contains a collection of Mesopotamian art.

Evaluating the Research Process Essay

This paper will be used to evaluate the research process. The chosen article is Pregnancy Risk among Black, White, and Hispanic Teen Girls in the New York City Public Schools. The research process is inclusive of several initial parts which are the selection of a problem, formulation of a hypothesis, a description of the subject, and the review of any literature as well as to construct a design plan, analyze data and write a conclusion. The paper will be used to discuss the literature and how it is used in the research. What are the considerations for data collection and what is the data telling us in terms of statistical analysis? In the article Pregnancy Risk among Black, White, and Hispanic Teen Girls in New York City Schools, the data was collected form the use of the (YRBS) New York City Youth Risk Behavior surveys. The survey was implemented by the (DOHMH) New York City Department of Health and Mental Hygiene and the (DOE) Department of Education. The surveys have been conducted since 1997 on a biennial basis. The data that is used was collected from surveys that were taken in 2005 and 2007. A total of 17,220 students from 87 public high schools were surveyed. Since this information was collected from individuals that were not of legal age, the researchers were extra careful to protect the confidentially of the students. This was done by having the students to complete a survey that requires that no personal information is given. The survey consists of 99 questions and it is self-administered. The data that has been collected has concluded that there is definitely a difference in the sexual activity of girls between the ages of 15 and 19 years old that attended public schools in the New York City area. The differences include more than just age, it also include race, ethnicity, schools, neighborhoods and economic backgrounds as well. Based on the findings of the surveys there is an unmistakable difference in the statistics for each group that participated. Therefore there is a definitely a correlation between the findings and the figures that were used. The numerical data that was retrieved from the survey proves that the data is significant and provides enough evidence to support the significance of the study. In the article the results concluded that (32.6%) of high school girls reported that they were sexually active in the 3 months prior to the survey. Out of all of the girls that participated in the survey, black students were more likely to be sexually active followed by Hispanics the whites. There were variations in the sexual activity which increased or decreased with age, race and ethnicity. The results also assessed the differences in each group access to and the use of contraceptive. The conclusion states that the use of hormonal contraceptive such as the pill was low among all racial and ethnic groups. Differences also occurred within the different neighborhoods. The conclusion noted that Hispanic girls in New York City were less likely when compared to white to use any type of contraceptive methods which put them at a greater risk of becoming pregnant. It also state that if there is any hope of preventing teen pregnancies, the proper information must be made available to educate these girls about long acting methods of contraception. Upon careful review of the conclusion it is evident that the conclusion does answer the research question as it is stated in the definition of the problem. The conclusion is appropriate because it re states the obvious facts from the date that had been collected from the surveys. It also summarizes the finding and breaks down the data so that suggestions can be made as a way to help to prevent teen age pregnancy within the area that was deemed to be high risk. Although the article has significant statistics and data, it is my opinion that there is not enough information to make a decision on the effectiveness of the study. There were several limitation within the study that allows one to question the effectiveness of the study overall. First, the YRBS only included limited questions pertaining to sexual activity and contraception which means it is possible that there are unmeasured differences in the frequency of sexual activity and the consistency in the use of Contraceptives which could make the collected data on each group incorrect. There are also limitations related to data that is collected by neighborhood schools. In some cases students choose to attend magnet or other specialized schools that are located outside of their home school. Another limitation is that the finding for the study was generalized to teens that attended New York City public schools. Therefore, many students that lived in the city but attended private schools or were in a special education program were not surveyed. The article lacked significant information on any other studies that the data could be compared to as a way to test for accuracy of the information. The literature review for the article was used to analyze the variation in the components that plays a major role in assessing the pregnancy risk among students attending New York City public high schools. The discussion portion of this article breaks down all of the difference and compares all of the similarities that exist between black, whites, and Hispanics which contribute to the high pregnancy rate within each group. The discussion also touches on the evidence that schools and neighborhoods can be a major influence in the risk of pregnancy for teen aged girls. Racial and ethnic differences have had an effect on the motivation and the expectation of girls to become sexually active in the early teen years. Fortunately the diverse nature of the study will help to provide the information needed to initiate programs that will give girls the knowledge to delay pregnancy until later in life.