Working Out Payback Periods Finance Essay - Free Essay Example

Sample details Pages: 4 Words: 1074 Downloads: 9 Date added: 2017/06/26 Category Finance Essay Type Narrative essay Did you like this example? Because there is capital rationing, profitability index (PI) will be the best method to apply in deciding which projects the company should undertake. Profitability index will show the return on investment and not just the absolute profit like the Net present Value. But before appraising the proposals using profitability Index, the entire methods used in question one will be used. PAYBACK PERIOD Using pay back period method to assess the proposals, proposal 5 would rank 1st because it can pay back the capital invested in one year. 2nd is project 3 which has an outlay of E200, 000 and can repay same in one year and four months. Since there is limited fund available to E 300,000, the AP Plc would only carry out proposals 5 and 3. Don’t waste time! Our writers will create an original "Working Out Payback Periods Finance Essay" essay for you Create order NET PRESENT VALUE Based on the Net present Value (NPV), AP Plc can only carry out proposals 5 and 2. Proposal 5 will give the company a net present value of E195,300, while proposal 2 will give a net present value of E70,140. In total the company will generate a net present value of E263,440. Having discounted the cash flows with the companys cost of capital of 10%. PROFITABILITY INDEX (PI) Based on profitability index, proposal 5 ranked 1st, proposal 4 ranked 2nd , proposal 1 ranked 3rd , proposal 2 ranked 4th and proposal 3 ranked 5th. Profitability index shows the net present value in relation to the amount invested or initial outlay committed to the project. While Net present value gives the absolute discounted profit, the profitability index relates the profit to the amount invested thereby showing the return on investment. Due to capital rationing, AP Plc only has E300,000 to commit into the projects, therefore only proposals 5, 4 and 1 in that order will be considered appropriate. INTERNAL RATE OF RETURN (IRR) IRR is the rate of return that will make the net Present value to be zero, therefore it is the hurdle rate. It is the breakeven rate and it is the minimum cost of capital for the project. Based on IRR, only projects 5 and 3 will be undertaken since the initial outlay of the two proposals totaled E270,300 and the company has only E300,000. CRITERIA APPLICABLE I will recommend the profitability index as it gives the return on investments. Therefore, projects 5, 4, and 1 should be undertaken. OTHER FACTORS THE DIRECTOR MAY CONSIDER There are other factors that the Directors should consider when making decision apart from the quantitative factors. Some of the other factors are discussed below: NON FINANCIAL BENEFITS The Directors should consider non financial benefits that may arise from each proposal like motivation of staff, relationship between the company and suppliers, better quality of the product which may lead to greater market share, improved staff training which will help productivity and reduce labor turnover, and other benefits which may arise. CASH FLOWS AFTER FIVE YEARS Cash flows after five years should also be considered greatly because the company is expected to be in existence even after the five years under consideration. Some projects will bring benefit, cash inflows after the five years as well as cost saving while some proposals will only generate cash outflow after five years. CORPORATE OUTLOOK (BRANDING) Some proposals will improve the corporate outlook of the company. Outsiders will respect the company thereby bringing better branding to the company. Proposals like research and development, extra ware house, improved information technology, infrastructure like proposal 2 and quality assurance scheme are good example of such proposals. These should be looked into. OPPORUNITY COST Opportunity cost of benefits from proposals not undertaken should also be considered when making decision by the Directors. TAXATION Taxation leads to a change in cash flow ,it should be considered when appraising the proposals. Taxation payment reduces cash flow of each proposal. The analyst therefore need to know the amount of tax liability and when due for payment. INFLATION Inflation is the increase in average price of goods and services .Attempt should be made to estimate specific inflation for each proposal in order to make a good decision. 4) IRR(Internal Rate of Return) is the true interest rate earned on an investment during its economic life.Its also known as discount rate of return.IRR is widely used in practice because its the discount rate that gives zero NPV(Net Present Value).IRR relates the size and timing of the cash flow to the initial investment. IRR is the rate compared to the companys original/set rate. If IRR is greater, than the opportunity cost of capital, the investment is profitable and will yield a positive NPV. Moreover , an IRR to be accepted on any project must be greater than or equal to companys required rate of return unless some other factors dictates its acceptance. IRR calculates the rate of return required to make sure total NPV is equal to the total initial cost. Merits of IRR It places emphasis on liquidi ty. It put into consideration the time value of money. Its widely used in practice. It helps to get a clear percentage rate of return on investment. An appropriate rate of return does not necessary need to be calculated. NPV(Net Present Value) measures the absolute return on a project. Here the cash inflow is compared with the cash outflow.The difference betweens the two PV is Net Present Value. NPV is another way of determining whether or not a project should be executed.It takes into consideration the time value of money. A project with a positive NPV should accepted (except other factors dictate its acceptance), while a project with a negative NPV be rejected because it does not cover the cost of capital. The positive NPV means the projects return exceeds the discount rate ,while negative value means the project return is less than the discount rate . The cost of capital is compared with the project rate of return Merits of NPV The time value of mone y is also taken into consideration. Emphasizes the importance of liquidity by the use of net cash flows. The usage of different accounting policies are not important because they dont determine the calculation on net cash flows. Its simple to compare NPV of projects and reject project with a negative NPV. It does not require calculating different rates of returns as in IRR. It focuses on Cash flow ,rather than profit and prevents the understatement of returns. A project with a positive NPV increases the wealth of the company. NPV is technically superior to IRR. Its also superior for ranking investment in order of attractiveness.

The Development Of Human Development Essay - 1266 Words

Human Development in Children aged 11years Human development refers to the biological and psychological development in the human being throughout the lifespan. It consists of the development from infancy, childhood and adolescence to adulthood. In this essay I will analyse two practiced based experiences to demonstrate my understanding of human development. For my first practiced based experience, I will be drawing on Lev Vygotsky’s Sociocultural Development Theory. His key concepts of The Zone of Proximal Development, More Knowledgeable Others, and Internalisation. For my second practiced based experience I will draw on Erik Erikson’s Theory of Identity Development. His key concept of psychosocial development stages. My first experience concerns an 11year old girl named Ella. I was sitting in the library with Ella after she had completed her E-asTTle testing. While we were waiting to head back to the classroom Ella was completing a math’s project. 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A Sick Man’S Precious Life Essay Example For Students

A Sick Man’S Precious Life Essay Technology has been a part of everyone’s life. It can be found everywhere, in homes, in education and even in the field of medicine. Technology lead to the further development of healing and curing. Because of it, doctors can cure patients more easily and effectively. However, technology is not always an advantage. It has brought several unacceptable ideas, one of which is the ending of a suffering patient’s life. This is more popularly known as euthanasia. Euthanasia, from its Greek origin meaning easy death or dying well, is an action or omission which of itself or by intention caused death in order that all suffering may be eliminated. Euthanasia is more than killing pain, it is killing a person, a human being. Euthanasia or mercy killing should never be legalized. Euthanasia violates the divine, human, and medical laws. Moreover, it undermines the value of life, the value of each one’s earthly existence. Euthanasia is very much against the divine law. Both the Christian and Islam religions condemn it. Verses in the Bible, the holy book of Christians, and Quran, the holy book of Muslims, would prove how religiously unlawful euthanasia is. Daniel 13:53 of the Bible states that â€Å"The innocent and the just, thou shall not kill,† while Exodus 23:7 tells that â€Å"The innocent and just, you shall not put to death.† While the Quran says in chap. 6 verse 151: â€Å"Take not the life Allah made secret, otherwise in the course of justice.† In other words, we do not have a claim on death, but rather death has a claim on us. We are not the absolute masters of our life, only God is. He is the supreme master of life and we have no right to usurp His dominion. As defined, euthanasia is a means to eliminate suffering. It implies that all sufferings are meaningless. We should remember that it is through Jesus’ suffering that He triumphs. I am not saying that we should always welcome pains. What I am trying to express is that mercy killing undermines the part of suffering in our lives. Euthanasia deprives us, particularly the sick, an opportunity to grow in trust, faith, and strength. Instead of thinking of suffering as only ache and agony, we should look at suffering as a way to develop our character and as a test of courageousness. No one likes suffering, no one is willing to suffer, but suffering is inevitable, and so, we must learn to face and conquer it, not by any method of killing. Choosing euthanasia is just like accepting defeat against pain and suffering. Besides the divine law, mercy killing violates the International Code of Medical Ethics and the Hippocratic Oath. Both the code and the oath dictate that doctors have an obl igation to preserve human life from its moment of conception. Thus, a physician acts unethically if he intentionally and deliberately enables and individual to end his life. Legalizing and abusing mercy killing can bring many unlikely effects too. An example of which is the lessening of medical researches. The law has a powerful effect on the public’s conscience. When a practice becomes widely used and accepted, people tend to support it and cease to have strong feelings about it. An example is the euthanasia program in Nazi Germany. The conscience of doctors who were assigned to terminate lives became numbed. In addition to that, the program gained support from the crowd. The view of society on the protection of human life changed. If killing becomes allowed, terminally ill patients would realize that they have become a burden to their family. They would be more pressured to choose death. Allowing involuntary euthanasia can lead to abuse of opportunities by manipulating a patient’s consent. When a someone agrees to end the life of a dying incompetent adult or a minor, the process of ending the patient’s life is called involuntary eu thanasia. For example, an incompetent and very sick and old rich man is suffering from extreme pain and he is incapable of deciding whether to allow the doctor to perform mercy killing or not. His son, daughter, or whoever his heir to his riches is, will have to make a decision. And it is not impossible that this heir agrees to euthanasia, even though the patient disagrees, only because of desire for wealth. .ud11b3320e531bb29cc9b315bd6a0fce8 , .ud11b3320e531bb29cc9b315bd6a0fce8 .postImageUrl , .ud11b3320e531bb29cc9b315bd6a0fce8 .centered-text-area { min-height: 80px; position: relative; } .ud11b3320e531bb29cc9b315bd6a0fce8 , .ud11b3320e531bb29cc9b315bd6a0fce8:hover , .ud11b3320e531bb29cc9b315bd6a0fce8:visited , .ud11b3320e531bb29cc9b315bd6a0fce8:active { border:0!important; } .ud11b3320e531bb29cc9b315bd6a0fce8 .clearfix:after { content: ""; display: table; clear: both; } .ud11b3320e531bb29cc9b315bd6a0fce8 { display: block; transition: background-color 250ms; webkit-transition: background-color 250ms; width: 100%; opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; background-color: #95A5A6; } .ud11b3320e531bb29cc9b315bd6a0fce8:active , .ud11b3320e531bb29cc9b315bd6a0fce8:hover { opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; background-color: #2C3E50; } .ud11b3320e531bb29cc9b315bd6a0fce8 .centered-text-area { width: 100%; position: relative ; } .ud11b3320e531bb29cc9b315bd6a0fce8 .ctaText { border-bottom: 0 solid #fff; color: #2980B9; font-size: 16px; font-weight: bold; margin: 0; padding: 0; text-decoration: underline; } .ud11b3320e531bb29cc9b315bd6a0fce8 .postTitle { color: #FFFFFF; font-size: 16px; font-weight: 600; margin: 0; padding: 0; width: 100%; } .ud11b3320e531bb29cc9b315bd6a0fce8 .ctaButton { background-color: #7F8C8D!important; color: #2980B9; border: none; border-radius: 3px; box-shadow: none; font-size: 14px; font-weight: bold; line-height: 26px; moz-border-radius: 3px; text-align: center; text-decoration: none; text-shadow: none; width: 80px; min-height: 80px; background: url(https://artscolumbia.org/wp-content/plugins/intelly-related-posts/assets/images/simple-arrow.png)no-repeat; position: absolute; right: 0; top: 0; } .ud11b3320e531bb29cc9b315bd6a0fce8:hover .ctaButton { background-color: #34495E!important; } .ud11b3320e531bb29cc9b315bd6a0fce8 .centered-text { display: table; height: 80px; padding-left : 18px; top: 0; } .ud11b3320e531bb29cc9b315bd6a0fce8 .ud11b3320e531bb29cc9b315bd6a0fce8-content { display: table-cell; margin: 0; padding: 0; padding-right: 108px; position: relative; vertical-align: middle; width: 100%; } .ud11b3320e531bb29cc9b315bd6a0fce8:after { content: ""; display: block; clear: both; } READ: Antisocial Personality Disorder EssayOf all the effects, this is the most unlikely one. Killing would be more popular than caring. New mechanisms of killing would certainly be more popular, researched, and discovered than new processes of healing or curing. But killing should never be an option to relieve of pain. Medical researches should expanded and knowledge to health care must be added. When a life is weak, full of depression and pain, that life is most deserving of tender loving care. In short, killing should never be considered as care. We care for life, we do not end it. The thing which mercy killing undermines the most is the value of life. Euthanasia supporters d eclare that the life of a patient with an incurable disease is not anymore worth living. In contrast, a life not worth living does not exist. We have no right to judge someone’s life as useless. A human being is worth more than an entire physical universe. Human life has an infinite value. When we base the right to continue living on the quality of life, there is no logical place to draw the line. Scientific study published in the American Journal of Psychiatry shows that only one of four terminally ill patients are willing to die. It was proven that those who chose to die have clinical diagnosable depression. Effective therapeutic treatment is possible with these patients. Compassionate counseling and assistance, which are provided in hospices, as well as psychological care can prevent a patient to choose death. This will encourage patients to value more their lives. As a support, we must foster positive attitudes towards these people. Euthanasia should never be implemented. Legalization of it would only give way to numerous conflicts. It looks down on several facts and most of all, it is against God. What euthanasia only does is create sinners. People will violate laws and worst of all kill themselves and fellow human beings. Medicine Essays