How Do Men and Woman Communicate Differently?

How do men and woman communicate differently in relationships? Monique Giresi Professor Martin Analytical Reading 81148 I. A. How To Stay Married Anne Kingston Magazine Article B. He Said, She Said Deborah Tannen Magazine Article II. A. The magazine article titled, â€Å"How to Stay Married,† begins with a story about a 68-year old woman named Cynthia. The article has a narrative style of writing in the beginning, however as one reads on, the style converts to expository. Anne Kingston, the author, begins to teach the reader by using examples of others and personal experiences to support her point.B. The magazine article titled, â€Å"He Said, She Said,† is an expository piece of writing. Deborah Tannen, the author, is a professor of linguistics at Georgetown University, and the author or several books; proving that Tannen is very knowledgeable on this subject. Throughout the article there are many examples (such as pre-school children conversing) in which Tannen uses t o as proof, to show that man are more interested in hierarchy, and woman are more interested in equality. III. A. How To Stay Married * Stability 1. â€Å"†¦better health, a rich shared history, the comfort of having omeone who has your back, and personal and economic stability amid global uncertainty. † (p2) 2. Stability- To have a solid and strong balance or partnership. 3. Having my boyfriend by my side as a person to talk to when I was upset, gave me a great sense of the stability. * Amid 4. â€Å"†¦better health, a rich shared history, the comfort of having someone who has your back, and personal and economic stability amid global uncertainty. † (p2) 5. Amid- During a course of something. 6. I know that I’ll always have my family for support amid the stressful school year. * Rampant 7. †¦sexual secrecy in marriage is rampant, from a woman buoyed by the memory†¦Ã¢â‚¬  (p4) 8. Rampant- Uncontrollable rage. 9. When sitting in class during a discussion, it is rampant that I respond my opinion. * Infidelity 10. â€Å"Not that Krasnow is advocating infidelity, though flirting is fine†¦Ã¢â‚¬  (p4) 11. Infidelity- Adultery; cheating on your spouse. 12. In my house, we don’t believe in divorce, nor do we believe in infidelity. Therefore, we get married at an older age so we are sure the man/woman is worth the marriage. * Extramarital 13. â€Å"Unlike husbands, wives are driven to extramarital affairs†¦ (p4) 14. Extramarital-Having sexual intercourse with someone other than your spouse. 15. It is wrong in many religions for one to include themselves in extramarital affairs. ————————————————- B. He Said, She Said * Innumerable 16. â€Å"†¦sheds a light on innumerable adult conversations – and frustrations. † (p3) 17. Innumerable- Incapable  of  being  counted;  countle ss. 18. Some art has innumerable opinions on its meaning. * Fathom 19. â€Å"†¦he did exactly what she requested and cannot fathom why she would keep talking about a problem†¦Ã¢â‚¬  (p3) 20.Fathom- To understand; discover the meaning of 21. Many people cannot fathom the reasoning of some criminal’s actions. * Commiserate 22. â€Å"in other words, â€Å"topping† each other can be another way to commiserate† (p4) 23. Commiserate- To feel or express sorrow or sympathy for. 24. Everyday my mother calls my aunt and asks how she is feeling. She doesn’t do this because she should, she does it to commiserate my aunt. * Interplay 25. â€Å"How does this way of talking reflect the interplay of connection and hierarchy? † (p5) 26. Interplay- Circumstances, events, or personal relations. 7. How does practicing a sport from a young age reflect the interplay of performance later in life? * Inextricably 28. â€Å"The two are not mutually exclusive bu t inextricably intertwined. † (p7) 29. Inextricably- Extremely involved. 30. I am inextricably concerned with my schoolwork. IV. A. The magazine article titled, â€Å"How to Stay Married,† is written in a cause –effect pattern of organization. Authors who use the cause-and-effect approach don’t just tell what happened; they try to explain why it happened too. In this article, author Anne Kingston uses various examples of cause-and-effect.One sample from Kingston’s article is, â€Å"it’s precisely the disconnect between that expectation that husband and wife be everything to one another and the reality of marriage that causes women to keep secrets†¦Ã¢â‚¬  (p3) Here Kingston begins her statement with the effect and concludes it with the cause of women keeping secrets. B. The magazine article titled, â€Å"He Said, She Said,† is written in a comparison-contrast pattern of organization. Authors who use the comparison-contrast approa ch both; compare and contrast two things throughout the argument. In this article, author, Deborah Tannen uses several examples of comparison-contrast.One illustration from Tannen’s article is, â€Å"her point of view, asking directions means making a fleeting connection to a stranger and getting where you are going without losing anything. From his perspective, he would be putting himself in a one-down position to a stranger†¦Ã¢â‚¬  (p4). Here Tannen shows how opposite men and women think sometimes. V. C. How To Stay Married * Facts 1. â€Å"And what their stories reveal is that marital longevity requires wives to establish strong, separate identities from their husbands through creative coping mechanisms, some of them covert. (p2) Fact because there is proof within the book â€Å"The Secret Lives of Wives: Women Share What Its Really Like To Stay Married. † That book shares stories from different women, all proving this statement to be true. 2. â€Å"Both th e marriage rate and divorce rate are dropping. † (p3) Fact because the evidence to this is created from true statistics. D. He Said, She Said * Facts 3. â€Å"†¦men’s talk tends to focus on hierarchy†¦whereas women’s tends to focus on connection†¦Ã¢â‚¬  (p2) Fact because earlier the author explains that she has collected and analyzed thousands of men and women interacting for over three decades.Her gathered information has led her to this conclusion. 4. â€Å"†¦I have a brother named Benjamin and a brother named Jonathan†¦I have a brother named Benjamin and a brother named Jonathan, too†¦why she would say such a thing. † (p3) Fact because the father is explaining a conversation that really happened. VI. E. How To Stay Married * Opinions 5. â€Å"Divorce fractured families. † (p3) Opinion because there are cases in which a divorce can help the family. Sometimes it may decrease arguments and stress. 6. †¦couples sh ould give each other ‘space’ for marriage to thrive†¦Ã¢â‚¬  (p3) Opinion because some couples may feel that for a marriage to thrive the couple should be together as much as they could and share new experiences together as a whole, as one. F. He Said, She Said * Opinions 7. â€Å"†¦actual sibling relationships are defined not only by the connection of shared family, but also by the hierarchy of birth order. † Opinion because this is not true with every family. For example, I’m the youngest and my sibling and I feel equal among each other. We don’t see one another as higher, lower, better or worse. 8. Sisters often feel acutely competitive about who knows what about family member’s secrets-or who knows what first. † (p6) Opinion because this isn’t true for every sister relationship. For example, in my family we don’t have a preference with who knows what first, as long as eventually we all get to know the informa tion. Every family is different and every sister relationship is not alike. VII. G. The magazine article â€Å"How to Stay Married† by Anne Kingston discusses women’s role in modern marriages. There are several examples taken from the book â€Å"The Secrets Lives of Wives: What It Really Takes to Stay Married. This article also shares some stories of women committing adultery and Kingston provides some advice on the type of person one should marry. H. The magazine article â€Å"He Said, She Said† by Deborah Tannen discusses the different conversation styles of men and women. There are various examples proving that men’s discussion focuses more on hierarchy, and woman’s dialogue emphasizes more on connection. Some samples throughout the article include; a man and woman lost-wondering if they want to ask a stranger for directions or not, preschoolers playing with classmates, and sibling relationships.VIII. How Do Men And Women Communicate Differentl y In A Relationship? To start, men and women communicate differently in, or out, of a relationship. This is proven by Deborah Tannen in the magazine article â€Å"He Said, She Said. † Tannen explains that â€Å"†¦men’s talk tends to focus on hierarchy – competition for relative power – whereas women’s tends to focus on connection – relative closeness or distance†¦Ã¢â‚¬  (p2) Tannen enforced her statement by filming preschoolers and proving the same conclusion. From this, we learn that these characteristics within us humans are not learned.Instead, they are with us from our childhood and throughout life. Sometimes these opposite perspectives create conflict within a relationship. For example, if a couple is lost and in need of directions; the male would prefer to figure it out on his own and the women would wish to get to the destination as soon as possible. The man will feel overpowered by a stranger who knows where to go, while the woman would feel it’s reasonable to ask someone, in order to save time. In addition, women expect too much from their relationship.Sometimes they rely on their husbands for happiness. However, in the magazine article, â€Å"How to Stay Married† Anne Kingston explains, â€Å"wives who don’t rely on their husbands for happiness end up having the happiest marriages. † (p2) When women don’t feel the passion from their husbands they begin to feel lonely, and this leads to the unfortunate, adultery. Kingston reveals, â€Å"it’s precisely the disconnect between the expectation that husband and wife be everything to one another and the reality of marriage that causes women to eep secrets†¦Ã¢â‚¬  (p3) For example, if women were to talk about a problem she is having, she is looking for comfort, but the man may interpret that she is looking for a solution. Tannen explains, â€Å"†¦a man may well misread her conversational gambit as a r equest for help solving the problem. The result is mutual frustration: she blames him for telling her what to do and failing to provide the expected comfort, whereas he thinks he did exactly what she requested and cannot fathom why she would keep talking about a problem if she does not want to do anything about it. (p3) The communication difference between the opposite genders is inevitable. As Kingston writes, â€Å"you should marry someone who is flexible, confident and trusts you: if you can’t count on your husband or wife in a crazy unstable world then you’re marrying the wrong person. †(p5) IX. Works Cited Kingston, Anne. â€Å"How To Stay Married. † Maclean’s 10 October 2011: 6. Academic Search Complete. Web. 31 October 2011. Tannen, Deborah. â€Å"He Said, She Said. † Scientific American Mind May/June 2010: 8. Academic Search Complete. Web. 31 October 2011.

Critical response to ‘Z for Zachariah’ by Robert C. O’Brien Essay

The book I read is ‘Z for Zachariah’ by Robert C. O’Brien. I enjoyed this book because it contained few but excellent characters and is full of mystery and suspense. ‘Z for Zachariah’ is about a sixteen-year-old girl, called Ann Burden who thinks she is the only person to survive a nuclear war. However, as her diary entries progress, you learn of a person in a green suit who is pulling what looks like a trailer covered with the same green material as the suit approaching Ann Burden’s valley. Later in the diary you find out that the person is a man who had been an industrial chemist before the war, working for the Government designing a suit to protect people in the event of a nuclear explosion. His name is Mr Loomis and he is wearing the only one of these suits. When Mr Loomis finally arrives in the valley, he is amazed by the fact that there is water, which appears to be safe but Mr Loomis makes one severe mistake. When he checks the water for the level of radiation with his Geiger counter he in fact checks the clean water in the stream but then goes on to venture further down the valley, where he finds Ann Burden’s home where the polluted Burden Creek is nearby. Once Mr Loomis has seen inside Ann’s house (where Ann has cleverly hidden any clues that could show the visitor that there has been people living there recently) he then proceeds towards Burden Creek in the hope of getting his first bath in probably months. However, not realising that the stream and Creek are not connected and in fact the Creek runs into the valley from over the hill where the pollution is, he jumps right in. Within a very short period of time after Mr Loomis has had his bath he became very ill, as he had been exposed to a lot of radiation. When Mr Loomis becomes sick Ann then realises she will have to help him and that is when she first shows herself. Ann’s diary entries take you through the events that happen when she is and is not in the company of Mr Loomis. My favourite part of the book is the first three diary entries. In these diary entries Mr Loomis has not yet arrived in the valley however Ann has seen smoke from over the hill for three days, which she presumes is from a human made fire because it is in a thin column that it rises. The smoke comes at the same time everyday, in late afternoon. Each afternoon the smoke is nearer to Ann’s home. I like this part of the book the most because in it you find out what it has been like for Ann being alone for so long because her family left her to look for other people and had never returned. It is interesting to read Ann’s thoughts of being excited and scared that she may in fact not be the only person left in the world. It is obvious why Ann would be excited about someone else coming into the valley but maybe not so clear why she would be scared. Ann is scared because after the nuclear explosion some radio stations had still broadcasted, but towards the end of them broadcasting the presenters seemed to be going crazy. Here is a quote from the second diary entry which will explain why Ann is scared â€Å"Suppose a car came over the hill, and I ran out, and whoever was in it got out – suppose he was crazy? Or suppose it was someone mean, or cruel, and brutal? A murderer? What could I do?† After this quote, you realise that Ann is a very sensible and careful person because she decides to move her things to a cave nearby her home and make it look as though no one has lived in her house. That way she can watch whoever is coming into her valley and if they are crazy or mean she can stay in the cave unbeknown to the visitor and wait until they leave. At the end of the third diary entry Ann has still not seen anyone but knows that they are camping at the crossroads and exploring North, South, East, West and when they come into the South they will find Ann’s valley. The most remarkable character in the book I think is Ann Burden. She is careful, mature, kind, helpful, sensible, confused, and strategic/logical. In the following paragraph I will explain why Ann Burden is all of the things I have just said: The reason I think Ann is careful is because when Mr Loomis is first entering the valley she goes to the cave to live there as she does not know if Mr Loomis is ‘safe.’ During the book ‘Z for Zachariah’ you realise that in fact even though Ann is only sixteen she is more mature than Mr Loomis who is quite a bit older than Ann. The proof that shows this, is all of the words I am using to describe her and she also thinks about having children to begin the human-race again. The words kind, helpful and sensible describe Ann well because when Mr Loomis is ill with radiation poisoning she helps him and is kind to him even though he’s a stranger. Also Ann still helps Mr Loomis after he tried to rape her – she gives him half of everything i.e. eggs, milk and chicken and lets him have the comforts of her home while she moves into the cave. It is obvious that Ann is confused, as she does not know why Mr Loomis is being so horrible to her especially when she has done everything she can to be nice to him and to help him. The last words to describe Ann are strategic and logical; I think these words describe Ann well because when she does not want Mr Loomis to find her she thinks about what he can and cannot see e.g. when she builds a fire she thinks about where and how to build it so Mr Loomis can’t see it – she also thinks about what time of the day to light it. The style of ‘Z for Zachariah’ is in diary form. Throughout the book there were not many figures of speech, however, there were a few similes, here is a quote from the book that describes Ann’s dog Faro when he has returned from the dead lands where there is radiation, in it there is a simile â€Å"as thin as a skeleton.† The structure of ‘Z for Zachariah’ is in chronological order, each event happening in an order that makes sense and makes the story more intense and interesting. During the book, there is not much direct speech as the genre of the book is in diary form so it contains more of the thoughts and feelings of Ann Burden. The themes in the book are effects of modern technology, survival, dominance, bullying, age against youth, optimism/realism, breeding, art v science and religion v atheism. In the following sentences, I will discuss the themes that occur in ‘Z for Zachariah.’ The first theme ‘effects of modern technology’ is the theme that allowed the story to occur because nothing in the book would have happened had there not been a nuclear explosion. The themes of survival, dominance and age against youth are all linked together and are in a way very similar to each other. These three themes are perhaps the strongest and most occurring ones throughout the book, I will explain why: survival of course is going to be a major issue, Ann is the one who thinks about this the most having thought of growing her own crops, so when the supplies run out in the shop she will still have food to survive, and that is just one example. Throughout the book Mr Loomis tries to be the stereotypical ‘Alpha male,’ he wants everything to be done his own way and to be done by him. For example when Ann said she would go into the town with the safe suit to collect books, even though Mr Loomis is still ill he refuses to let her go, perhaps thinking she is incapable or he could have been worried she wouldn’t come back with the safe suit, although I think the first scenario is more likely. The only time Mr Loomis seemed to let Ann do things her way is when he could not do things for himself, however, he never admitted it. ‘Age against youth’ is another strong theme as throughout the book you realise that Mr Loomis even though he is older he is not always wiser and more mature, in fact Ann is definitely the more mature of the two characters. Optimism and realism are two words that can explain Ann and Mr Loomis’ completely different personalities. Ann being the optimist who thinks that the results of an action will always be good and Mr Loomis being the realist he makes decisions based on facts and not on false hope. Throughout the book breeding is a theme, but more with Ann – she thinks towards the future and beginning the human-race again. The theme of art v science is one that occurs throughout the book. As Ann is interested in art and Mr Loomis is interested in science, a few quarrels occur between them. However, ‘quarrels’ is perhaps the wrong word because Mr Loomis always seemed to get his own way. Again, I will use the example of when Ann wanted to use the safe suit to collect some engineering and physics books for Mr Loomis; she also suggested that she get some for herself. Such as poetry. Yet Mr Loomis refused and said, â€Å"You could not go. Understand that. Keep away from the suit. Never touch it.† After Mr Loomis had given Ann his lecture, she could not understand why he had become so angry. It was alright if he wanted something but as soon as Ann wanted something to do with her interests, it was too much of a risk. Religion v atheism is a theme in the book. Ann being the religious one and Mr Loomis the atheist. I don’t think Ann is strongly religious, I just think she finds going to the church and praying a ‘comforting factor.’ Earlier I said Mr Loomis is an atheist. This means that he doesn’t believe that any god or gods exist, therefore he does not understand why Ann would want to go to the church and ‘waste her time’ praying. I enjoyed this book because there were few characters, which allowed you to get to know them better. I also liked the style of the book being in diary form because you didn’t have to read the minute by minute accounts of what is happening in the book you only get to read the exciting and more intense parts which would be written in a diary. The thing that made the book a little boring was the fact that there weren’t many different figures of speech. The length I though was too long, some parts of the book seemed to be dragged out to give it a longer length, for example when Mr Loomis is sick the book got a little boring because in the diary entries you really were only told what Ann had did that day, there wasn’t enough character interaction. One thing that I thought ruined the book was the ending, I thought it was exciting when you were told that there was hope that there could be other people still living and you wanted to keep reading and know if there was anyone else out there, but it just stopped. Taking the entire book into account my opinion is that it is quite good as I think it gives a good insight into what could happen if there is a nuclear explosion – it is realistic.

HRD: Different Perspectives, Aims, and Objectives

Different paradigms present different perspectives of HARD (Human Resource Development) in terms of its aims and objectives. Consequently, it important to understand the different paradigms since each paradigm will have different approaches while solving HARD related problems. Experts advise that individuals build their personal beliefs regarding which paradigm suits his or her practice.In our context, It is best to divide HARD into two different paradigms, the performance, and the learning paradigm since they are definite. Moreover, the learning paradigm and the performance paradigm overlook most of the HARD practice as well as the thinking. The learning paradigm Is especially predominant In HARD practice In the United States of America. The learning paradigm and the performance paradigm are very dissimilar in many aspects. For instance, as the learning paradigm focuses on individual learning the performance paradigm focuses on the individual performance improvement.Learning paradig m of HARD is the field of study and practices that nature a long- term work-related learning capacity in an organization at all levels I. . Individual, organizational, and group levels. The performance paradigm of HARD is the art of realizing units of mission-related outputs. In addition, performance can be an organized system meant to accomplish a purpose or a mission. Though the two paradigms are diverse, they both agree on some aspects, for Instance they both agree that Improvement of organizations Is through human expertise.Different experts and philosophers hold different perspectives on the performance aspect. Performance can be as a natural outcome of humans' actively, reference is an important input in economic activities, or performance can also be a tool of oppression. There are different views held regarding then learning paradigm. Learning is a humanistic Endeavor, as it enhances the potential of human beings. Learning can also end up being an oppressive tool, for instan ce in the context of communism where learning is used to control the society.Learning is an instrument for the transmission of information needed by individuals. Nevertheless, it would be ignorant to draw that the two paradigms cannot converge since HARD operates best under Integration of the two. Chapter 8 Primary, the chapter Is about the theories on performance. Performance theory varies In comparison to the learning theory since It concentrates on teams, processes, organizational systems, and Individuals. Organizational effectiveness Is the mall precursor to performance and can be in different models.It can be a goal model, constituencies model. HARD is not the only discipline interested in performance and consequently analyzing HARD is normally on a basis on the different perspectives of performances. There are other different perspectives such as performance is a ultrasonically phenomenon. Performance models are of wide ranges of disciplines such as sociology, ethics, quality, psychology, and etcetera. Individual level performance models were because of HARD since; HARD has its foundation on individual learning.The models are the human performance technology and they try to define the common individual performance and the factors influencing individual performance. The financial performance entails the financial benefits of the HARD programs. Different factors influence the HARD profession such as the value-laden myths. Some of the myths are that the cost of HARD is high, it is impossible to quantify the benefits of HARD or that giving organizations the HARD they want is appropriate.Breaches enterprise model and Rumbles model provide integrated framework to achieve competitive advantage. Other common representative models are the John Campbell taxonomy and Thomas Gilbert's human performance engineering model. The integration of the performance models bring about new perspectives to HARD research, practice, and thinking. Chapter 9 This chapter focuses on the different perspectives of learning and the different preventative theories on learning in HARD.Learning is at the core of HARD and all debates ever carried out suggest that HARD embrace learning. The basic theories are six and include humanism, constructivism, holistic learning, social learning, behaviorism, and cognitive. These theories can apply in all the learning settings as well as for all age groups. Learning models can be at individual levels and at organizational levels. In the recent past, androgyny has been a theory of adult learning, a set of assumptions regarding adult learners, and a method of adult education.At individual levels is the androgyny that is a principal adult learning in HARD. On an adult learning perspective, it is a genuine trial to focus on the adult learner. Ontological model avails core standards of important and key hypotheses on adult learners. Another king of learning that is increasingly gaining attention is the transformational learning. This kind of learning is deep and requires the learner to challenge the fundamental assumptions and the mental schema they hold regarding the world.In relation to mental schema are restructuring, accretion, and tuning here accretion and tuning entails no change or incremental changes in an individual's schemata and restructuring involves creating a new schema. Organizational learning is learning that occurs at system level and not at individual levels. The main feature differentiating individual and organizational learning is that individual learning makes their mental models precise. HARD develops the knowledge for organizations to be competitive in the economy. Swanson. A, Hilton. F, Hilton, E. Foundations of Human Resource Development. London: Barrett-Koehler Publishers, 2001.

Value based purchasing Essay Example | Topics and Well Written Essays - 500 words

Value based purchasing - Essay Example This situation where we need to provoke health care employees to serve clients should change and they should voluntarily provide best care to their clients. Here, we intend to prove that, value added purchasing need to be eliminated as this destroys the commitment and voluntary assisting nature of health care employees. Logically, it is arguable that, the idea of permitting bonus to the health care employees to provide quality health care is non beneficial for the employers of health care industry. As pr (Porter)â€Å"Value based purchasing is, however, a critical external motivator in establishing a business case for why providers of care should embrace, leads, and implements the reengineering of healthcare delivery†. From a logos concept, health care professionals need to be concentrating solely on the idea of providing the best health care treatment to their clients as it is the ethical law of their duty When it comes to ethos, the focus is on the policies and statutory laws of the health care professional and industry. A health care provider, especially the nurses, by the nature of their professional law is liable to perform quality service as they work on ethics and moral standards. As per (Butt) â€Å"Historically, a primary value consideration in nursing ethics has been the determination of the focus of the nurses’ work†. On the other hand, the pathos concentrates on the emotional background, where the health care professional needs to understand the pain and suffering undergone by their clients and serve them with utmost care. The allotment of bonus to the health care professional is in real sense, blocking the development of their commitment to the job. Ultimately there is no need of a plan for quality service by health care professional as the job by its nature itself demands high quality. Today health care industry is a wide spread business, where the employers attempt to earn profit in a short cut manner. According to (Mathews)â€Å"Hospitals are

Systems Management and Security of Standard Chartered Bank Essay

Systems Management and Security of Standard Chartered Bank - Essay Example It is evidently clear from the discussion that Standard Chartered ranks among the top 20 companies in the FTSE-100 by market capitalization. It was formed in 1969 when two banks merged i.e. The Standard Bank of British South Africa which was founded in 1863, and the Chartered Bank of India, Australia and China, founded in 1853. Standard Chartered Bank always strives to Lead by example and be the right partner for its stakeholders. One of the objectives of the Standard Chartered Group is its commitment to building a sustainable business over the long term that is trusted worldwide for upholding high standards of corporate governance, social responsibility, environmental protection and employee diversity. IT, Security and the Banking system The increasing demand of account holders and the business industry has led to a change in the banking sector. Like many other industries, the banking sector is also affected by the impacts of information technological and technological advancements. Standard chartered uses a number of technologically advanced equipments to quicken the procedures involved in the banking work. It makes use of computers, internet, modern software for accounting and transactional processing and so on. In the recent year, online banking has also been established and promoted by the banking sectors. Standard Chartered Plc also proposed a trade platform for the users of its services called B2Bex. This platform is used by both sellers and buyers to perform the basic transactions online without any delays or necessary paperwork. This platform helps in maintaining the whole trade procedures by giving the opportunity to the buyers to locate a supplier and choose products, negotiate insurance and transfer finances. The software to combat hackers and misuse of customer information have also been incorporated in the IT infrastructure of most the banks. This helps in maintaining substantial level of security of information of the users. Standard Chartered wa s the first bank to introduce ATM during 1979 in Hong Kong. The IT Security Measures Here are some of the security features that standard Chartered has implemented: 1. Strong Cryptography is extremely essential as it is the process through which data is converted into scrambled code and sent across a public or private network and deciphered or unscrambled at the other end. There are two types of cryptography: Symmetric cryptography. Asymmetrical cryptography. Under Symmetric cryptography the same key is used for encryption and decryption. This method is vulnerable to plain text attacks and linear cryptanalysis meaning that they are hackable and at times simple to decode. Asymmetrical cryptography utilizes two different keys for the encryption and decryption of data. It is considered to be more reliable and secure. Hence keeping in line with the latest updates in cryptography, Standard Chartered Bank Online Banking is currently employing SSL 3.0, RC4 with 128-bit encryption (High); R SA with 1024-bit and Triple-DES encryption to ensure data (password) protection and data integrity protection. This form of cryptography used is among the strongest that is available in the industry.

Business Essay Example | Topics and Well Written Essays - 500 words - 8

Business - Essay Example Due diligence is a term commonly associated with such evaluation process. It refers to the care a reasonable person should take before entering into an agreement or a transaction with another party. It is an investigation or audit of a potential investment. Due diligence is a way of preventing unnecessary harm to either party involved in a transaction (Due Diligence – DD, 2009) Most of the investors will evaluate the past and present financial records of the company before taking decisions about the investment. So the entrepreneur must prepare such financial records of the company for the verification by the investors. An investor needs to be convinced about the financial capabilities of the company before taking decisions about investing. For that purpose the entrepreneur must present the financial history of the company in simple terms understandable to even a layman. An executive summary of the business plan is also required by the founders of the venture to convince the investors. It is only through this business plans the investor will know about how the company is going to utilize the money collected from them. The investors also must be convinced about the scope of the business and the market opportunities and hence the business plan must be well written in simple words to attract the investors. Some investors are keen in knowing more details about the company like the assets of the company, customers, environmental issues, foreign operations, legal matters, product issue, suppliers, tax issues, and matters relating to ownership change (Due Diligence Checklists, 2009) The current Investors are extremely careful in investing in shares and hence they will investigate about all the activities of the company before investing. They will analyze the future prospects of the company based on the parameters mentioned above. They know that if the

Juvenile Rights Essay Example | Topics and Well Written Essays - 750 words

Juvenile Rights - Essay Example orance is no excuse for a crime, ‎hence no matter what your age is or you were too young for a crime, even a juvenile can be ‎arrested and jailed for crimes. However there are many rules concerning this and many ‎authoritative cases suggesting how people under the age of ten are by no means allowed to be ‎jailed but in fact they can get other services such as community service as a punish. ‎ When arrested, a juvenile becomes either a status offender or has the responsibility for ‎some sort of wrongful conduct. Statuses offenses are when a juvenile commits some crime that ‎would not have been a crime if committed by an adult, such as curfew violation and runaway. ‎Alternatively, wrongful conduct can include offenses that violate penal laws other than some sort ‎of traffic violation. However, if you are under the age of 18 and somehow get in trouble with the ‎law, your case will be heard in the juvenile justice system.‎ Going back on the topic of discussion, we need to discuss what the rights of a juvenile ‎are. A minor commits a crime, but the law is still there and there are rights available for the minor. ‎Firstly there are rights available at the time of arrest. When a minor or a juvenile is taken into ‎custody, it is essential for the police to immediately notify the minors’ parents. The minor himself ‎is allowed to make two complete phone calls, has the right to a parent, and has the right to call a ‎attorney. At all stages in the jail and court, the minor has a right to his parents and an attorney. ‎Juveniles who commit a crime fall under the civil penal code, which is called the family code. ‎The main reason of separating the juvenile from the adult criminal justice system is for their ‎safety while providing and securing their rights. By law, juveniles are kept in separate and secure ‎facility. ‎ ‎ The Fourth Amendment states, â€Å"The right of the people to be secure in their persons, houses, ‎papers, and

Polyprod Change Management Assignment Example | Topics and Well Written Essays - 5000 words

Polyprod Change Management - Assignment Example Polyprod is a multinational company that designs; develops, manufactures and markets various high-tech products for both commercial and home use. The firm has been in operation for the last eleven years and has been experiencing exponential growth. The companies has it's headquarter at the United States and several centers located at Canada, Asia, Europe and Africa. The central or the headquarter division managers all the other centers in different location though the other centers have autonomy to make decisions. The firm has an elaborate and highly automated manufacturing process that allows for the huge production and makes the system operate at high speeds, intricacy and produce massive volume of the products sold. The designs are created at the headquarters while the production takes place at various aforementioned locations to exploit cheap labour and maximize on profits. The products manufactured are of high quality and must pass the quality control tests. In spite of all the success experienced by the company, there are many organizational problems hampering the growth of the firm. Some of these factors include organizational and leadership problems, resistance to changes in organizational culture, rapid organizational growth, documentation and human resources problems In the wake of these issu... The central or the headquarter division managers all the other centers in different location though the other centers have autonomy to make decisions. The firm has an elaborate and highly automated manufacturing process that allows for the huge production and makes the system operate at high speeds, intricacy and produce massive volume of the products sold. The designs are created at the headquarters while the production takes place at various aforementioned locations to exploit cheap labour and maximize on profits. The products manufactured are of high quality and must pass the quality control tests. In spite of all the success experienced by the company, there are many organizational problems hampering the growth of the firm. Some of these factors include organizational and leadership problems, resistance to changes in organizational culture, rapid organizational growth, documentation and human resources problems In the wake of these issues, the company hired an external consultant to streamline and improve the impeding management, organizational and leadership issues. The consultant will also make decisions on ways of improving the manufacturing and distribution division at Polyprod. 1.2 Problem statement The rapid development in Polyprod in the past 11 years has resulted to the company experiencing severe problems in the following main areas Inefficient and ineffective management and leadership practices The firm's unable to monitor the number of locations, sales, product lines and capital equipment which have increased exponentially. Polyprod Lacks proper personnel support systems such as information and knowledge management system. The firm has also hired temporary and in-experienced personnel who cannot handle and manage the growing

Loitering in Terms of the Criminal Law Assignment

Loitering in Terms of the Criminal Law - Assignment Example The assignment "Loitering in Terms of the Criminal Law" talks about the first amendment of the constitution that refers to the loitering and protects the due process clause "freedom to loiter for innocent purposes". In enactment of the ordinance proscribing loitering, it was intended that gangs were prevented from possessing dominion, over the public streets. Liability will only set in if an individual disobeys an order by a law enforcement officer, to disperse when asked to. As per the ordinance, the police have a duty of care to the residents, of maintaining peace and dispersing groups of individuals who inhibit it. Individuals must be protected from these gangs, as they induce fear to the extent that they are forced to remain indoors. In addition, they should be protected from threats, by these persons, which remain in one place without an apparent purpose, as they watch the residents’ movements and attack them at an opportune time. The USA Patriot Act was established, to curb and punish acts of terrorism and enhance law enforcement. Initially, the act dealt with international terrorism acts. However, domestic terrorism was added to the definition of terrorism. As provided in section 802 of the act. Any act that endangered human life, was a form of domestic terrorism. Despite criticisms on the provisions of the act, it provided determent against terrorism at the best interest of the citizens, if the terrorists actions, were intended to guide government’s policy, by intimidation or coercion.... tained, so as to help in supporting, conducting or concealing an act of terrorism and more so, if the property is derived from, involved in, or used to commit an act of terrorism. An assertion of a probability, of believing that an individual or an entity has committed terrorism against the country, residents or their property; calls for action and as such, any provision permitting the government to curb and punish such acts is not unconstitutional. If a person negligently fails to perform his duty of care, he/ she will be liable for damages. However, the plaintiff ought to prove beyond reasonable doubt, that he suffered loss as a result of the defendant’s negligence. Secondly, he must prove that he was within the scope of that duty, and lastly, prove that there was breach of duty, and as such, fair and reasonable to impose liability. The state statute will be held void for vagueness if it fails to justify the three conditions (Scheb, 2011). Courts are justified by all means, to impose a requirement that prosecutors prove the defendant’s intent to escape. Escape is the voluntary departure from custody. It is justified as escape, if without permission, the defendant, voluntarily leaves custody with intent to avoid confinement. Prosecution must prove that the defendant had no intent to leave and not to return. As such, intent would be held as proof of the crime of escape. In addition, the prosecution can bring forth evidence of threats and violence, as the cause for the action taken, which the jury considers. In such cases, the conditions necessitating the defendant’s departure must be relatively mild and alternative remedies such as consulting the wardens, put into consideration. The general principle, â€Å"justification by choice of lesser evil† provides that the

Learning and study skills Research Proposal Example | Topics and Well Written Essays - 3500 words

Learning and study skills - Research Proposal Example This test also revealed that as a teacher I tend to be care more about supervising my class (13% Leadership) and creating an atmosphere for fun and mentoring (11.4% and 11.6% Leadership respectively). As I thought about myself as a teacher I felt that this was accurate. I enjoy working with my students in ways that they need assistance but I also want to make sure that I have a disciplined classroom. In this way all children have a chance to learn. Interpersonal communication showed that I was more data oriented which did not surprise me because I am in the area of IT which is dependant on data. I am auditory in modality, prefer being the thoughtful observer and prefer hands on learning; this is probably the biggest reason I chose IT. One of the items I found interesting was that my philosophical methodology was both traditionalist and progressivist. I am not sure how these two work together but I thought it was an interesting point. I guess this is mostly because I believe that ever yone should do some type of work and that they should have some type of education to do it. I also feel that they must have moral as well as practical education and that science and math are essential to anyones education. I believe that all children should acquire skill in science and math for many reasons. Perhaps the progressivist in me is the part that likes to experiment in new methods of learning. It is not surprise then that my study skills should support my learning style.

Personal statement for medical residency Essay Example for Free

Personal statement for medical residency Essay Family residency has been my passion for a long time. This is not farfetched. I have been nursing an ambition to be a family physician for a very long time, this is unconnected with a series of experiences that I have had in the past. A few days before commencing my medical training in Poland, my mother had a major heart attack and she had to be admitted for emergency surgery heart bypass surgery. The way she was attended to by the medical personnel, especially the resident physician endeared me to this particular specialty. Moreover, my experience in the medical school was a pleasant one as I learnt to deal with real life situations as they occur. i enjoyed rotating through all the units. However, the one rotation that i still cherished most was that on Family Medicine. Working with the consultants also had a lasting impression on me as I also learnt how to interact with diverse groups of individuals, from the infants to the aged. This experience was one that i would always remember because of the potential inner satisfaction that I could derive from being a Family Physician. I foresaw a future where I would be able to forge long term relationships with people with the aim of improving their health and contributing to their healthy lifestyle. This dream will be achieved if I am accepted for this residency program. I have been opportune to traverse many countries in Europe including Poland, where had my medical education. I have seen people suffer from lack of adequate medical attention. I had some clinical rotations in Chicago in a medically underserved area. This made me see people that would otherwise not have suffered had it been that they have adequate medical attention. My teachers have been my role model all the while, tutoring me for the challenges ahead. I want to be able to affect the lives of people positively in way of being their physician. I have a strong passion for this specialty. I strongly believe that this residency program will further improve my skills at becoming the physician I have always wanted to be. The total health of the patient is my concern – not only their medical health but also their emotional well being. I want to be an excellent family Physician.

Postmodern tendencies in American TV Essay Example for Free

Postmodern tendencies in American TV Essay Television scholars have observed that in the past twenty years American popular television has undergone a major transformation in style and form. John Thornton Caldwell uses the term televisuality to signify a development in the images running through the small screen. Such a shift in form and presentation developed alongside contextual factors. Caldwell explains his view in detail: Starting in the 1980s, American mass-market television underwent an uneven shift in the conceptual and ideological paradigms that governed its look and presentational demeanor. In several important programming and institutional areas, television moved from a framework that approached broadcasting primarily as a form of word-based rhetoric and transmission†¦to a visually based mythology, framework and aesthetic based on an extreme self-consciousness of style. (1995, p. 4) This emphasis on style is predicated on reconceptualizations of form and presentation in television, consequentially changing production and labor practices: With increasing frequency, style itself became the subject, the signified, if you will, of television. In fact, the self-consciousness of style became so great that it can more accurately be described as an activity—as a performance of style—rather than a particular look. (1995, pp. 4 -5) Televisuality is more than a historical phenomenon; it is also a discursive product. The ramifications of televisual style are brought about by business conditions, technology and audience reception, as well as intended changes in industry and aesthetic practices. Certainly there are factors unique to this contemporary trend, but Caldwell is quick to point out that televisuality is not some original invention that does not have historical precedents. It can be traced from a long history of â€Å"aesthetic posturing†; that is, stylization has been a regular artistic practice in television production that has snowballed, albeit unevenly, into what mass-market television has become of date. Furthermore, stylization is tied to a much broader landscape—to processes of transformation in mass media and American popular culture. Caldwell’s approach, that of historicizing and contextualizing stylization, necessarily leads to another aspect—its ideological implications. Given the rather broad conceptualization, instead of offering one sweeping definition Caldwell identifies six principles of televisuality (pp. 5-10). These principles are explored in-depth in his seminal work, Televisuality: Style, Crisis and Authority in American Television. I shall enumerate them and briefly explain the author’s ideas in the paragraphs that follow. Even though these tenets were discussed with special reference to the 1980s, the era that signaled the major turn in television’s presentational format, I will nevertheless explain them with the presumption of their universal (non-time bound) applicability. 1. Televisuality was a stylizing performance—an exhibitionism that utilized many different looks. According to Caldwell, televisuality is a â€Å"presentational attitude† that emphasizes exhibitionism. Exhibitionism is evinced through the use of different existing visual looks and stylizations, leading to different of â€Å"guises†. This means that the conventional genres of presentation and format are less evident. The constant â€Å"experimentation† and blurring of boundaries make for a certain visual spectacles. 2. Televisuality represented a structural inversion. If before television shows prioritized subject over style, and the visual packaging of the image was relegated to the background, beginning in the mid-1980s some shows placed style on the foreground. This practice is not simply a positional swap. Style or the presentation of the image, Caldwell clarifies, is the subject, or in other words, is significantly tied to the text itself: â€Å"(S)tyle was no longer a bracketed flourish, but was the text of the show† (p. 6). To analyze the televisual text is to articulate to the act of presentation of the subject itself. 3. Televisuality was an industrial product. The third principle refers to an important foundation of televisuality—the mode of production. For Caldwell, televisuality—including the â€Å"presentational guises, the narrative forms, and the politics of mainstream television† (p. 7) stems from the technological and production developments, some of which result from specific cultural and economic needs. At the same time, the production base evinces particular audience attitudes and responses. 4. Televisuality was a programming phenomenon. As stated earlier, televisuality is a product of television history; it has its precedents. Exhibitionism and spectacle is not an entirely unique phenomenon; what is unique is the manner in which â€Å"showcasing† is done by broadcast networks. Another example is the presentation and branding of some shows as â€Å"special events†: Programming designed around special-event status was also not entirely new, although the kind of prestige and programming spin that special events offered threatened to dominate television by the late 1980s. † (p. 9) Thus, today the viewer finds â€Å"exclusive† news coverage commonplace in news and public affairs shows, and there is a saturation of â€Å"reality† game shows documenting the lives of ordinary people desperate for instant fame and fortune. 5. Televisuality was a function of audience. Caldwell notes how television audiences have become more varied in terms of taste and preferences. Audience response, from his view is both manufactured by networks, as well as a function of agency. As the cultural literacy of audiences is developed across different social segments, audiences’ sensibilities are also trained by the continuous development and revision of shows on television. For example the introduction of video games in the mass market in the early 80s profoundly shaped young people’s lifestyles. Meanwhile, television makes use of technological developments like the videogames to reinvent the stylistic wheel, so to speak, in turn orienting audiences towards developing new viewing pleasures. 6. Televisuality was a product of the economic crisis. In the 1980s, mainstream networks were stunned by the popularity of cable viewing. Caldwell believes stylistic showcasing is the mainstream networks’ approach to â€Å"protect(ing) market share† as the business conditions became more competitive. While Caldwell focuses on stylistic (re)presentation in contemporary American television, another scholar, Jason Mittell (2006), focuses on developments in television genre and narrative. Mittell uses the concept of narrative complexity to approach the intertextual tendencies of television serials. Following his work that posits a cultural approach to genre study (A Cultural Approach to Television Genre Theory, 2001), Mittell insists that popular American television should be broadly understood as a product of cultural, historical, and structural forces. New trends in genre development should be examined alongside contextual factors – network business outcomes, shifts in industrial and artistic practices, technological innovations, and audience tastes and responses. Additionally, narrative complexity should be approached as a cultural phenomenon. Mittell’s critical perspective shares with Caldwell a broader view of television studies, whereby context is read into particular aspects of the text (style/stylization, genre, narrative). Like Caldwell, he also situates the unique formal qualities of the narrative within structural and historical developments in production, circulation and audience reception. Perhaps in anticipation of Mittell’s view, Caldwell (1995) also suggests that one way of analyzing the form and functions of televisuality by comparing earlier conventional genres and more recent attempts to incorporate stylistic embellishment and exhibitionism (p. 18). Mittell observes that narrative complexity is a striking feature of some of today’s popular television fare, offering an alternative to earlier conventional formats. Mittell takes after film scholar David Bordwell with the view that the term encompasses a particular set of â€Å"norms of narrational construction and comprehension† (Bordwell cited by Mittell, 2006, p. 29), which combines different genres, movements and creators in coming up with a coherent whole. These features are drawn from cinema as a reference, however, and thus Mittell also points out that while cinematic techniques over the last decade have also shaped the television narrative in certain ways (for instance, the crossing-over of film auteurs and practitioners to the small screen have brought about a new breed of â€Å"quality television† or â€Å"intelligent† serial programs; filmic intertextuality, or the combination of other media like novels and comic books in making films), contemporary television storytelling style should still be examined according to the medium’s unique features, structures, history and language (p. 29). Mittell also adopts what he calls a â€Å"historical poetics† in his definition of narrative complexity an approach that invites the reader to go beyond the borders of the text. The textual features should be read in conjunction with particular socio-historical contexts—industry and production trends, technological developments, and changing audience behaviors, and the like. Awareness of the influence of specific contextual factors assumes that narrative development is not an isolated textual whole but a product of external factors. Mittell then traces the rise of narrative complexity in the television. Most of the television practices he cites are more or less synonymous to factors that also brought forth the era of televisuality, which Caldwell pointed out. For instance, Mittell explains how the appeal of the small screen captivated film creators and professionals who started out in the film industry. David Lynch (Twin Peaks), Allan Ball (Six Feet Under), and Joss Whedon (Buffy the Vampire Slayer, Angel) are notable examples. Part of the attraction is that television, being a â€Å"producer’s medium†, creators gain more authority and leverage compared to the director-centric film production (p. 31). Modes of television viewing also compelled networks to re-strategize programming practices and schedules. Beginning in the mid-80s the popularity of serial narratives gradually declined. It was found that audiences lacked the sustained attention for weekly serials. A relatively new kind of practice, the syndication of TV programs became a major challenge for networks, as it gave audiences more elbow room to view episodes of their favorite shows without having to follow a fixed weekly schedule. Another trend that Mittell observed in terms of reception is the increasing diversity of audiences. As new broadcasting companies and channels add to the media clutter, they develop shows that cater to certain demographic brackets or attuned to specific cult followers in order to compete with established networks like CBS and NBC. As always, technological innovations impact significantly on television. For Mittell, the television industry easily latches on the latest technology to advance aesthetic and production purposes. As an example, one of the most recent developments that single-handedly changed the cultural landscape is the Internet. Television cashed in on this new technology by putting up fan sites and â€Å"official† TV program sites. These sites extend television viewing, as they enable followers to do a range of activities (discussion of episodes with other viewers, purchasing of merchandize, research information about the show) in relation to the show itself. The postmodern turn in television The above discussions can be subsumed to the overarching theoretical paradigm called postmodernism. Televisuality and narrative complexity can be regarded as actual structural features and dynamics that demonstrate the postmodern condition in the realm of television. Several of the features and themes that characterize postmodernism, charted by Jim Collins in â€Å"Television and Postmodernism† (1997) resonates with the definitions of televisuality and narrative complexity proffered by Caldwell and Mittell. For instance, Collins discusses how postmodernism is predicated on the proliferation and circulation of signs or images, in part propelled by the latest technology (cable, VCR, digital technology, the Internet) (p. 193). The bombardment of images, all of which demand the viewer’s attention, eventually effaces meaning. The primacy of the image is also an attribute of televisuality, especially in its claim that style is the text/signifer. In addition, there is also the logic of excess that in televisual parlance translates to excessive style. Eclecticism seems to be a commonplace notion in discussions of televisuality and narrative complexity. In the latter, the employment of various styles in the process of expermentation or stylization is a form of eclecticism; in the latter, the cross-fertilization of differing genres. Related to this is intertextuality, the use or borrowing of various formats resulting in the blurring of boundaries, or the reorganization of genre or style hierarchies. Though features of conventional prototypes may still be recognizable in a given text, their combination or recombination attracts the viewer’s attention more distinctly. In this paper I will attempt to show what is postmodern in American television. Many accounts of postmodernism dabble in excess themselves, and fail to anchor much of the claims in empirical realities. I believe that what postmodernism articulates in theory is more acutely contained in the concepts of televisuality and narrative complexity. Thus, while the critical perspective employed here remains to be postmodernism, my analysis uses more empirical conceptual handles.

Popular Methods for Pricing American Options

Popular Methods for Pricing American Options Chapter 1 Introduction American options are financial derivatives, an instrument whose value is derived from an underlying asset, usually a stock. Black and Scholes (1973) described an option as: a security giving the right to buy or sell an asset, subject to certain conditions, within a specified period of time. The main question of this dissertation is how American options can be valued. The option value is only known with certainty when the option is exercised, either at maturity or not. When the owner decides to exercise the option or it is the option maturity time, it is possible to determine the price of the option as the strike will be exchanged by the asset in the case that the conditions are favourable for the owner of the option. When the one buys the option, she does not know what will be the future price of the underlying asset, and assuming it follows a random process it is hard to put a price on such contract without knowing what will be the price change. This non linear feature of the option makes calculating the price to pay for such contracts a challenging process and has been the focus of a large number of financial studies and publications. This dissertation deals with the most popular methods for pricing American options and their implementation in MatLab ®, including a graphic user interface. The methods studied include the Black and Scholes (1973) European option pricing as the starting point, followed by the Barone Adesi and Whaley (1987) analytical approximation. Then the binomial and trinomial lattice methods presented in Cox, Ross and Rubinstein (1979) are considered also as the Finite difference approximations models AAA. The most sophisticated method is the Least Squares Monte Carlo simulation presented in Longstaff and Schwartz (2001). The analysis of the different option pricing methods in this dissertation follow most of the assumptions made by Black and Scholes (1973), the short term interest rate and the dividend are assumed to be known and constant, the underlying stock follows a log normal distributed geometric Brownian motion, the markets are frictionless and finally it exists the possibility of forming a riskless portfolio, consisting of the option and underlying stock. The dissertation is organised as follows: a brief literature survey is provided in the next Chapter. The analytical approximation method and the numerical methods used are described on Chapter 3 and their implementation in Matlab environment is given in chapter 4. Numerical results are given in Chapter 5. The conclusion and future developments are presented in Chapter 6. Chapter 2 provides a survey of some of the most relevant publications in American Option Pricing, with focus on analytical approximations, lattice and finite difference methods, more precisely, binomial and trinomial trees, explicit, implicit and Crank Nicolson Scheme, and also on Monte Carlo Simulation. Chapter 3 provides a description of the methods used, their advantages, disadvantages and limitations. Here the required equations will be derived and the solution for the pricing of American options will be provided. Chapter 4 focus on the algorithms used and their implementation on the MatLab environment, also as the procedures for the development of the GUI for easier user interface. On Chapter 5 results and their comparison are shown for the different methods used, with the required figures to support the numerical answers. In the final chapter the dissertation is concluded and a summary of the findings is provided, also as with further work on this subject. Chapter 2 Literature Survey Black and Scholes (1973) and Merton (1973) developed the first analytical closed form solution for the pricing of European type options and certain types of American options, such as American call options on non dividend paying stocks. The option pricing model developed by Black and Scholes and extended by Merton gives rise to partial differential equations governing the value of an option Schwartz (1976). Black and Scholes (1973) develop their model on the basis of the no arbitrage theory, If options are correctly priced in the market, it should not be possible to make sure profits by creating portfolios of long and short positions in options and their underlying stocks Black and Scholes (1973). The Black and Scholes (1973) model valued European options on non dividend paying stocks, and with a number of quite restrictive assumptions, constant and known interest rates, the markets are frictionless with no transaction costs and penalties for short selling. The Black and Scholes (1973) model also assumes that the underlying stocks follow a random walk. Due to all this assumptions the pricing model Black and Scholes (1973) proposed was of easy use, and there is only the need to input the required values on the proposed pricing equation. The model they have proposed does not take into consideration early exercise of the option so it is inaccurate for pricing American Options. One of the most popular analytical approximation models that starts from the Black and Scholes (1973) model and adjusts it to consider the scenario of early exercise strategies is the work by Baron Adesi and Whaley (1987) which was based on the paper by MacMillan (1986). Baron Adesi and Whaley (1987) consider that the Black and Scholes (1973) partial differential equation must apply to the early exercise premium as this is just the difference between the American and the European option prices, which are also priced by the same partial differential equation. After some transformation they end with an easily solvable through an interactive process second order differential equation. When closed form solutions, like the Black and Scholes (1973) valuation model cannot be derived, numerical methods must be developed. These are computational methods where the values for the underlying assets are modelled up to maturity and the price of the options is derived from them. In the case of American options this is a complex process, as the modelled price changes may have to be adjusted to include dividend payments and the derivation of the option price must also include the possibility of early exercise. Cox, Ross and Rubinstein (1979) developed a simple discrete time lattice model to deal with the complexity of option valuation, as they considered the methods of Black and Scholes (1973) quite advanced and have tended to obscure the underlying economics Cos, Ross and Rubinstein (1979). The use of lattice models such as the one by Cox, Ross and Rubinstein (1979) is the simplicity of its application. The most significant drawback of the Cox, Ross and Rubinstein (1979) model, is to increase its accuracy the number of time intervals must increase, in order to approach a continuous time model, which will significantly increase the computational time, needed for processing the entire tree in order to derive the option value. Others such as Hull and White (1988), (1993) and Trigeorgis (1991) have extended the model of Cox, Ross and Rubinstein (1979). Hull and White (1988) present a study of the use of lattice models for underlying assets with known dividends instead of known divided yields. They also consider the use of a control variate to price a option numerically, by a the lattice model, using the price of a similar option calculated analytically. While Trigeorgis (1991) proposes a log transformed variation of binomial option pricing designed to overcome problems of consistency, stability and efficiency encountered in the Cox, Ross and Rubinstein (1979) focusing on the pricing of exotic options. Hull and White (1993) also present an application of binomial and trinomial procedures for exotic path dependent options, where they developed a model faster than Monte Carlo simulation and faster than other numerical methods. Usually the analytical procedures are applicable to simple payoffs of the American Options, but in the cases where this is not possible numerical solutions must be developed. Geske and Shastri (1985) give a detailed comparison of the lattice methods to the different numerical methods, finite difference methods and other simulation methods. The model proposed by Brennan and Schwartz (1978) for valuing options was the first approach that used the finite difference method. This approach was used due to the fact that most of the times an analytical solution for the option pricing problem does not exist. The finite difference method uses the heat equation derived from the Black and Sholes PDE to obtain an approximation of the option price. Courtadon (1998) goes further to reduce the approximation error of the Brennan and Schwartz (1978) model but only applies his findings only to simple option pay offs. Geske and Shastri (1985) give a good description of the finite difference method: The finite difference technique analyze the partial differential equation () by using discrete estimates of the changes in the options value for small changes in time or the underlying stock price to form equations as approximations to the continuous partial derivatives. Usually the approximations is done using forward, backward or central difference theorem, which respectively result in the explicit, implicit and Crank Nicolson schemes, the procedure used in this study will be shown further in the paper. In this case as with most of the methods for pricing options, the most significant drawback is the duality between accuracy and processing time. In order to increase accuracy the time and stock change steps must be smaller, increasing their number and the number of computations to make, this issue also affects the stability and convergence of the methods. Another approach used for solving the option pricing problem, especially for path dependent American options is the use of simulation. This means that the option price is derived from a simulated underlying asset price, usually using a Monte Carlo simulation method. Boyle (1977) and Schwartz (1977) pioneered the use of Monte Carlo simulation which is nowadays used to price complex options contracts. The Monte Carlo simulation method is very powerful in terms of its flexibility to generate the returns of the underlying asset of the options, by changing the random variables used to generate the process a new returns distribution may be easily obtained, Boyle (1977). Boyle (1977) introduces the Monte Carlo technique for pricing European option where there is a dividend payment, but Schwartz (1977) was the true pioneer, pricing American options, with the underlying asset paying discrete dividends, and also deriving an optimal strategy for early exercise of the option, which is the crucial point for pricing American type options. Schwartz (1997) focused on a particular type of contract, warrants, so in fairness his first model is not exactly on an American type option. Tilley (1993) was one of the first to fully focus on the pricing of American option using a Monte Carlo simulation method as he mentioned that simulation methods were reserved for exotic options or other complex debt products. His findings are only applied to American options on non dividend paying stocks, but he develops an important part of the model which is the optimal early exercise option. Carriere (1996) presents a development of the Monte Carlo simulation method presented by Tilley (1993). The paper by Carriere (1996) presents a model where the optima early exercise strategy is based on conditional expectations of Markov processes by carrying a nonparametric regression on the simulated underlying asset return paths. Brodie and Glasserman (1997) extended the previous studies by considering an upper and lower converging bounds of the option price. These estimated bounds are calculated using a high and a low bias, which Combining the two estimators yields a confidence interval for the true price. Brodie and Glasserman (1997) One of the most important papers, and probably one of the most used ones, is the paper by Longstaff Schwartz (2001). Their Least Squares Monte Carlo (LSM) valuation model is very simple and straight forward which combined with the accuracy of the method made it famous. Their greatest advance can be described as: The key to this approach is the use of least squares to estimate the conditional expected payoff to the option holder from continuation Longstaff Schwartz (2001). They applied their model to a series of exotic path dependent American options with great success. Chapter 3 Pricing American Options Methods 3.1 Asset Prices Models The Black and Scholes (1973) and Merton(1973) pricing methods which are the basis for most of this paper assume that the stock returns follow a Geometric Brownian motions, with the stock prices log normally distributed. The stock returns can be represented by the following stochastic differential equation, (3.1.1) Where St is the asset price at time t, is the assets expected return, is the assets instantaneous volatility and Wt is a Wiener process. 3.2 Analytical Approximation by Barone Adesi and Whaley (1987) Barone Adesi and Whaley (1987) developed a method to approximate analytically and easily the price of American options. They considered that the American and European option pricing equation is represented by the partial differential equation (3.2.1) developed by Black and Scholes (1987) and Merton (1987), (3.2.1) Barone Adesi and Whaley (1987) assumed that if this is true, then the early exercise premium of the American option, which is the price difference between the American and the European call option prices (3.2.2), can be represented by the same partial differential equation (3.2.3). (3.2.2) (3.2.3) The above equation after some transformation, shown on Barone Adesi and Whaley (1987) paper, and applying an approximation of a term tending to zero, yields the following quadratic equation, (3.2.4) Where (3.2.5), (3.2.6) and (3.2.7). Equation (3.2.4) is a second order ordinary differential equation with two linearly independent solutions of the form . They can be found by substituting (3.2.8) into equation (3.2.4) Barone Adesi and Whaley (1987), (3.2.9) With a general solution of the form, (3.2.10) When the American option boundary conditions are applied to the above solution and considering , then must be equal to 0 as when the asset price tends to zero so does the option price, resulting in the following American call option pricing equation, Barone Adesi and Whaley (1987), (3.2.11) From (3.2.9) we have the value for so the only value missing is . This can be calculated interactively considering another boundary condition of American call options. We know that in early exercise the payoff will never be higher than S X, so from a critical underlying asset value the option payoff curve must be tangent to the S X curve, which means that below the critical asset value the pricing equation is represented by (3.2.11), Barone Adesi and Whaley (1987). The algorithm presented by Barone Adesi and Whaley (1987) for the above pricing problem is presented further in the paper in the section dedicated to the implementation of the American option pricing models. 3.3 Lattice Methods Cox, Ross and Rubinstein (1979) proposed a model where the underlying asset would go up or down from one time step to the next by a certain proportional amount and with a certain probability until maturity. Due to the up and down characteristic of the asset price model these type of models are characterised by a binomial tree or, in the cases of the existence of a third possible movement, they are characterised by a trinomial tree, therefore named as Binomial or Trinomial models The price of the option would be recursively derived from maturity, due to the boundary condition as has been referenced before that the price of the option is only known with certainty at maturity. This means that the price of the option is calculated at maturity and recursively at each node up to the initial value, by discounting backwards at the risk free rate and respective probabilities. Due to the characteristic of American options, the model has to check if it is optimal to exercise the option at each node or if it has the advantage to continue to the next one, for example on the case of dividend payments. In the case that it is optimal to exercise the option at a certain node, its price will be equal to the intrinsic value at that same node. Every node will be checked for the optimality of exercising the option or not, until we have reached the initial point where we want to price the option. 3.3.1 Binomial Tree Model The model starts being built for a American option of a non dividend paying stock and after that the scenario of dividend payments and optimal early exercise strategy is considered. As referenced before the stock goes up and down by a certain amount form one period to the next, if u is the up movement and d the down movement, then they can be calculated as, (3.3.1.1) and (3.3.1.2) as in Cox, Ross and Rubinstein (1979). In no arbitrage conditions it is possible to calculate the probability of the up and down movements, with the up being defined as, (3.3.1.3) where from the definition of probability and the down movement as (3.3.1.4). The tree formed using these specifications from Cox, Ross and Rubinstein (1979), can have the following graphical representation The option is price is calculated from the asset price binomial tree. The maturity boundary condition for an American option, is that the payoff is equal to , we already have S at each maturity node from the asset price model, so we can calculate backwards the price of the option as the expectation of the future payoff of the option. At each node we calculate the expectation of the future payoffs, where the price of the option will be a compound of expectations. These can be represented by the multi period case for a call as in Cox, Ross and Rubinstein (1979), The option prices are calculated as the expectation of the options future payoffs using their respective weighted risk neutral probabilities of an up movement and a down movement and then discounted at the risk free rate r. The Binomial value is found for each node, starting at the final time step, and working backwards to the

Mystification :: essays research papers

Mystification  Ã‚  Ã‚  Ã‚  Ã‚     Ã‚  Ã‚  Ã‚  Ã‚  In Berger’s essay, he uses the term â€Å"mystification†. Mystification is one way to set out describing the ways in which people perceive what they see. When people look at same painting or advertisement, they perceive and interpret differently. As John Berger says, â€Å"we are always looking at the relation between things and ourselves† (156). We see things differently from one another and in the beginning we see things, but without language and understanding, we cannot explain what it is we see. The way we see things is predetermined by different factors such as our own experiences and status. Berger provides an example two paintings by Frans Hals. The two paintings are picture of a group of governors and a group of governesses. The paintings imply that how our society has emphasized an upper class at the period. And, high status people control the people’s view. As Berger says, â€Å"the art of the past is being mystified because a privileged minority is striving to invent a history which can retrospectively justify the role of the ruling classes, and such a justification can no longer make sense in modern terms† (157). The upper class mystifies us to stay in control; without being able to see things in our own way, we are being deprived from our right to understanding ourselves and placing ourselves in a role of society. The â€Å"privileged minority† mystifies works of art in order to control people’s view. Berger explains how Hals becomes after he painted the two paintings. According to Berger, â€Å"he obtained three loads of peat on public charity, otherwise he would have frozen to death. Those who now sat for him were administrators of such public charity† (158).

Confucianism - Filial Piety in Chinese Religion Essay -- Philosophy Es

Filial Piety in Chinese Religion Filial piety was an integral part of Chinese culture and therefore was embraced by three of China's main religions: Confucianism, Buddhism, and Daoism. Among the three, Confucianism, with its well documented social hierarchy, supported the ideals of filial piety the most. Buddhism and Daoism also supported filial piety in some of their texts, but had monastic systems that prevented monks and nuns from being filial children. The term filial piety refers to the extreme respect that Chinese children are supposed to show their parents. It involves many different things including taking care of the parents, burying them properly after death, bringing honor to the family, and having a male heir to carry on the family name (Brians 1). Practicing these ideals is a very important part of Chinese culture. Therefore, one would expect that filial piety would be incorporated into the major religions of China as it has been. The ideal of respecting and behaving properly towards one's parents fits perfectly with Confucianism's ideal of respecting and behaving properly towards all elders. Confucius himself addressed the subject in the Analects: When your father is alive observe his intentions. When he is deceased, model yourself on the memory of his behavior. If in three years after his death you have not deviated from your father's ways, then you may be considered a filial child. ("Confucian Teachings" 20). According to Confucius, respect to one's father while he is alive is a given -- something that even animals do. But, to be a filial child, one must respect his parents even after their death. Confucius goes on to cite further specific examples of what a filial son should do for his parents. Am... ...oist monk can not be a filial son. Works Cited Brians, Paul. "Examples of Filial Piety." 1998. Washington State Univ. 23 Feb 2003. Brians, Paul. "Examples of Filial Piety." 1998. Washington State Univ. 23 Feb 2003. <http://www.wsu.edu:8080/~wldciv/world_civ_reader/world_civ_reader_1/filial.html> Hallisey, Charles. "Auspicious Things." Religions of Asia in Practice. Ed. Donald S. Lopez, Jr. Princeton: Princeton Univ. Press, 2002. 237-251. "Book of Rewards and Punishments." Chinese Civilization: A Sourcebook. Ed. Patricia Buckley Ebrey. New York: The Free Press, 1993. 142-145. "Confucian Teachings." Chinese Civilization: A Sourcebook. Ed. Patricia Buckley Ebrey. New York: The Free Press, 1993. 17-26. "Precepts of the Perfect Truth Daoist Sect." Chinese Civilization: A Sourcebook. Ed. Patricia Buckley Ebrey. New York: The Free Press, 1993. 146-150.

Pressure Groups Essay -- Politics, Public Engagement

Introduction Pressure groups are known to be small and extremely diverse formed on the basis of interest and activities, their functions give them a high public profile where minds are influenced and driven to make change. â€Å"A Pressure group is an organisation which seeks to influence the details of a comparatively small range of public policies and which is not a function of a recognised political party† (Baggott, 1995: p.2). An aim of pressure groups is to generate support which can influence political agendas; this can directly persuade the government to consider taking action. In this essay I will concentrate upon exploring on various issues on pressure groups, discussing the relationship between the groups, their use of the media and their status as â€Å"insiders† and â€Å"outsiders† in the political process. Pressure groups have two main types of groups the insiders and outsiders which each promote a common cause with a different relationship with the media and political party making one as an unheard voice in the public sphere. To the public Pressure groups is another form where the public can engage in politics, participating directly in the political process. I will also intricate in this essay the arguments against pressure groups from the New Right perspective to the Neo pluralist perspective as well as the growths of pressure groups due to the use of the media and their political engagement. The size of a group is a basic indicator of how much public support they get especially those that posse’s open membership, they mobilise through demonstrations, protest involving some non members through organised events. The different types of well known pressure groups that I will include are ‘Greenpeace’, ‘Child Poverty Action ... ...te and develop policies. Using a term called ‘reactive coverage’ which uses the media to put across its viewpoint and influence. â€Å"The child poverty action group used media coverage to demonstrate that an issue was of public concern and therefore reinforce a case being made civil servants† (Field, 1977, pp53- 4). Environment pressure groups i.e. ‘Greenpeace’ a well known pressure group backed by the government and the public has used the media to help change the ‘climate’ of public opinion having an immediate influence. â€Å"The growing use of the public relations and the media specialist by pressure groups reflects the influence which they believe the mass media have over public opinion and policy decisions† (Baggott, 1995: pp. 184). Other strategies that pressure groups have used are posters or press advertisement in order to get their message across to its public.

Managing Working Capital

MANAGING WORKING CAPITAL Cash Budgets and Current Assets Learning Objectives Upon reading this chapter, students should: †¢Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Be able to compare and contrast working and fixed capital †¢Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Understand the impact of the operating cycle on the size of investment in accounts receivable and inventories †¢Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Know the differences between the three motives †¢Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Be able to differentiate between float, collection float, and disbursement float †¢Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Know how to appraise a firm’s credit worthiness †¢Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Be able to appraise the effectiveness of a firm’s inventory management policiesChapter Summary A firm can invest in both working capital and fixed capital. Working capital is a firm’s current assets and includes cash, marketable securities, inventory, and accounts receivable. Fixed capital is a firm’s fixed assets and includes plant, equipment and property. Firms that cannot obtain short-term financing become candidates for bankruptcy. Management of working capital is particularly important to the entrepreneurial or venture firm because there is such a pull on resources.Two important concepts in managing working capital are the operating cycle and the cash conversion cycle: †¢Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   The operating cycle measures the time between receiving raw materials and collecting the cash from credit sales posted to accounts receivable †¢Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   The cash conversion cycle measures the time it takes to collect money from the company’s customers and use those funds to pay its suppliers Calculating three ratios will reveal the average length of these cycles: 1. Inventory days     Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   =   365 / (Cost of goods sold / Inventories) 2.Accounts receivable period (average collection period ) =   Accounts receivable / (Net sales / 365) 3. Average payment period   =   Accounts payable / (Cost of goods sold / 365) The operating cycle is the inventory conversion period plus the average collection period. The cash conversion cycle is the operating cycle minus the average payment period. In order to determine average investment in accounts receivable, multiply net sales per day by the average collection period. With this number, a manager can now estimate what the investment in accounts receivable will be fore ht following year given sales increases and average collection period.In order to determine investment required in inventories, multiply average cost of goods sold per day by inventory conversion period. The required amount of accounts payable can be found by multiplying the cost of goods sold per day by average payment period. Armed with these numbers, a manager can tweak the business practices and use these numbers as metrics for improvement. If savings can be wrung out of the operating cycle and conversion cycle, this means less money will have to be raised in financing. A cash budget details the cash inflows and outflows of a firm over a specific time frame.Small firms may prepare annual or monthly cash budgets while larger firms will forecast cash flows weekly or daily. Most firms have a minimum desired cash balance that depends on the firm’s ability to acquire financing on short notice, management preferences, and the predictability of cash inflows and outflows. Estimates of cash inflows are driven by two main factors: 1. Sales forecast (may exhibit seasonality) 2. Customer payment patterns Cash outflows will go to suppliers, payroll, taxes, operating expenses, and purchases of plant and equipment.In order to construct the cash budget, list all expected cash inflows and then all expected cash outflows for the particular period, generating a net cash flow amount. As a general rule of thumb, the average firm has 1/3 or more of i ts assets in the form of current assets (cash, accounts receivable and inventory). Seasonal production and forecasting can lead to idle plant capacity and laid-off workers during the off-season. Under a level production plan, the same amount of raw material is purchased and the same amount of finished product is manufactured every month.There are three types of motives for holding cash: 1. The transactions motives are demands for holding cash – cash is needed to conduct day-to-day operations 2. Precautionary motives are demands that may be caused by unpredictable events, such as delays in production or in the collection of receivables; marketable securities are held in such a contingency 3. Speculative motives are demands for funds to take advantage of unusual cash discounts for needed materials Cash and marketable securities include: †¢Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Cash itself †¢Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   U. S. Treasury bills   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Commercia l paper – short-term, unsecured notes of well-known business firms †¢Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Negotiable certificates of deposit – a receipt issued by a bank in exchange for a deposit of funds †¢Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Bankers’ acceptances – primarily used to finance exports and imports †¢Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Eurodollars – deposits placed in foreign banks that remain denominated in U. S. dollars There are several reasons why U. S. banks have entered the Eurodollar market through overseas branches: 1. To finance business activity abroad 2. To switch Eurodollars into other currencies 3. To lend to other Eurodollar banksIn general, managers try to speed up cash collections while slowing down the payment process. The float is the time between sending out payments and having them actually be charged to the bank account. The collection float is the time between when a payer sends payment and funds are credited to the payee ’s bank account. The disbursement float is the time between when a payer sends payment and when the funds are deducted from the payer’s bank account. Float has three components: 1. Delivery or transmission float – the delay in transferring the means of payment from the payer (customer) to the payee (provider of goods/services) 2.Processing float – once payment reaches the destination, it needs to be entered and processed 3. Clearing float – delay in transferring funds because of the banking system itself In order to speed up the process: †¢Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Preauthorized checks are regular (typically monthly) deductions by a vendor from a customer’s checking account. †¢Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Under the Check 21 law, enacted in 2004, payee banks can present electronic or digital images of checks to payer banks rather than having to physically deliver the paper checks for payment.In order to facilitate sales, firms of ten offer the customers credit for purchases; this process calls in credit analysis. The five Cs of credit analysis are: 1. Character – ethical quality of the applicant and the history of paying bills on time (credit checks) 2. Capacity – the ability to pay bills (liquidity ratios) 3. Capital – adequacy of owners’ equity relative to existing liabilities 4. Collateral – whether assets are available to provide security 5. Conditions – current economic climate and state of the business cycleCredit bureaus obtain credit information about business firms and individuals; two such organizations are Experian and Equifax. Dun & Bradstreet reports contain information assembled through many channels and is one of the best sources of information on privately-held companies; reports are typically divided into five sections:   (1) rating and summary; (2) trade payments; (3) financial information; (4) operation and location; and (5) history. Trade credit is extended on purchases to a firm’s customers. Sometimes, customers are given a discount if they pay early.The financial manager must be careful not to impose onerous credit terms that will alienate customers and lower sales. With respect to global credit, the concern is forex. There are two ways to handle the issue: 1. Invoice customers in the firm’s home currency 2. Hedge the forex risk Inventory management: †¢Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   The just-in-time (JIT) inventory control system is a system where there are enough materials in inventory to cover needs for a short time, but not more inventory than is needed for short-term needs.Vendor and manufacturer work together to reduce lead time, setup time, and production time so that inventory shows up â€Å"just in time†Ã‚   †¢Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   JIT II further integrates the activity of vendor and purchaser, wherein the position of buyer’s purchasers or materials planners is eliminate d and replaced by a representative of the supplier †¢Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Tracking inventory also allows firms to reduce the inventory conversion period and the cash conversion cycle. RFID (radio frequency identification) tags send out a radio signal to electronic readers that allow companies to know the location of inventory at any timeInventory management can result in reduced cost of warehousing and handling inventory. Cost savings and smaller asset bases should lead to higher return on assets and increasing shareholder wealth. Technology is improving asset management by making information available with which managers make business decisions in a real-time setting. Technology may be the key to reducing procurement and supply chain costs. Portals are specialized and secure Web sites through which clients can access order and account information. Key TermsCapacity  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   The ability to pay bills and often involves an examination of liquidity ratios. Capital  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   The adequacy of owners’ equity relative to existing liabilities as the underlying support for creditworthiness. Cash budget  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   The cash inflows and cash outflows of a firm over a specific time frame. Cash conversion cycle  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   The time it takes to collect money from the company’s customers and use those funds to pay its suppliers.Character  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   The ethical quality of the applicant and his/her willingness to pay bills on time and is best judged by reviewing the past credit hist ory for the company or person. Collateral  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Assets that secure credit. Collection float  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   The time between when a payer sends payment and the   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   funds are credited to the payee’s bank account. Conditions  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   The current economic climate and state of the business cycle.They are an important consideration in assessing whether the applicant can meet credit obligations. Credit bureaus  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Firms that obtain credit information about   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   business firms and individuals. Disbursement float  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   The time between when a payer sends payment and when the funds are deducted from the payer’s bank account. Fixed capital  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   A firm’s fixed assets, which include plant, equipment, and property. Float  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   The time between sending out payments and having them actually be charged to the bank account.Level production plan  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Schedule where the same amount of raw material is purchased and the same amount of finished product is manufactured every month. Operating cycle  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   The time between receiving raw materials and collecting the cash from credit sales posted to accounts recei vables. Portals  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Specialized and secure web sites through which clients can access order and account information. Pre-authorized checks  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Regular (typically monthly) deductions by a vendor from a customer’s checking account.Precautionary motives  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Demands for funds that may be caused by   unpredictable events, such as delays in production   or in the collection of receivables. Speculative motives  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Demands for funds to take advantage of unusual cash discounts for needed materials. Trade credit  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Credit that is extended on purchases to a firm’s customers. Transactions motives  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Demands for holding cash is that cash is needed to conduct day-to-day operations.Working capital  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   A firm’s current assets as shown on the balance sheet and includes cash in the bank accounts, marketable securities, inventory, and accounts receivable. Suggestions for Additional Resources 1. http://en. wikipedia. org/wiki/Just_In_Time_%28business%29 2. http://www. lean. org/ 3. http://www. equifax. com/ 4. http://www. experian. com/ 5. http://www. investopedia. com/terms/c/creditbureau. asp 6. http://en. wikipedia. org/wiki/Credit_bureau 7. http://www. investopedia. com/terms/w/workingcapital. asp 8. http://en. wikipedia. org/wiki/Working_capitalAnswers to Summary Questions 2. Fixed capital would be defined as the firm’s fixed assets, which include plant, equipment and property. True or false? True. .   3. The operating cycle measures the time it takes between o rdering materials and collecting cash from receivables. True or false? True. .   4. If a firm has $50,000 in profit and pays out about one half to the owners of the company, the amount of profit retained in the firm would show up as: (a) an increase in owners’ equity (b) a decrease in owners’ equity (c) a decrease in retained earnings (d) a decrease in long-term debt .   5.The accounts payable period is the time between a firm’s paying its suppliers for inventory and collecting cash from inventories. True or false? False. .   6. Increases in the cash conversion cycle will lower the firm’s short-term financing needs. True or false? False. .   7. The inventory conversion period is calculated by inventory divided by costs of goods sold. True or false? False. .   8. Activities that decrease the cash conversion cycle will increase the firm’s need to obtain financing. True or false? False. .   9. More efficient management of working capital a ssets will lessen the firm’s needs for financing.True or false? True. . 10. A cash budget is a tool the treasurer uses to forecast future cash flows and estimate future short-term borrowing needs. True or false? True. . 11. To construct a cash budget, two sets of information are needed: estimated cash inflows and estimated cash outflows. True or false? True. . 12. The estimated cash inflows are affected by the sales forecast and customer payment patterns. True or false? True. . 13. Assume a firm’s production process requires an average of 80 days to go from raw materials to finished products and another 40 days before the finished goods are sold.If the accounts receivable cycle is 70 days and the accounts payable cycle is 80 days, what would the short-term operating cycle be? (a) 110 days (b) 130 days (c) 190 days (d) 270 days . 14. If a firm has net sales of $400,000, annual cost of goods sold of $315,000, an inventory turnover of 4. 5 times a year, and an accounts re ceivable turnover of five times a year, the combined investment in inventories and accounts receivable would be: (a) $64,500 (b) $92,000 (c) $122,500 (d) $150,000 . 15. Calculation of a firm’s average collection period is the same as calculating the: (a) accounts receivable cycle (b) inventory cycle c) accounts payable cycle (d) short-term operating cycle . 17. A level production plan has problems, such as idle plant and laid-off workers during slow sales months and production bottlenecks during busy times. True or false? False. . 18. The account receivable period may be calculated as accounts receivable divided by sales. True or false? False. . 19. The account receivable period may be calculated as accounts receivable divided by daily sales. True or false? True. . 20. The transactions motive is the demand for holding cash. True or false? True. . 22. The federal funds rate is normally several points lower than the Treasury Bill rate.True or false? False. . 23. The five C†™s of credit analysis is a popular concept used by inventory managers. True or false? False. . 24. A mercantile credit bureau serves primarily as a (n): (a) collection agency for delinquent accounts (b) common meeting place where credit managers may exchange information (c) organization through which accounts receivable may be sold to other businesses (d) central record-keeping organization for credit information on business firms . 25. The objective of just-in-time (JIT) inventory control is to carry a minimum level of inventories.True or false? True. . 26. The delivery or transmission float is the delay in transferring the means of payment from the payer (customer) to the payee (the provider of goods or services). True or false? True. . 27. The disbursement float is the delay in transferring the means of payment from the payer (customer) to the payee (the provider of goods or services). True or false? False. Answers to â€Å"Review Questions† .   1. What is meant by wor king capital? Net working capital is defined as current assets minus current liabilities. .   2. Briefly describe a manufacturing firm’s operating cycle.The operating cycle measures the time between receiving materials and collecting cash from receivables. Raw materials are purchased and products are manufactured from them to become finished goods. Effort then is made to sell the finished goods. If the goods are sold on credit, then the receivables must be collected. .   3. Explain how the cash conversion cycle differs from the operating cycle. The cash conversion cycle typically is shorter than the operating cycle. The cash conversion cycle measures the time between when a firm pays for its supplies or raw materials and when it collects cash from receivables.    4. Describe how the length of the cash conversion cycle is determined. It is equal to the operating cycle (inventory period minus the accounts receivable period) minus the payables period. .   5. Explain how the length of the operating cycle affects the amount of funds invested in accounts receivable and inventories. All else being equal, a longer (shorter) inventory period and receivables period will increase (decrease) the amount of inventory and accounts receivable carried by the firm. .   6. What affects the amount of financing provided by accounts payable as viewed in terms of the cash conversion cycle?The level of the firm’s cost of goods sold and the average payment period affect the amount of financing provided by accounts payable. .   7. What is a cash budget? How does the treasurer use forecasts of cash surpluses and cash deficits? A cash budget lists, period by period, expected cash inflows and outflows. The treasurer can plan ahead to find suitable marketable securities in which to invest excess cash. If cash deficits are forecast, the treasurer can arrange for short-term financing sources. .   8. Three sets of information are needed to construct a cash budget.E xplain what they are. The firm’s minimum desired cash balance, forecasted cash inflows, and forecasted cash outflows are needed to construct a cash budget. .   9. Why might firms want to maintain minimum desired cash balances? Firms want to maintain minimum desired cash balance to ensure they can pay bills on time (transactions motive) and to have a cushion, as forecasts of cash flows may differ from actual future cash flows. . 10. What are the sources of cash inflows to a firm over any time frame? The main sources of cash inflows are cash sales and customer payments on credit sales. . 11.What are the sources of cash outflows from a firm over any time frame? The main sources of cash outflows are payments for raw materials, labor and overhead expenses, rent/lease payments, plant and equipment purchases, interest and principal payments, dividend payments, and taxes. . 12. How does the choice of level or seasonal production affect a firm’s cash over the course of a year ? Under level production, inventory becomes large before the peak selling season; whatever cash the firm has will probably be borrowed funds as cash is used to pay workers and suppliers over the course of the year as inventories are building.Under seasonal production, there is still a build-up of inventories prior to the selling season but probably less than under level production, as inventory can be sold shortly after it is made. Cash is conserved for much of the year; materials and labor expenses are less during the off-peak times when production is low. . 13. Describe what happens to a firm’s current asset accounts if the firm has seasonal sales and they use (a) level production; (b) seasonal production. a. Under a level production plan, the same amount of raw materials are purchased and the same amount of finished product is manufactured every month.Inventory builds up in anticipation of higher seasonal sales while cash and accounts receivable are quite low. When the sel ling season begins, inventories fall and receivables rise. After a time, inventories are nearly exhausted, and the firm is collecting cash from its customers. The changing composition of current assets for a firm with a seasonal sales pattern is illustrated in Figure 15. 4. b. Under seasonal production, raw material purchases will rise or fall in anticipation of higher or lower sales.Such a strategy can help minimize the effect of seasonal sales on inventory; goods are manufactured shortly before sale. Receivables will rise during the peak selling season but will fall thereafter as cash is collected. . 14. Describe the three motives or reasons for holding cash. a. need for day-to-day bill-paying? Transactions motive: b. hold funds to meet unexpected needs—a safety level of? Precautionary motive: cash hold funds? c. Speculative motive: to take advantage of attractive input prices or discounts 15. What characteristics should an investment have to qualify as an acceptable market able security?Marketable securities must be highly liquid (easily converted into cash at a price close to fair market value) with little chance of price risk or default risk. . 16. Identify and briefly describe several financial instruments used as marketable securities. Marketable securities that can be used as a means to â€Å"park† the firm’s excess cash include a. short-term securities issued and backed by the U. S.? U. S. Treasury Bills: government b. a bank’s temporary excess reserves that are lent to other banks? Federal Funds: on a day-to-day basis c. short-term unsecured notes of large financially stable? Commercial Paper: firms . large dollar CDs ($100,000 or more) for? Negotiable Certificates of Deposit: which a secondary market has evolved e. business paper used to finance international trade, backed? Bankers’ Acceptances: (accepted) by a bank with a high quality rating f. deposits placed in foreign banks that remain denominated in U. S.? Euro dollars: dollars (so there is no currency risk) . 17. What is float? Why is it important to cash management? Float is the delay between when funds are sent by a payer to a payee. Collection float is the time between when a payer sends payment and the funds are credited to the payee’s bank account.Disbursement float is the time lag between when a payer sends payment and when the funds are deducted from the payer’s bank account. It is important to cash management as the firm will have larger cash balances to invest and to reduce its own financing needs, all else being equal, the shorter the collection float and the larger the disbursement float. . 18. What are the three components of float? Which are under the control of the firm seeking to reduce collection float? The three components of float are delivery (or transmission) float, processing float, and clearing float.Delivery float and processing float are most directly under the control of the firm. Clearing float is c ontrolled mainly by the banking system’s check-clearing process but the firm can try to reduce it (and delivery float) by using lockboxes that are geographically closer to customers then the firm’s main office. . 19. What are some strategies a firm can use to speed up its collections by reducing float? Using a lockbox, incoming receipts are placed in a Post Office box which can be emptied several times a day by bank personnel, who process the payments and deposit the incoming funds into the firm’s accounts.This reduces mail delivery delay and processing delay, as the bank processes the payments rather than the firm. A second popular method, best used for regular payments such as utility, cable bills, or insurance premiums, is the use of preauthorized checks that allow the firm to deduct funds from the payer’s bank account. . 20 How can processing float be reduced? Vendors reduce processing float by improving the process of receiving payments and depositin g them. Large incoming payments (say, over $1 million) are automatically flagged and deposited expeditiously.Electronic check images and electronic payments (rather than the use of paper checks) remove the human component and thus can reduce processing delays. Lockboxes and preauthorized checks reduce processing delays, as processing is handled by banks, speeding deposit of incoming receipts. .. 21. How can a firm use float to slow down its disbursements? A firm can increase mail float by mailing payments from out-of-the-way locations, but that may hurt its reputation with suppliers who can direct the firm to send payments to another, closer, lockbox location.Another means are to use disbursement banks that are located around the country to increase disbursement float via the check-clearing process. So excess (and noninterest bearing) funds are not kept in a disbursement account, a firm can arrange to use a zero balance account for its disbursements. A bank will transfer sufficient funds every day into the ZBA to cover the day’s presented checks; other funds can remain invested in marketable securities. . 22. Why can’t a firm that wants to increase disbursement float simply make payments after the stated due date?There is an ethical issue with paying invoices late. If a vendor has provided needed goods and services the customer should pay for them in a timely and appropriate manner. Paying late can lead to negative notations on credit reports. Credit availability to late payers can be discontinued if the vendor’s credit standards are tightened. . 23. What is credit analysis? Identify the five C’s of credit analysis. Credit analysis involves appraising the creditworthiness or quality of a potential credit customer. Credit analysis includes examining the 5 C’s of credit. a. illingness to repay debts? Character: b. ability to repay debts (liquidity)? Capacity: c. equity cushion? Capital: d. what assets can provide security for t he credit? Collateral: e. the state of the business cycle and its expected movement during the? Conditions: credit period . 24. Describe various credit-reporting agencies that provide information on business credit applicants. Credit bureaus provide firms with information about a firm’s financial condition and its record on paying its past debts. Local credit bureaus service community credit information needs.The National Credit Interchange System facilitates exchange of information between bureaus. The National Association of Credit Management established the Foreign Credit Interchange Bureau to service firms with overseas customers. Dun & Bradstreet is perhaps the best-known private firm supplying credit information. . 25. How can a firm control the risk of changing exchange rates when billing an overseas customer? First, a firm can invoice the overseas customer in the firm’s home currency; this transfers the risk of changing exchange rates to the customer.Second, if the customer may pay in their own currency, the supplier can use currency futures or options contracts to hedge or reduce the risk of changing exchange rates. . 26. What risks arise when a firm lowers its credit standards to try to increase sales volume? Marginal and poor-risk customers may purchase the firm’s goods/services on credit. If they are unable to make payment, the firm must revise its sales figures and faces the added expense of trying to recover the goods and whatever funds it can from the delinquent customer. . 27. How do credit terms and collection efforts affect the investment in accounts receivable?All else being equal, lax credit terms increase the investment in accounts receivable and increase the chance for larger bad debts. Stricter credit terms will likely reduce receivables balances, but at the cost of possibly losing sales to competitors with easier standards. Collection efforts are aimed at having customers with overdue accounts pay their bills. Thus, successful collection efforts can reduce receivable balances and bad debt expense. On the other hand, collection efforts that offend customers can lead to lost future business. 28. How is the financial manager involved in the management of inventories? Inventory management concerns the financial manager because inventory, like all other assets, must be financed. Overly large inventories use warehouse space and have larger financing costs and insurance costs. Smaller inventories run the risk of selling out and causing customer dissatisfaction. Answers to â€Å"Applying this Chapter† Questions 2. The Robinson Company has the following current assets and current liabilities for these two years: 2004   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   2005 Cash and marketable securities |$50,000 |$50,000 | |Accounts receivable |300,000 |350,000 | |Inventories |350,000 |500,000 | |Total current assets |$700,000 |$900,000 | |Accounts payable |$200,000 |$250,000 | |Bank loan |0 |150,000 | |Accruals |150,000 |200,000 | |Total current liabilities |$350,000 |$600,000 | |   |   |   | If sales in 2004 were $1. 2 million and sales in 2005 were $1. 3 million, and cost of goods sold was 70 percent of sales, how long were Robinson’s operating cycles and cash conversion cycles in each of these years? What caused them to change during this time?AR period = $350,000/($1,300,000/365) = 98. 27 days (2005)   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   = $300,000/($1,200,000/365) = 91. 25 days (2004) Inventory period  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   = $500,000/($910,000/365) = 200. 55 days (2005)   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   = $350,000/($840,000/365) = 152. 08 days (2004) AP period   = $250,000/($910,000/365 ) = 100. 27 days (2005)   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   = $200,000/($840,000/365) = 86. 90 days (2004) Operating cycle = AR period + Inventory period = 98. 27 + 200. 55 = 298. 82 days (2005)   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   = 91. 25 + 152. 08 = 243. 33 days (2004) Cash conversion cycle = Operating cycle – AP period = 298. 82 – 100. 27 = 198. 5 days (2005)   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   = 243. 33 –   86. 90 = 156. 43 days (2004) Both the OC and CCC rose in 2005, primarily because of a large rise (almost 48 days) in the inventory period. 5. The Robinson Company from Problem 2 had net sales of $1,200,000 in 2004 and $1,300,000 in 2005. (a)  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Determine the receivables turnover in each year. AR turnover  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   = Sales/AR = $1,300,000/$350,000 = 3. 71 (2005)   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   = $1,200,000/$300,000 = 4. 00 (2004) (b)  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Calculate the average collection period for each year. Average collection period  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   = AR/(Sales/365)   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   = $350,000/($1,300,000/365) = 98. 7 days (2005)   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   = $300,000/($1,200,000/365) = 91. 25 days (2004) (c)  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Based on the receivables turnover for 2004, estimate the investment in receivables if net sales were $1,300,000 in 2005. How much of a change in the 2005 receivables occurred? Receivables investment  Ã‚  Ã‚  Ã‚  Ã‚   = Sales per day ? Average collection period   Ã‚  Ã ‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   = ($1,300,000/365) ? 91. 25 days = $325,000 6. Suppose the Robinson Company had a cost of goods sold of $1,000,000 in 2004 and $1,200,000 in 2005. (a)  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Calculate the inventory turnover for each year. Comment on your findings.Inventory turnover  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   = COGS/Inventory = $1,200,000/$500,000 = 2. 40 (2005)   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   = $1,000,000/$350,000 = 2. 86 (2004) Inventory turnover fell in 2005; inventory rose more quickly than cost of goods sold. (b)  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   What would have been the amount of inventories in 2005 if the 2004 turnover ratio had been maintained? Inventories investment  Ã‚  Ã‚  Ã‚  Ã‚   = COGS per day ? Inventory period   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   = $1,200,000/365 ? (365/2. 86) = $419,580. 42 7. Given Robinson’s 2004 and 2005 financial information presented in problems 2 and 4,   Ã‚  Ã‚  Ã‚   (a)  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Compute its operating and cash conversion cycle in each year. Robinson Company |   |   |   |   | |   |2004 |   |2005 |   | |Sales |$1,200,000 |   |$1,300,000 |   | |Cost of Goods sold |$1,000,000 |   |$1,200,000 |   | |profit margin |5. 0% |   |5. 0% |   | |   |   |   |   |   | |Accounts Receivable |$300,000 |   |$350,000 |   | |Inventory |$350,000 | $500,000 |   | |Accounts Payable |$200,000 |   |$250,000 |   | |   |   |   |   |   | |Sales/ day = |$3,287. 67 |   |$3,561. 64 |= $1,300,000/365 | |COGS/day= |$2,739. 73 |   |$3,287. 67 |= $1,200,000/366 | |   |   |   |à ‚   |   | |Inventory conversion period = Inventory/COGS per day | |   |127. 75 |days |152. 8 |days | |   |   |   |   |   | |Average collection period = AR/sales per day |   | |   |91. 25 |days |98. 27 |days | |   |   |   |   |   | |Average payment period = AP/COGS per day |   | |   |73. 0 |days |76. 4 |days | |   |   |   |   |   | |Operating cycle = Inventory conversion + collection periods | |   |219. 00 |days |250. 35 |days | |   |   |   |   |   | |Cash cycle = Inventory conversion + collection period – payment period | |   |146. 00 |days |174. 31 |days | (b)  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   What was Robinson’s net investment in working capital each year? |Net investment in working capital = AR + Inventory – AP (as used in his chapter) | |   |2004 |   |2005 |   | |   |=$300,000+$350,000-$200,000 |=$350,000+$500,000-$250,000 | |   |=$450,000 |   |=$600,000 |   | 8. Robinson expects its 2006 sales and cost of goods sold to grow by 5 percent over their 2005 levels. (a)  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   What will be the affect on its levels of receivables, inventories, and payments if the components of its cash conversion cycle remain at their 2005 levels? What will be its net investment in working capital? If the ratios remain the same, a |   |   | |5 |percent increase in sales and COGS will increase AR, | |inventory, and AP proportionately in 2006 |   |   | |AR: $350,000 + 5%= |$367,500 |   |   | |Inv: $500,000 + 5%= |$525,000 |   |   | |AP: $250,000 + 5%= |$262,500 |   |   | |Net investment in working capital = AR + Inventory – AP |   | |=$367,500 + $525,000 – $262,500 = |$630,000 |   | |   |   |   |   | |The new sales will be |$1,300,000 + 5% = |$1,365,000 |   | |Sales/day = |   |$3,739. 3 |   | |The new COGS will be |$1,200,000 + 5% = |$1,260,000 |   | |COGS/day = |   |$3,452. 05 |   | (b)  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   What will b e the impact on its net investment in working capital in 2006 if Robinson is able to reduce its collection period by five days, its inventory period by six days, and increase its payment period by two days? |The new sales will be |$1,300,000 + 5% = |$1,365,000 | |Sales/day = |   |$3,739. 3 | |The new COGS will be |$1,200,000 + 5% = |$1,260,000 | |COGS/day = |   |$3,452. 05 | |Estimated AR if collection period reduced by |5 |days: | |New AR = sales/day x collection period |   |   | |Sales/ day = |$3,739. 73 |   |   | |Old collection period |98. 27 |   |   | |New collection period |93. 27 |   |   | |New AR estimate= |$348,801. 7 |   |   | |   |   |   |   | |Estimated inventory if conversion period reduced by |6 |days: | |New Inv = COGS/day x conversion period |   |   | |COGS/day |$3,452. 05 |   |   | |Old conversion period |152. 08 |   |   | |New conversion period |146. 08 |   |   | |New Inv estimate= |$504,287. 7 |   |   | |   |   |   |   | |Estimated AP if payment period increased by |2 |days: | |New AP = sales/day x payment period |   |   | |COGS/day |$3,452. 05 |   |   | |Old payment period |76. 04 |   |   | |New payment period |78. 04 |   |   | |New AP estimate= |$269,404. 1 |   |   | |   |   |   |   | |2006 working capital = AR + Inventory – AP |   |   | |=$360,020. 55 + $514,643. 84 – $259,047. 95 |   |   | |=$583,684. 93 |   |   |   | |which is a reduction of |$46,315. 07 |from part a) | 9. Robinson expects its 2006 sales and cost of goods sold to grow by 20 percent over their 2005 levels. (a)  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   What will be the affect on its levels of receivables, inventories, and payments if the components of its cash conversion cycle remain at their 2005 levels? What will be its net investment in working capital? If the ratios remain the same, a |   |   | |20 percent increase in sales and COGS will increase AR, | |inventory, and AP proportionately in 2006 |   |   | |AR: $350,000 + 5%= |$420,000 |   |   | |Inv: $500,000 + 5%= |$600,000 |   |   | |AP: $250,000 + 5%= |$300,000 |   |   | |Net investment in working capital = AR + Inventory – AP |   | |=$367,500 + $525,000 – $262,500 = |$720,000 |   | |   |   |   |   | |The new sales will be |$1,300,000 + 20% = |$1,560,000 |   | |Sales/day = |   |$4,273. 97 |   | |The new COGS will be |$1,200,000 + 20% = |$1,440,000 |   | |COGS/day = |   |$3,945. 21 |   | b)  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   What will be the impact on its net investment in working capital in 2006 if Robinson is able to reduce its inventory period by ten days? |Estimated AR if collection period reduced by 0 days: | |New AR = sales/day x collection period |   |   | |Sales/ day = |$4,273. 97 |   |   | |Old collection period |98. 27 |   |   | |New collection period |98. 27 |   |   | |New AR estimate= |$420,000. 0 |   |   | |   |   |   |   | |Estimated inventory if conversion period reduced by 10 days: | |New Inv = COGS/day x conversion period |   |   | |COGS/day |$3,945. 21 |   |   | |Old conversion period |152. 08 |   |   | |New conversion period |142. 08 |   |   | |New Inv estimate= |$560,547. 5 |   |   | |   |   |   |   | |Estimated AP if payment period increased by 0 days: | |New AP = sales/day x payment period |   |   | |COGS/day |$3,945. 21 |   |   | |Old payment period |76. 04 |   |   | |New payment period |76. 04 |   |   | |New AP estimate= |$300,000. 0 |   |   | |   |   |   |   | |2006 working capital = AR + Inventory – AP |   |   | |=$360,020. 55 + $514,643. 84 – $259,047. 95 |   |   | |$680,547. 95 |   |   |   | |which is a reduction of |$39,452. 05 |from part a) |   | 10. Following are financial statements for the Genatron Manufacturing Corporation for the years 2004 and 2005: Selected Balance Sheet Information 2004   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   2005 Cash |  $ 50,000 |$ 40,000 | |Accounts receivable |200,000 |260,000 | |Inventory |450,000 |500,000 | |Total current assets |$700,000 |$800,000 | |Bank loan, 10% |$ 90,000 |$ 90,000 | |Accounts payable |130,000 |170,000 | |Accruals |50,000 |70,000 | |Total current liabilities |$270,000 |$330,000 | |Long-term debt, 12% |300,000 |400,000 | Selected Income Statement Information 2004   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   2005 |Net sales |$1,300,000 |$1,500,000 | |Cost of goods sold |780,000 |900,000 | |Gross profit |$ 520,000 |$ 600,000 | |Net income |$93,000 |$ 114,000 |Calculate Genatron’s operating cycle and cash conversion cycle for 2004 and 2005. Why did they change between these years? Inventory period  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   = Inventory/(COGS/365)   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   = $500,000/($900,000/ 365) = 202. 78 days (2005)   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   = $450,000/($780,000/365) = 210. 58 days (2004) AR period = AR/(Sales/365) = $260,000/($1,500,000/365) = 63. 27 days (2005)   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   = $200,000/($1,300,000/365) = 56. 15 days (2004) AP period   = AP/(COGS/365) = $170,000/($900,000/365) = 68. 94 days (2005)   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   = $130,000/($780,000/365) = 60. 83 days (2004) Operating cycle   = Inventory period + AR period 202. 78 days + 63. 27 days = 266. 05 days (2005)   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   = 210. 58 days + 56. 15 days = 266. 73 days (2004) Cash conversion cycle = Operating cycle – Average payment period   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   = 266. 05 days – 68. 94 days = 197. 11 days (2005)   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   = 266. 73 days – 60. 83 days = 205. 90 days (2004) The operating cycle remained constant in 2004 and 2005 as a reduction in the inventory period was balanced by an increase in the average collection period. The cash conversion cycle sell for 2005 was longer. Genatron took, on average, longer to pay its suppliers. 11.Genatron Manufacturing expects its sales to increase by 10 percent in 2006. Estimate the firm’s investment in accounts receivable, inventory, and accounts payable in 2006. If the inventory, collection, and payment periods remain constant, each account should rise by 10 percent. $260,000 (1. 10) =? Accounts receivable: $286,000 $500,000 (1. 10) = $550,000? Inventory: $170,000 (1. 10) = $187,000? Accou nts payable: 12   . With concerns of increased competition, Genatron is planning in case its 2006 sales fall by 5 percent from their 2005 levels. If cost of goods sold and the current asset and liability accounts decrease proportionately, (a) Calculate the 2006 cash conversion cycle.    |   |   |   |   |5% decline | |   |2004 |   |2005 |   |2006 | |Sales |$1,300,000 |   |$1,500,000 |   |$1,425,000 | |Cost of Goods sold |$780,000 |   |$900,000 |   |$855,000 | |profit margin |7. 2% |   |7. 6% |   |   | |Net income |$93,000 |   |$114,000 |   |   | |Accounts Receivable |$200,000 |   |$260,000 |   |$247,000 | Inventory |$450,000 |   |$500,000 |   |$475,000 | |Accounts Payable |$130,000 |   |$170,000 |   |$161,500 | |   |   |   |   |   |   | |Sales/ day = |$3,561. 64 |   |$4,109. 59 |= $1,500,000/365 |$3,904. 11 | |COGS/day= |$2,136. 99 |   |$2,465. 75 |= $900,000/366 |$2,342. 47 | |   |   |   |   |   |   | |Inv entory conversion period = Inventory/COGS per day |   | |   |210. 58 |days |202. 78 |   |202. 8 | |   |   |   |   |   |   | |Average collection period = AR/sales per day |   | |   |56. 15 |days |63. 27 |   |63. 27 | |   |   |   |   |   |   | |Average payment period = AP/COGS per day |   | |   |60. 8 |days |68. 94 |   |68. 4 | |   |   |   |   |   |   | |Operating cycle = Inventory conversion + collection periods |   | |   |266. 73 |days |266. 04 |   |266. 04 | |   |   |   |   |   |   | |Cash cycle = Inventory conversion + collection period – payment period |   | | |205. 90 |days |197. 10 |   |197. 10 | (b) Calculate the 2006 net investment in working capital. Net investment in working capital = AR + Inventory – AP (as used in this chapter) | |2004 |2005 |2006 |   |   | |   |   |=$247,000+$475,000-$161,500 | |$520,000 |$590,000 |=$560,500 |   |   | 13. .In problem 10 we assumed t he current asset and liability accounts decrease proportionately with Genatron’s sales. This is probably unrealistic following a decline in sales.What will be the impact on the working capital accounts if its collection period lengthens by five days, its inventory period lengthens by seven days, and its payment period lengthens by three days if Genatron’s sales and COGS fall 5 percent from their 2005 levels? |The new sales will be |$1,500,000 – 5% = |$1,425,000 |   | |   |Sales/day = |$3,904. 11 |   | |The new COGS will be |$900,000 – 5% = |$855,000 |   | |   |COGS/day = |$2,342. 7 |   | |   |   |   |   | |Estimated AR if collection period lengthens by |5 |days: | |New AR = sales/day x collection period |   |   | |Sales/ day = |$3,904. 11 |   |   | |Old collection period |63. 27 |(from problem 10) |   | |New collection period |68. 27 |   |   | |New AR estimate= |$266,520. 5 |   |   | |   |   |   |   | |Estim ated inventory if conversion period lengthens by |7 |days: | |New Inv = COGS/day x conversion period |   |   | |COGS/day |$2,342. 47 |   |   | |Old conversion period |202. 78 |   |   | |New conversion period |209. 8 |   |   | |New Inv estimate= |$491,397. 26 |   |   | |   |   |   |   | |Estimated AP if payment period increased by |3 |day: | |New AP = sales/day x payment period |   |   | |COGS/day |$2,342. 47 |   |   | |Old payment period |68. 4 |   |   | |New payment period |71. 94 |   |   | |New AP estimate= |$168,527. 40 |   |   | |   |   |   |   | |2006 working capital = AR + Inventory – AP |   |   | |=$266,520. 55 + $491,397. 26 – $168,527. 40 |   |   | |=$589,390. 1 |   |   |   | |which is an increase of |$28,890. 41 |from problem 10. |   | 14. .Suppose Global Manufacturing is planning to change its credit policies next year. It anticipates that 10 percent of each month’s sales wil l be for cash; two thirds of each month’s receivables will be collected in the following month, and one-third will be collected two months following their sale. Assuming the Global’s sales forecast in Table 10. 5 remains the same and the expected cash outflows in Table 10. 6 remain the same, determine Global’s revised cash budget. Nov. Dec. Jan. Feb. Mar. Apr.Sales  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   $80,000  Ã‚   $100,000  Ã‚  Ã‚  Ã‚   $ 30,000  Ã‚   $   40,000  Ã‚  Ã‚  Ã‚   $ 50,000  Ã‚  Ã‚  Ã‚   $ 60,000   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Cash (10%)  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   3,000  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   4,000  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   5,000  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   6,000   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   1 Month Later (2/3)  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   60,000  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   18,000  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   24,000  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   30,000 [pic][pic][pic][pic]  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   2 Months Later (1/3)  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   24,000  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   30,000  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   9,000  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   12,000   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Total Cash Receipts  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   $ 87,000  Ã‚   $   52,000  Ã‚  Ã‚  Ã‚   $ 38,000  Ã‚  Ã‚  Ã‚   $ 48,000 [pic][pic][pic][pic]  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Less: Total Cash Payments  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   60,000  Ã‚  Ã‚  Ã‚   127,000  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   44,000  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   40,000   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Net Cash Flow  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   $ 27,000  Ã‚   $ –75,000  Ã‚  Ã‚  Ã‚   $ –6,000  Ã‚  Ã‚  Ã‚   $   8,000 [pic][pic][pic][pic]  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Beginning Cash Balance  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   25,000  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   52,000  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   25,000  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   25,000   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Cumulative Cash Balance  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã ‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   $ 52,000  Ã‚   $ –23,000  Ã‚  Ã‚  Ã‚   $ 19,000  Ã‚  Ã‚  Ã‚   $ 33,000Monthly Loan  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚     Ã‚  Ã‚  Ã‚  Ã‚  Ã‚      (or repayment) 0  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   48,000  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   6,000  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   –8,000   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Cumulative Loan Balance  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚     Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   0  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   48,000  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   54,000  Ã‚  Ã‚  Ã‚      46,000   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Ending Cash Balance  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚