HR Oursoursment Essay Example | Topics and Well Written Essays - 2000 words

HR Oursoursment - Essay Example It is evident from the research that Business Transformation Outsourcing (BTO) is an emerging segment, which focuses on improving the effectiveness of an entire corporate function like the HR, according to Sako and Tierney. The rationale is to outsource administrative tasks leaving the personnel to focus on strategy formulation using their competencies and to experience greater flexibility in allocating resources, and greater cost efficiencies but Khatri and Budhwar cite many scholars who argue that human resource can be a source of sustainable competitive advantage for an organization. This argument suggests that all functions related to human resources should be dealt in-house. The line managers have assumed key positions thereby demonstrating a shift in the roles and responsibilities. This has been caused due to downsizing and devolution of responsibilities. The line managers are hence in a position to influence both strategic and operational organizational priorities. Added to th is are introduction of sophisticated software and the development of smart computer systems, which have further reduced the workload on the HR freeing the key personnel to concentrate on the change agent and strategic partner roles. The line managers are not competent in HR work and need to regularly reflect and be critical about their work. They attempt to increase the speed of decision making by wanting to by-pass procedures, which demonstrates that HR should not be outsourced but the HR functions should be expanded.

ATP biochemistry in the CNS Essay Example | Topics and Well Written Essays - 750 words

ATP biochemistry in the CNS - Essay Example It can be said to be a high energy molecule which is responsible for the storage of the energy required to carry out daily activities. Hence all the physiological mechanism in our body acquire energy for operation directly from Adenosine triphosphate. Cells maintain a supply of Adenosine phosphate through the oxidisation of food, as this releases energy. A remarkable ability of Adenosine triphosphate is that it may be involved in many reactions simultaneously, extracting and releasing energy at the same time. Adenosine Tri Phosphate in order to send messages and control chemical reaction is used as an on-off switch (Guyton& Hall 2000).  . Adenosine Tri phosphate induces the purinergic receptors in the brain (Matsuoka & Ohkubo, 2004). It may stimulate them directly or as a co-transmitter. This action is carried about via the P2 purinergic receptors. Adenosine Triphosphate is composed of an adenosine molecule attached to 3 phosphate groups. Adenosine itself is a purine nucleoside and has a role in not only various biochemical processes in the body but also serves as an inhibitory neurotransmitter (Fredholm, Chen, Masino & Vaugeois, 2005). The formation of Adenosine triphosphate requires the addition of 3 phosphate groups to the Adenosine backbone. Adenosine is first converted into Adenosine monophosphate, then to Adenosine di phosphate and finally to Adenosine Triphosphate. ... Adenosine Tri phosphate is vital for all living cells, processes within the cell cannot use the energy stored in the bonds of a glucose molecule, and they have to rely on Adenosine triphosphate. Thus it is present in all living cells, and is particularly highly concentrated in the presynaptic terminals. This is because presynaptic terminals require a lot of energy for the maintenance of the resting membrane potential and the release of neurotransmitters (Burnstock 2013). Along with this, it is also the neurotransmitter in multiple areas of the brain. The neurotransmitter action is believed to be mediated by Adenosine Tri Phosphate as well as adenosine. And attempts to differentiate between the role of Adenosine Tri Phosphate and adenosine on post-synaptic terminals has been futile so far. Although their mechanism of action is different, they seem to have similar role in the postsynaptic cell. Adenosine Tri Phosphate acts via the P2X and P2Y receptors on the postsynaptic cell, and use s Ca++ as the second messenger. Meanwhile this Adenosine Tri Phosphate is also gradually broken down by hydrolysis to Adenosine Monophosphate and then to Adenosine by enzymes present on the surface of the plasma membrane (Dasgupta, Ferre?, Kull, Hedlund, Finnman, Ahlberg, Arenas, Fredholm, & Fuxe 1996). Ecto-alkaline phosphatase is thought to be the major enzyme in the formation of adenosine in the synaptic cleft. Adenosine then activates the A1 and A2 receptors and further augments the role of Adenosine Tri Phosphate. A1 and A2 receptors use cyclic Adenosine Monophosphate as the second messenger inside the cells and their activation leads to an increase in

Assignment 6b Scenario Essay Example | Topics and Well Written Essays - 750 words

Assignment 6b Scenario - Essay Example This approach is generally favorable to a manufacturing division but not for a retail division. The second approach is the negotiated price approach. In this approach, a manufacturing division and a retail division both negotiate a price. The price of a product is set so that all of the variable costs of the manufacturer are covered and the price is lower than the market price, but the manufacturer still makes a profit. This method is commonly used when a manufacturing division has unsold inventory, as it can still sell products by using this method. This method is also more favorable to the retailer than the market price approach. The final approach is the cost price approach. In this method, a product is sold to the retail division at its standard cost or its actual cost. This price may even not be enough to cover all of the expenses of the manufacturing division. This method is the most profitable for the retail division, and it is unlikely to be supported by anyone in charge of manufacturing unless there is low demand for the manufacturer’s product or a massive amount of excess capacity at the manufacturer’s facility. There are several reasons why market price approach is the transfer pricing approach that should be used for Pharmafin’s new modules. One of the modules will be produced internally, and to produce it, the company’s production facilities will need to add new equipment. Production staffing also needs to be increased by ten percent. These large expenditures will make it necessary to use the pricing method that causes the company to receive the highest price so that it can cover the new expenditures. The marketing department shows that there is a high level of consumer demand for the new machinery. Because of this, the new machinery should sell even if it is sold at a higher price. The other two pricing approaches could lead to a lower price, but they might also lead to revenues that are inadequate to cover

History of the English Language in India

History of the English Language in India INTRODUCTION This study aims at studying the language needs of under graduates students, revealing the discrepancies of different participants with respect to actual English language skills and target language skills and then suggest corrections in curriculum, wherever required. The study is conducted at Sant Gadge Baba University; Amravati, on students studying in under-graduate courses.This chapter presents information on the background and purpose of the study. Next, research questions are presented. Finally, definitions of some basic terms used in this study are presented. Background to the Study Global English World English is broadly categorised into three varieties: English as a Native Language (ENL), English as a Second Language (ESL) and English as a Foreign Language (EFL). Accordingly, there are three geographical divisions of English speaking nations viz., ENL territories, ESL territories and EFL territories (Braj B. Kachru in Koul N. Omkar (eds.) 1992: 2 -3, cited in Hasan Kamrul Md,2004).1 ENL territories In countries like the UK, the USA, Canada, Australia and New Zealand, English is the first or often the only language of communication among the people. In ENL territories people use the mother tongue variety of English. ESL territories- In ESL situations English plays a vital role and is used to perform a variety of official, educational, and other roles. For ESL speakers, although English is not their native language but it is an important language in their professional and social lives. Like India, English is used as a second language in almost all the former British colonies (Singapore, Nigeria, South Africa etc.) Often the persons second language becomes the first functional language in adulthood in such cases. In ESL countries English is generally given importance in the educational framework of the nation and taught in schools and colleges. EFL territories In some countries English neither enjoys the status of native language nor second language. It is treated as foreign language and its use is restricted to occupational and educational purposes. In countries like China and Japan, English is taught and learnt mainly for reasons of trade and business and it does not play any role in social interactions. A historical sketch of ELT in India: Pre-colonial period Vasco da Gamas discovery of the sea route to India also paved way for the introduction of English in the sub-continent in 1498.However, it was only in the 18th century, when the Mughal Empire was on the decline and the English East India Company had secured a foothold in India that Indias tryst with the English language began. During this period, English was the language of communication of the elite people and was not the lingua franca of the people. Colonial period With the consolidation of the activities of the East India Company in eighteenth century, began the efforts of teaching English in the South Asian subcontinent. As far back as 1759, Christian missionaries entered India and the 1787 despatch welcomed the efforts of Rev. Swartz to establish schools for the teaching of English. Another significant effort was the publication of the first book, The Tutor, to teach English to the non-Europeans by author John Miller in 1797. This book was published in Serampore in Bengal. Thus the socio- historical stage for the role of English in education was set by the end of the 18th century. T.B. Macaulay, in the Minutes of 1835, for the first time, formally introduced the teaching of English in the South Asian subcontinent. In his Minutes he mentioned the importance and usefulness of the education that would be given to the natives through the medium of English. There were primarily two objectives of such education. The first was to create through this education a class of natives who, despite their blood and colour, would be English in culture and be able to interpret between the rulers and the subjects:à ¢Ã¢â€š ¬Ã‚ ¦a class who may be interpreters between us and the millions whom we govern a class of persons, Indians in blood and colour, but English in taste, in opinion, in morals and in intellect (quoted in Macaulay 1835, quoted in Thirumalai, 2003)2. The second was to create a demand for the European institutions. Although both the objectives were designed to serve the interest of the Masters, not of the subjects, but it provided the framework of formal English ed ucation to India which to a large extent is followed even today.. Thus by the middle of the nineteenth century the aims and objectives of teaching English were very clearly laid out For the remaining period of colonial rule there were a few landmarks in the development of English such as: The establishment of universities in Kolkata, Mumbai and Chennai in 1857 and in Dhaka in 1920 Selective education and training in administration, imparted through English, the Indian University Act (1904) The Resolution on Educational Policy (1913). For the entire period of British rule four broad developments with regard to English education took place: 1600 -1800: During the early years the variety of English used was imitative and formal. It was the language of the rulers and the elite class. 1850 -1947: During the later years more varieties (from very high to very low) appeared. Indian intellectuals and freedom fighters effectively used English as tool to for political awakening and resurgence. Interaction with vernacular languages: As the use of English penetrated the different sections of the educated Indians, a new variety of English emerged. This variety of English had a very distinct Indian flavour and a number of words of vernacular origin were absorbed in English, e.g., Brahmin. Coolie, jungle, and so on. Methodology: Language studies were based on literature and grammar and the means of studies was the grammar-translation method. The spoken component of the language was not practised. The emphasis was given on correctness and complete sentence construction. English also played a critical role in Indias struggle for independence as it became the language of political awakening and resurgence. Even Mohandas K. Gandhi (1869-1948), although a strong advocator of use of national language, used English language effectively to put forth his message to the British Government . Post colonial period Post independence, the perception of English as having an alien power base changed. Kachru notes that English now has national and international functions that are both distinct and complementary. English has thus acquired a new power base and a new elitism (Kachru 1986, p. 12 as cited in Baldridge, 2002).3 For most part of the twentieth century, it remained a language used by a select few. English primarily remained the language of law and administration. The Present State Twentieth century witnessed great advancements in science and technology and this enabled many new ways of sharing information and doing business. Indias international commercial activities led to the need for acquiring proficiency in English as an international language. Now, English was not just the language of the administrators and policy makers but also became the language of the business and professional class. In India, the English speaking population is only about 3-4%, but with Indias massive population, India is among the top three countries in the world with the highest number of English speakers. In terms of numbers of English speakers, the Indian subcontinent ranks third in the world, after the USA and UK. Most English speakers in India are second language speakers, in 1971, it was estimated that the rate of bilingualism in India was 13% and 99% of English speakers are second-language speakers (Mahapatra 1990: 7 cited in Hohenthal , 2003).4 Spolsky points out that English is the most widely spoken second language, followed by Hindi. English is more useful as a lingua franca; the usefulness of Hindi as a lingua franca is regionally limited (Spolsky 1978: 42 cited in Hohenthal , 2003)5. The small segment of the English speaking population controls domains that have professional prestige (Kachru 1986a: 8 cited in Hohenthal , 2003)). It is this small segment of Indian population that hea ds Indias economic, industrial, professional, political, and social progress. Most interactions in the above spheres of life take place in English. In the linguistically plural settings of India, English often acts as the link -language among people of different dialect. For many educated Indians English is virtually the first language. Thus in the present context English is playing a vital role in bringing together people from different regional languages for a closer exchange of social, educational and administrative network of India . It provides a linguistic tool for the administrative cohesiveness of a country (Kachru 1986a: 8). English is used in both public and personal domains and its functions extend far beyond those normally associated with an outside language, including the instrumental, the regulative, the interpersonal and the innovative, self-expressive function (Hohenthal citing Kachru 1986a: 37, 2003))6. As pointed out before, the role of English is not replacive: it overlaps with local languages in certain domains (Kandiah citing Sridhar, 1985;Shridhar and Shridhar, 1986; 1991: 273)7. English language in Indian Education System English is taught as a second language at every stage of education in all states of India and has been accepted as the main medium of instruction in higher education. English is also the state language of two states in eastern India, Meghalaya and Nagaland. In India, English has become an integral part of the curriculum almost at all levels of education. However there are various social, political and cultural factors that affect the position of English in different boards, universities and other institutions. Even the curriculum offered and evaluation tools employed are very diverse across the country. The model of English offered to the learners lacks uniformity and it is this question that continues to challenge the policy makers and education planners. While most States accord English the position of second language, some others treat is as the third language; the regional language and the national language getting precedence. as in other linguistically and culturally pluralistic societies, the position of English is determined by various political, cultural and social considerations. Kachru (1986b:20 cited in Hohenthal , 2003)8 sees primarily three questions which continue to be discussed. The first question concerns the position of English in early and in higher education. The second question is concerned with the roles of the regional language, Hindi and English. The third question deals with the model of English presented to Indian learners, and how that presentation can be made uniformly and effectively. The Government of India has primarily been concerned with the first two questions, which are directly related to language planning at both the national and state levels. There are, as yet, no acceptable answers to any of these questions (Kachru 1986b:20 cited in Hohenthal , 2003).9 1.2 Language Teaching Context at Amravati University Established on 1st May, 1983, this University geographically covers the western Vidarbha belt (i.e., five districts Amravati, Akola, Yavatmal, Buldhana and Washim) of Maharashtra State. The University, in its small span of two and a half decades, has contributed in many ways for economic, social and cultural upliftment of the society by offering quality education. The Motto of this University is Education for Salvation of Soul The University is recognised under Section 12(B) of UGC   Act. The University is also an associate member of Association of Commonwealth Universities, London (U.K.) The University has 10 faculties which includes Arts, Commerce, Sciences, Medicine, Ayurved, Education, Social Science, Law, Home Science, Engineering Technology. The University has facilities to offer post-graduate advanced education in Computer, Biotechnology, Business Management, Law degree courses in Chemical-Technology. SGB,Amravati University University has been one of the foundation universities undergoing expansion and developments in the recent years. Although the University does not have an English Department to date, English courses are offered both at undergraduate and postgraduate levels in colleges affiliated to the University. All undergraduate programs offered by SGBAU are of three years except Engineering (B.E.) Evaluation tools used in order to assess the students performance are generally written exams stated to cover the course objectives moderately rather than fully. That is because listening and speaking skills are not evaluated although practiced during the classes. The exam is generally conducted once, at the end of the academic session. The nature of the written examination paper is largely theoretical. Thus, the results of this study will be an aid to the Curriculum Development Unit of English Board of Studiesof Amravati University (SGBAU)in deciding on the needs of the students and improving the already existing program to better meet the needs of those students. 1.3 Purpose of the Study? English has penetrated all functions and all sections of society. It is a universally accepted tool for communication. It is no longer restricted to the English or Americans as a means for communication. Even within India, with its diversity of languages, English has emerged as the accepted language of communication cross culturally. It has even overtaken Hindi, which is officially the national language, as far communication among people of different native languages is concerned. Although, from time to time, various political lobbies have raised the issue of prohibiting the use of English language, however, they have so far been unsuccessful. This is primarily the result of the accommodating quality of English . Moreover, most of the world communicates in English and if India has to be a part of the Global scenario, English language can be a major bridge. Looking at English language courses in sub metroplises, the fact that glaringly stands out is that little has been done to understand the special learning needs of students here and even lesser attention has been paid to prepare them to function effectively in their workplaces and academic environment. Students hailing from townships and rural areas suffer from geographic as well as cultural disadvantages. Their distance from the metros does not bring the exposure and environment which is naturally a part of the cosmopolitan work culture. Culturally as well, most students belong to families where native language is the means of communication and even in academic institutions the medium of instruction is primarily the local dialect. The prime purpose of this study was to understand the special needs of students who belong to non-metropolitan areas and then attempt to suggest how they can be optimally trained to perform academic and professional functions efficiently. Each of the skills which may be required, reading, writing, listening and speaking may be of different value in terms of their use in a specific field. This study has been able to assess the students only in reading, writing, grammar and vocabulary. Due to a large and scattered sample, the researcher was constrained not to test the listening and speaking skills of the respondents. This study aims at collecting data about the ESP needs of undergraduate students in 2008-2009 Academic Year. By comparing the results of students in each skill and the desired competence level of the items, this study, also aims at examining whether or not there is a need for improvement in those skills. Rodgers (1969 as cited in Hutchinson and Waters,1987) in Nese Ekici,2003 expresses that developments in educational psychology has contributed to the rise of ESP by emphasising the central importance of the learners and their attitudes to learning. Learners have different needs and interests, which has an important influence on their motivation to learn and therefore on the effectiveness of their learning. To get an idea about students English language skills and to see whether there was any discrepancy between their actual language skills and desired skills constituted an important dimension of the study. The foci of this study were both the target needs and learning needs for the English curriculum which is implemented during the undergraduate program. This needs assessment study will be useful in improving the already existing curriculum or designing a new needs-based curriculum and choosing more appropriate curricular elements for the undergraduate students at Amravati University Necessity for syllabus development A planned approach to the teaching-learning process can go a long way it making a course effective and relevant. However, as it is seen as something very complicated , many a times the content of the text books available for the course take the place of the syllabus. There are very strong grounds to support the need for a systematic syllabus development process, the most important of them are: First, right from the onset of the course the teacher understands the ultimate objective of the course as a result of the planned process. This gives an opportunity to the teacher to interrelate and integrate all the elements. This in turn ensures better chances for the syllabus meeting its learning objectives. Secondly, a planned approach enables better selection of teaching materials and aids. The class delivery is better planned and oriented towards the end result. Finally, this syllabus development process leads to improvement of language education. The teacher plans, structures, selects, organises the teaching content in accordance with the learning objectives. Both the learner and the teacher are well aware of the outcome desired and both work in coordination to achieve the common goal. The syllabus theory has not found wide application in ELT practice yet and has often been ignored by applied linguists. However, the application of this theory could be very beneficial for the whole ELT process improvement. This research is an attempt to bring in the application of syllabus development process for SGBAUs language courses. 1.3.1 Research Questions The purpose of the study was to conduct a needs assessment revealing the language skills  of Undergraduate students. The following are the research questions this study sought to address: What is the present language proficiency level of students of under-graduate courses? Is the present curriculum able to meet the language needs of the students? Are their gaps between the desired and actual performance of the students ? Is there a difference in the language competency of students across different streams- Arts, Commerce and Science? Is there a difference in the language competency of students from first year of their undergraduate course to the third and final year? Does a co-relation exist between the students medium of instruction in school and present performance? Are there any specified learning outcomes of the language courses offered by SGBAU? Is a post-course analysis done to match the desired and achieved proficiency levels? Is there any mechanism in place to ensure uniformity of delivery across all colleges under SGBAU? What is the present process for syllabus designing? (More questions to be added) 1.4 Significance of the Study A needs assessment study is usually carried out for different purposes states Richards, 2001(cited in Ekici Nese, 2003). Understanding the learners problems, assessing whether the present syllabus adequately addresses those problems of the learner, identifying what skills the learners need in order to perform a specific role, analysing if a change in approach and strategy is required and identifying the gap, if any, in what the students are able to do and what they need to be able to do are the main reasons for needs assessments to be conducted. Identifying what the under- graduate students are able to do and what they need to be able to do is the main concern of this study. Smith (1989, cited in Ekici Nese, 2003) 12 mentions the concept of severity of needs. As all needs are not of equal importance, severity or importance of the need is used as a main criterion for prioritizing the needs, Smith, 1989 (cited in Ekici Nese, 2003). There are some needs which are of great necessity and thus require foremost attention. This study also aims at prioritizing such needs. The findings of the needs assessment in this study will be made use of in order to recommend changes in the existing curriculum in case such a need is identified according to the data collected from the students. Based on the democratic philosophy, information is gathered about the learning most desired by those groups and the gap between the desired performance from the students and what they are actually doing will reflect the discrepancy philosophy. Hopefully, su ggestions regarding the appropriate curriculum for undergraduate programs will be put forward. 1.5 Terms Frequently Used Clarification of the terms which will frequently be used and constitute the backbone of the study  is essential. To prevent misunderstanding or misinterpretation, some of the terms have been explained here. Need: Need is the difference between what a learner can presently do in a language and what he or she should be able to do. Needs Assessment: A needs assessment is a systematic set of procedures undertaken for the purpose of setting priorities and making decisions about program or organizational improvement and allocation of resources. It is a systematic process for documenting relevant needs (Reviere, 1996). ESP (English for Specific Purposes): It is an approach to language learning, which is based on learner need. The foundations of all ESP are the simple question: Why does this learner need to learn a foreign language? (Hutchinson and Waters, 1987). Target Needs: Target needs refer to what the learner needs to do in the target situation (work domain) (Hutchinson and Waters, 1987). Learning Needs: They refer to what the learner needs to do in order to learn. They show how the learner learns the language items. It refers to the skills that he or she uses (Hutchinson and Waters, 1987). ENL: English as a Native Language ESL: English as a Second Language EFL: English as a Foreign Language Syllabus: Curriculum: (more terms shall be added if needed)

Do School Uniforms Really Serve a Purpose? Essay -- Education School U

In the past school uniforms have been a requirement for private schools only, however; the number of public schools requiring uniforms is growing rapidly (Brunsma). Every parent wants their child to feel safe while they are at school. This is just one of the many things that implementing school uniforms into public schools will do for students (Maxwell). School uniforms have also been proven to be a key asset in keeping gang colors and symbols out of schools (Maxwell). The requirement of uniforms has also led to a decrease in violence and theft due to expensive clothing and shoes, helped to instill a sense of discipline in students, a reduction in the number of distractions for students, and helped give the students a sense of community (Maxwell). Uniforms have also helped to blur the lines between rich and poor students, and helped to make it easier for school officials to identify individuals on campus that do not belong (Maxwell). Implementing school uniforms into today†™s public schools will help to reduce all of these problematic situations, and help the students to feel safe. One controversial point in the debate of school uniforms is the cost. Many are quick to say no to uniforms because they will cost too much for the parents. In response to this opposition, President Bush instated tax breaks for school supplies including uniforms (School Uniforms). Many states have also stepped in to help reduce the cost of uniforms to parents by offering additional deductions (School Uniforms). In addition, some school districts offer uniform vouchers to low-income families (School Uniforms). School districts have also been found to accept charitable donations from groups and individuals to help families purchase uniforms (Ma... ...reenhaven Press, 2005. Opposing Viewpoints. Gale Opposing Viewpoints In Context. Web. 28 November 2010. Huss, John A. â€Å"The Role of School Uniforms In Creating an Academically Motivating Climate: Do Uniforms Influence Teacher Expectations?.† Journal of Ethnographic & Qualitive Research 1. (2007): 31-39. Academic Search Complete. EBSCO. Web. 23 November 2010. Dohrman, Margaret. â€Å"Uniforms Don’t Stifle Creativity.† St. Petersburg Times [St. Petersburg, FL] 1 October 2010: 12A. Gale Opposing Viewpoints In Context. Web. 28 November 2010. Goodnough, Abby. â€Å"Crew Supports Having Pupils Wear Uniforms. â€Å"New York Times 9 March 1997, Late Edition (East Coast): New York Times, ProQuest. Web. 29 November 2010. Creech, Stephanie. â€Å"BOE Gets Lesson on School Uniforms.† Wilson Daily Times [Wilson, NC] 7 February 2009. Gale Opposing Viewpoints In Context. Web. 28 November 2010.

Capital investment analysis and inflation and capital investment analysis with taxation Essay

Inflation refers to persistent increase in price of goods and services. It is also referred to as average general increases in the price of goods and services. Prior to this time, there had been lots of argument amongst writers in finance on whether or not to ignore or include inflation when computing capital budgeting. The argument has always being that inflation affects both the discount rate and the cash flow hence the effect will always cancel out. During inflation shareholders will always demand for higher rate of return because inflation has a way of eroding the purchasing power of the shareholders but the impact of inflation on the company’s rate of return and the expected cash flow are not always the same. Shareholders are not likely to reflect the entire inflation rate on a single investment because of risk diversification strategy employed by most shareholders. Besides, inflation will not affect all the cash flows in exactly the same way. The impact of inflation on labour for instance will not be the same for material cost and cannot automatically reflect on selling price. Whichever way it is, the question is, How do we incorporate the effect of inflation in capital investment decisions? How do we adjust for inflation? Will the project still be worthwhile after adjusting for inflation? In analysing the effect of inflation in capital budgeting analysis two things should be taken into consideration. i. The effect of inflation on the discount rate – As inflation increases shareholders will demand for increased return to compensate for the reduction in the value of their capital. So there will be increase in the minimum return required by an investor. ii. How to take account of the impact of inflation on future cash flows. There are basically two types of inflation: i. General inflation – this is an increase in the average price of all goods and services in an economy. General inflation affects both the discount rate and the cash flow hence it should be properly estimated. Changes in consumer price indexes are used as a measure of general inflation in Nigeria. ii. Specific inflation – refers to changes in prices of the various components that make up the project under consideration. Various components such as sales prices, labour cost, variable cost etc. Specific inflation affects only the cash flows of the project. The treatment of specific inflation should be detailed as possible. Money Cash flow and Real Cash flow In an inflationary period there is a difference between N10,000 cash and goods and services worth N10,000. The first is the money cash flow while the later is real cash flow. Money Cash flow refers to the actual amount of cash flows in nominal term. To arrive at the money cash flow we adjust each item by its specific rate of inflation. Real Cash flow on the other hand refers to purchasing power equivalent of the actual amount of cash flows. To arrive at the real cash flows we deflate (i.e. discount) money cash flows using the general rate of inflation. In project appraisal, general inflation is usually assumed to be the same throughout the project’s life. It becomes easier to analyse the impact on both cash flows and the discount rate. However specific inflation rate need not be the same throughout the project’s life. Money Cost of Capital (MCC) & Real Cost of Capital(RCC) MCC – Measures the actual discount rate in terms of the actual money. That is, it is the discount rate in nominal terms. RCC – Measures the discount rate in constant price level terms. Return on an investment are usually based on expected returns. The anticipated rate of inflation will be reflected in required rate of return for a project. This relationship has long been recognised in financial economies and it is referred to as fisher’s effect. It is expressed as (1+m) =(1+r)(1+I) Where m= Money cost of capital R= real cost of capital I = General rate of inflation From the equation above, if ‘r’ & ‘i’ are given, m could be computed as: M=(1+r)(1+i)-1 If m and I are given the r can be calculated as r = – 1 If m and r are given, then i can be calculated as follows i = – 1 Rules to follow using MCC & RCC 1. Cash flows in money or nominal terms should be discounted at money or nominal cost of capital 2. Cash flows stated in money terms can be converted to real cash flows by discounting at the general rate of inflation. The real cash flows should then be discounted at real cost of capital. 3. Discounting money cash flow at the money cost of capital and real cash flows at the real cost of capital will give the same NPV for a project. 4. The specific rate of inflation should be effected on specific cash flow only. The cash flow arrived at should then be discounted at the relevant cost of capital which in most cases is the money cost of capital except otherwise stated. 5. Money cash flows should be discounted with money cost of capital and real cash flow should be discounted with the real cost of capital. Raze Ltd is considering a project costing N50,000. The project is expected to have a life of 4 years with a residual value of N4,000. Annual cash revenue from the project is expected to be N35,000 in year 1 rising by 6% per annum for inflation. Running cost are expected to be N15,000 in the first year of the project but would increase by 11% per annum because of inflating labour costs. The general rate of inflation is expected to be 8% and the company’s money cost of capital is 18%. Advice the company on whether or not to accept the project. Rex Ltd have been considering a 5yrs project costing N3m which on an initial estimate would earn N1.1m per annum in contribution without incurring any additional fixed cost but with a nil residual value at the end of year 4. Cumulative discount rate at 15% for 5years is 3.352. The company’s director believes that the project should be undertaken because its NPV was N687,200.00 However, further investigation into the cash flow reveals the following. a. The contribution consists of annual sales of N2.7m and variable costs of N1.6m for 1million units of sales per annum. These are the expected money values in year one. b. The sales would be made through a single distributor, who has asked for a fixed selling price of N2.70 per unit for 3yrs after which prices could increase by 18% for year 4 and held constant for year 5 c. Variable costs of N1.60 per unit in year one consists of material cost of N0.80 which are expected to increase by about 5% per annum and labour costs will rise by an expected 10% per annum for each year because of existing wage agreements with the trade unions concerned and a shortage of skilled labour for the work. Required 1. Is the initial NPV calculated correct 2. Is the project viable Solution Workings Yr 1 2 3 45 Sales2,700,0002,700,0002,700,0003,186,000 3,186,000 Less Material (800,000)(840,000)(882,000)(926,000) (972,405) Labour(800,000)(880,000)(968,000)(1,064,800) (1,171,280) Net MCF1,100,000980,000 850,0001,195,100 1,042,315 Labour at 10% Material at 5% Sales at 18% in years 4 & 5 Yr Cash flowsMCC @ 15%PV 0(3,000,000)1(3,000,000) 11,100,0000.8696956,560 2980,0000.7561740,978 3850,0000.6575558,875 41,195,1000.5718683,358 51,042,3150.4972518,239 The project is viable because it has a positive NPV of N458,010 The initial NPV calculated does not take into consideration the adjustment is sales, material and labour because of inflation. Summary We have looked at the impact of inflation in capital investment appraisal. Inflation refers to the persistent increases in prices of goods and services thus affecting the financing needs if the organisation as well as its cost of debt and WACC. Inflation is treated in capital investment appraisal by discounting inflated values of future cash flows at the money cost of capital or real cash flows at real cost of capital. Review question Idi araba town council plans to build a bridge over the local river to replace the existing ferry service. Building will start in one year’s time, that is 2006 and will take 4 yrs. It has planned to sub contract the building work to a major construction company and the best tender will involve the council in a cash expense of N10m at the start of building and further payments of N5m each year until 2010 once completed, the annual maintenance cost for the bridge will be N1m per annum according to today’s prices; the annual cost is expected to rise with the general inflation rate of 7% p.a. In addition, a major overhaul is expected to be required after the first 15years of use, this will comprise N10m of material plus wage costs of a further N10m in current prices. Material prices are expected to rise with the general rate of inflation for the next 16years and then remain constant; wage cost is expected to increase by 6% over the general inflation rate for the next 3years and then increase in line with general prices. The market interest rate the council consider relevant for the whole life of the project is 17.7%. You can assume that for calculation purpose the life of the bridge is infinite. The expected use of the bridge is 20,000 vehicles per day and toll charge is expected to increase in line with general inflation. Required a. Calculate minimum toll charge in the first year of operation necessary for the bridge to break even over its life, and explain your treatment of inflation. Note: Assume all annual cash flows arise on the last day of the relevant year. b. What other factors do you think the council should consider when deciding upon the toll charge? Note: The statement that â€Å"in addition, a major overhaul is expected to be required after the first 15yrs of use† should be interpreted to mean at the end of the first 15years of use (i.e. year 20.5 +15) (ICAN , 1993) Capital Investment Analysis and Taxation Tax is an important factor to consider when computing capital investment appraisal because of its implications on cash flows. Capital investment appraisal is based on after tax incremental cash flows arising from the project. Thus, when appraising the viability of a project tax that has to be incorporated and then discounted at the relevant cost of capital. Corporation tax This is charged on the profit made on projects that is positive cash flows and then discounted at the appropriate ruling rate. Currently in Nigeria, it is charged at 30%. It is usually charged on a preceding year basis because tax is expected to be remitted 6-11 months after the end of the period in which profit were earned. In capital investment appraisal we assume a year lag for corporation tax payment, that is, tax on taxable profits made in year one will be deemed payable in year 2 except otherwise stated. Also, when losses are made on a project the losses are used to reduce tax liability hence, it is treated as tax benefit. The amount by which tax is reduced is equivalent to cash inflow to the project. Investment Incentives – This is given to encourage investment in fixed assets. The main types include investment allowance and capital allowance. Investment allowances – are receivables which should be brought into the project appraisal in the period in which they are receivable. They are use to reduce the tax liability. Capital allowance- is available to reduce a tax liability if a business is carried on and it has a balance of qualifying capital expenditure. The reduction is treated as cash savings. Capital allowance could be treated on a straight line basis or a reducing balance basis. In Nigeria it is claimed as initial allowance and annual allowance. The Nigerian law permits a company to leave at least N10 in its book as written down value for an asset that is not yet disposed by the company. The Nigerian law also restricts the capital allowances a company can claim in any year of assessment to a certain percentage of the adjusted profit so that companies that have made profit can always increase their tax liability. On disposal of an asset no capital allowance can be claimed in the year of disposal. When disposal is finally made, the difference between the proceeds on disposal and tax written down value treated as: i. A balancing charge – if the sales proceeds exceed the tax written down value. ii. A balancing allowance if the tax written down value exceeds the sales proceeds. Assumptions on Investment allowance and capital allowance claims Two possible assumptions can be made on when to deduct capital allowance claims i. We can assume that the first claim is set – off on profits that occur in year one and it is deductible in year 1 ii. The most acceptable by examiners and in practice is to assume that the first claim occurs in year one and the tax savings occur one year later that is, year 2. Illustration 1 A company purchases a machinery at a cost of N10,000 in respect of a project which has a life of 5years and a residual value of N500. Calculate the capital allowance on a straight line basis that will be used to reduce tax payment in each year of the project. The initial allowance is 50% while the annual allowance is charge at 25%. Year ClaimsPoolAllowance 1. Initial allowance (50% x 10,000) 5,000 10,000 Annual allowance (25% x 10,000) -5,000 -10) 1,247.50(6,247.5)6,247.5 2. written down value c/f3,752.5 Annual allowance(1,247.5)1,247.5 3. written down value c/f2,505 Annual allowance(1,247.50)1.247.5 4. written down value c/f1,257.5 Annual allowance(1.247.5)1.247.5 5. written down value c/f10 Sales proceed(500) Balancing charge 490(490) Illustration 2 XYZ company is considering investing in plant and machinery costing N100,000. The machine has a life of 5 years after which it can be sold for N5,000. The machine would generate annual cost of saving of N35,000. Investment incentive on the machinery will be available as follows: Investment allowance 20%, initial allowance 20%, annual allowance 10% on a straight line basis. Tax rate 35% payable one year in arrears and after tax cost of capital is 15%. Should the machine be purchased? Solution Workings Investment allowance = 20% x 100,000 = N20,000 Capital allowance computation. Year Claims Capital Tax written allowance N down value N 1 Initial allowance ( 20% x 100,000)20,000 Annual allowance(10% x 100,000) – 20,000) 8,000 28,00072,000 2 8,00064,000 3 8,00056,000 4 8,00048,000 5 48,000 – 5000 Computation of tax liability Year 1 2 3 4 5 Cost of savings35,00035,00035,00035,00035,000 Investment allowance(20,000)—- Capital allowance(28,000)(8,000)(8,000)(8,000)(43,000) Taxable profits13,00027,00027,00027,0008,000 Tax at 35%4,550(9,450)(9,450)(9,450)2,800 Computation of NPV Year Machinery Savings Tax Net cash DCF @15% PV 0 (N100,000)- – (N100,000)1 (N100,000) 1 35,000 – 35,0000.869630,436 2 35,000 4,550 39,5500.756129,903.76 3 35,000 (9,450) 25,5500.657516,799.13 4 35,000 (9,450) 25,5500.571814,609.49 5 50000 35,000 (9,450) 30,5500.497215,189.46 6 2,800 2,8000.43231,210.44 8,148.28 The NPV is positive and thus, the machinery should be purchased. Illustration 3 New ventures Nigeria Ltd is considering a project with an initial cost of N5m. The project is to last for 5years with a scrap value of N10,000 .The project involves the production and sales of product X. Estimated future sales quantity and fixed costs are given below: YearSales QtyFixed Costs UnitsN,000 1100,0001,000 2110,0001,100 3120,0001,200 4120,0001,250 5125,0001,300 The selling price of product X is expected to be N50 per unit in year 1 rising by 5% per annum because of inflation. Variable costs are expected to be N25 per unit in year 1 rising by 8% per annum because of inflation. General level of inflation in the country is currently 7.5%. The company can claim capital allowance at the rate of 20% on the reducing balance basis on this project. Tax is currently at the rate of 35% payable one year in arrears. If the company’s after tax real cost of capital is 7%, should the company invest in the project? Solution Workings Computation of cash profit Year Sales Revenue Variable cost (N) Fixed CostProfits(N) 1100,000(N50)100,000(25)1,000,0001,500,000 2110,000(50)(1.05)110,000(25)(1.08)1,100,0001,705,000 3120,000(50)(1.05)2120,000(25)(1.08)21,200,0001,915,800 4120,000(50)(1.05)3120,000(25)(1.08)31,250,0001,916,614 5125,000(50)(1.05)4120,000(25)(1.08)41,300,0002,045,386 Computation of capital allowance(Reducing balance basis) Year Capital allowance Written down value 120% x 5,000,0001,000,0004,000,000 220% x 4,000,000800,0003,200,000 320% x 3,200,000640,0002,560,000 420% x 2,560,000512,0002,048,000 52,048,000 – 10,0002,038,000- Computation of tax liability Year 12345 Profits1,500,0001,705,0001,915,8001,916,6142,045,386 Less cap allowance(1,000,000)(800,000)(640,000)(512,000) (2,038,000) 500,000905,0001,275,8001,404,6147,386 Tax @ 35% 175,000316,750446,530491,6152,585 Cost of capital to use: (1+m) = (1+r)(1+i) i+m = (1.07) (1.075) M = 1.15025 – 1 M = 0.1503 x 100 M = 15.03% Computation of NPV Year Cost/Residual Cash profits Tax liability Net cash flow DCF@15.03% PV 0 (5,000,000) – -(5,000,000) 1 (5,000,000) 1 1,500,000-1,500,000 0.86931,303,900 21,705,000(175,000)1,530,000 0.75571,156.221 31,915,800(316,750)1,599,050 0.65701,050,576 41,916,614(446,530)1,470,084 0.5712839,712 5 10,0002,045,386(491,615)1,536,771 0.4965776,412 6(2,585) (2,585) 0.4317(1,116) 125,755 The company should embark on the project because it has positive NPV Illustration 4 SCG limited is considering a project that has the following cash flow estimates YearCash revenueCash Operating Expenses 1N’000N’000 21,600900 31,8001,100 41,400600 51,200500 500200 The project cost is N1.4m and has an estimated residual value of N10,500. The above cash flow profile has not taken into consideration the effect of changing prices. If effect on changing selling prices are taken into consideration cash revenue are expected to rise by 10% after year 1 and operating expenses by 11% after year 1. General level of inflation in the country is currently 15%.SCG Ltd can claim capital allowance at the rate of 25% on the reducing balance basis on this project. tax is currently at the rate of 35% payable one year in arrears. If the company’s after tax cost of capital is 20%,should the company invest in the project? Solution Workings Computation of cash profit Year Cash revenue (N) Operating expenses(N) Profits(N) 11,600,000 900,000700,000 21,800,000(1.10) 1,100,000(1.11)759,000 31,400,000(1.10)2 600,000(1.11)2 954,740 41,200,000(1.10)3 500,000(1.11)3913,384.50 5 500,000(1.10)4 200,000(1.11)4428,435.92 Computation of capital allowance Year Capital allowanceWritten down value 125% x 1,400,000350,0001,050,000 225% x 1,050,000262,500 787,500 325% x 787,500196,875 590,625 425% x 590,625147,656.25 442,968.75 5N442,968.75 – 10,500432,468.75 Computation of tax liability 12345 Profits 700,000 759,000 954,740 913,384.50 428,435.92 Less capital allowance 350,000 262,500 196,875 147,656.25 432,468.75 Taxable Profit 350,000 496,500 757,865 765,728.25 4032.83 Tax@ 35% (122,500) (173,775) (265,252.75) (268,005) 1,411.5 Computation of NPV Year Cost/Residual Cash Profits Tax liability Net Cash flow DCF@20% PV 0 (N1,400,000) — (1,400,000)1 (N1,400,000) 1 700,000- 700,0000.8333583,310 2759,000(N,122,500) 636,5000.6944441,986 3954,740(173,775) 780,9650.5787451,944 4913,385(265,253) 648,1320.4823312,594 5 10,500428,436(268,005) 170,9310.4019 68,697 61,412 1,4120.3349 473 459,004 The company should embark on the project because it has a positive NPV Summary The effect of taxation on a project will be to increase or reduce tax liability a company pays to the tax authority which will in turn increase or reduce the cash flows that will be used in arriving at the NPV of the project. When taxation is reflected in the cash flows, a post tax cost of capital should be used in evaluating the viability of the project. Review questions 1. Turnaround Nig Ltd is considering an investment that requires an outlay of N100,000 to be spent on the acquisition of necessary plant and machinery. The investment is expected to last for a period of 5 years by which time the residual value of plant and machinery is expected to be N18,000.The net revenue is estimated at Period 12345 Net revenue 30,000 45,000 50,000 52,000 20,000 In addition, turnaround Nigeria Plc expensed an investment of N10,000 in working capital and advertising expenses of N2,000 in period 1 and period 2. Turnaround Nigeria Plc has an after tax cost of capital of 10% and the application tax rate is 40% while the rates of capital allowance are initial allowance 20%,annual allowance 10%.Payment of tax claim may be assumed to be exactly one year in arrears. Required: Determine if the investment is worldwide 1. Links Ltd is considering investing in a project that will involve purchase of plant and machinery costing N150,000.The plant and machinery are expected to have a life span of 5 years and a residual value of N8,000. the project will generate cash profits as follows: Capital allowance is available on the plant and machinery at the rate of 25% of cost on the reducing balance basis. Tax is currently payable at 35% payable one year in arrears. The company’s after tax cost of capital is 18%.advise if the project is worthwhile.

My Favorite Teacher Essay

I walked into my Advanced Composition class on the first day of school and was greeted by my peppy, upbeat teacher, Ms. Jorgensen. I knew it was going to be a fun semester just from that first day of class. In Advanced Composition, I had a lot of freedom to write what we wanted, when we wanted to. This helped me mold my papers into perfection with the help of Ms. Jorgensen’s phenomenal editing skills. She taught me how to write a paper that only I could come up with. She encouraged me to do this by using different writing techniques. Then, throughout first semester, my writing became interesting and bold†¦instead of dry and boring. Overall Ms. J, has been my favorite teacher in my high school career. She has always been there to not only help me, but to also help other kids that are struggling, whether she likes them or not. She never does your work for you, but she points you in the right direction. I also had Ms. J for College Strategies. In this class, she helped each student learn what they needed to have a successful college career. We learned about study skills, nutrition, and self-advocacy, sleep, and even how to pick our classes and professors. Throughout the class, she looked to us for ideas. She really wanted us to be learning about what we wanted to know. She helped us write our college essays (which helped me get into my first-choice school). And she even taught us relaxation skills. I use these skills before basketball games—and even before big tests. Ms. J was a person I could relate to—and a person I admired. She rarely wears a frown on her face and her smile rubs off on all her students. This is why I appreciate having Ms. Jorgensen as a teacher so much.