Iago s Manipulation And Deception - 1349 Words

Iago’s manipulation and deception clearly therefore derives from his jealousy for Cassio and the sense that he has been betrayed by Othello. So, he seeks vengeance using anyone he can to attain this personal gain. From the beginning, it is clear that Iago is a deceitful man who says â€Å"Sblood!† as opposed to Roderigo’s â€Å"Tush!†, the audience already see his powers of deception as he explains how he is even worse off than Roderigo. His furious language: â€Å"A fellow almost damned in a fair wife† manages to convince the intellectual Roderigo who is presented along with Cassio in contrast to Iago. They are arguably used as foils to emphasise Iago’s deceitful and manipulative traits as shown from the beginning. The reason Iago is manipulative and†¦show more content†¦It manifests how evil Iago is when he goes to inform Brabantio and we know that for Iago this is all a game that he aims to win to receive personal gain. While Rod erigo can only manage a polite: â€Å"What, ho, Brabantio! Signior Brabantio, ho!† Iago uses animalistic and explicit images of his daughter Desdemona and her new but secret husband Othello: â€Å"an old black ram Is tupping your white ewe†, â€Å"your daughter and the Moor are making the beast with two backs.† and can imagine Brabantio’s, rejection at Iago’s pervasive language. Iago manages to convince Brabantio and it’s the strength of the language that is an asset to Iago and effective in his manipulation. Iago then leaves the scene because he does not want Othello to know it is he that is starting this whole affair and later blames it on Roderigo. In scene 2 the audience sees Iago and Othello together and Othello’s dominance is clear; Iago admires and respects him and it clearly shows in his speech that is a bit humbling: â€Å"I lack iniquity Sometimes to do me service†. We see another side of Iago contrasting his usual self if his deceptive and manipulative character is his real self. We can sense how ironic he is when he says: â€Å"he prated, And spoke such scurvy and provoking terms against your honour† (blaming Roderigo) being that it was Iago who informed Brabantio. Here theShow MoreRelatedIago By William Shakespeare s Othello Essay914 Words   |  4 Pages Today’s society is overly familiar with deception and lies; whether it is from their family, friends, media, or politicians. Historically, there has been an abundance which still carries on today. Behind every lie, there is a motive for doing so. In Shakespeare s Othello, Iago is no exception to this rule. He is living a dual life of li es. On one face Iago is a trustworthy friend who is attempting to set up Roderigo with the love of his life. His other face is the one whose main goal is to beRead MoreOthello, By William Shakespeare1599 Words   |  7 Pagesand subsequent downfall that inevitably occurs. Their marriage is then sabotaged by the jealous Iago, Othello’s ensign and villain of the play. While Iago’s ostensible justification for instigating Othello’s demise was his failure to acquire Othello’s position as lieutenant, Iago’s motives are rarely directly articulated and seem to derive from an obsessive, almost aesthetic pleasure in manipulation and destruction. Through the genre of the play, being a Shakespearean tragedy, and the structuralRead MoreOthello, By William Shakespeare Essay1444 Words   |  6 PagesOthello by William Shakespeare, Iago is the villian present in the drama. He manipulates people into thinking things that aren t true. The way the author lets the reader know the plan behind Iago’s actions, but not the other characters, the irony that s present in the words he uses to describe Iago, and the symbolism he uses to cause betrayal for other characters, helps one to realize that Iago is the villain. One can see the villainry that s present in Iago s character when he releases his cruelRead MoreThe Character Analysis Of Iago Of Othello1075 Words   |  5 PagesAt first glance, Iago of Othello can appear to have little motivation for his destructive tendencies; however, when viewed through the lens of antisocial personality disorder, his incentive takes on a twisted internal logic. His all-consuming desire for revenge is not necessarily because of any outside influence by Othello himself, but rather the fact that Othello disrupts Iago’s conception of himself and is a pawn whom he can manipulate for pleasure. His arrogance and entitlement are also classicRead MoreManipulating The Supernatural : William Shakespeare s Ot hello And A Midsummer Night s Dream883 Words   |  4 Pages Because of this Shakespeare made his characters as relatable as possible to the audience members of the late fifteenth and early sixteenth century and their views on life so he could generate more recognition for his plays. Throughout Shakespeare s plays, Othello and A Midsummer Night’s Dream, he appeals to the audience by relating to their human nature. One of the major observations of human nature that Shakespeare likely made and incorporated into his plays is the human desire to be drawn towardRead MoreOthello, By William Shakespeare1203 Words   |  5 Pagesin Macbeth, or revenge, as in Hamlet. What is interesting about Iago is that the audience never knows for certain why it is that Iago wants to destroy Othello. His evil comes without a motive. The characterization of Iago as a motiveless malignity was first proposed by Samuel Taylor Coleridge as he was preparing a series of lectures delivered in 1818. Cole ridge calls him a motiveless malignity at the end of Act 1, Scene 3 when Iago leaves Roderigo, saying, Go to, farewell. Put money enough in yourRead MoreOthello : Vulnerability Destroys Virtues Of A Great Leader1601 Words   |  7 Pagesprinciples because Iago despises Othello and manipulates him therefore, Othello becomes vulnerable resulting in his death. 1. Othello believes that being vulnerable is a sign of weakness. A. Othello will not expunge himself from his race and ethnicity, for he knows glorifying his heritage is a vulnerability that could end his career as a leader. B. Othello knows that a schism among his ranks leads to distrust and a lack of loyalty among men, leaving him susceptible to defeat. 2. Iago despises OthelloRead MoreThe Tragedy Of Othello By William Shakespeare998 Words   |  4 Pagesof two worlds. One of them is a world of absolute cynic, manipulate or Iago; the second world is the world of all the other characters in the tragedy, including, possibly, even Othello. Even though both of the main male characters, Iago and Othello, are murderers, they have different types of characters, cause different feelings and deserve different attitudes. Shakespeare makes it clear at once at the first appearance of Iago, that he is a villain with his philosophy. Philosophy is not crafty inRead MoreAnalysis Of Othello By William Shakespeare1505 Words   |  7 PagesIn William Shakespeare’s play Othello Iago has the ability to charm and convince people of his loyalty and honesty. Iago immediately introduced his malicious desire for revenge, but he had no proven reason for his actions. Throughout the play Iago devises a devious plan to convince the other characters o f his cunning contrivance. Iago treats others as the fool with no intentions of caring about their feelings. Behind his deceitful trustworthy appearance, Iago is a multilayered manipulative villainRead MoreThemes of Deception in William Shakespeares Othello Essay1758 Words   |  8 PagesThemes of Deception in William Shakespeares Othello Deception is one of the main themes running through Othello, along with love, pride and society. Indeed, it is deception that provides the fuel for the plot and deception that is leads to the classic downfall of the hero as is common in Shakespeare tragedies. We see Macbeth and Hamlet both succumb to downfall. perhaps the most obvious deception is Iagos deception. The principal method that Iago uses to convince

Techniques and Effective Marketing for Small Business and Its New Research Proposal

Essays on Techniques and Effective Marketing for Small Business and Its New Approach Research Proposal The paper "Techniques and Effective Marketing for Small Business and Its New Approach" is an excellent example of a research proposal on marketing. The problems regarding small businesses are regarding the cost of health insurance, cost and availability of liability insurance, worker’s compensation, cost of fuel, federal taxes and income, Property taxes, cash flow, state taxes and business income, unfavorable government regulations, and electricity costs are also included. These problems can be mitigated by the efficient marketing of the products and services of small businesses. (NFIB, 2004) As mentioned above marketing is the matter that determines the demand and that can mitigate the problems of any business. This should match the product or the service. The techniques will be different for different products and depend on customer needs. The customer needs, at times, result in an increase in the cost of production, but keeping this in view these also increase the demand for the products and services of the business. The first thing to keep in view is that it is not an event but a process.The small businesses need plans in an ongoing process of marketing. The process of marketing needs the plan of having concrete outlining that concentrates on achieving the targets. The research for marketing is needed as the marketing needs the best plan to ensure success and that is possible by continuously conducting research regarding it. The research regarding marketing minimizes the probability of failure of marketing plans. The research should target on decreasing the misunderst anding of the customers by marketing planners and should develop organized thinking regarding the execution of the plans. The research in marketing can give rise to analyzing tools for measuring the progress of the demand for the business due to marketing plans. There will be business-specific problems and common problems. The two types of problems can be identified and classified by research on these processes as well as the marketing strategies. The techniques that overcome the shortage of funds in marketing and advertising are possible with the research in this area of business. (MSU Extension Department)Identification of ProblemsThe identification of the problems in the marketing will void complacency in the marketing plans of small businesses. The research process in marketing has to devise the methods in marketing that avoid the marketing staff to stand still. However, relying on the same marketing techniques for a long time is a problem in marketing. The identification of the reason for this problem is important and this needs research. The main reason identified until now is that this is due to the lack of innovative ways in marketing and this can be mitigated by conducting extensive research in the marketing methods and strategies.

Business Decisions Theory-Free-Samples -Myassignmenthelp.com

Question: Write a Research Proposal to Support Decision Making. Answer: Introduction Heavenly Chocolates is engaged in manufacturing and selling of the quality chocolate products through its retail outlet. Its retail outlet is located at Hay Market of Sydney. Heavenly Chocolates is offering premium chocolates and dark chocolate pralines for enhancing the satisfaction level of its customers (Heavenly Chocolate, 2017). A website was developed by Heavenly Chocolates ten years ago which was used for meeting the demands of the local people. Two years ago, services of its website were available for international market. This step of Heavenly Chocolates resulted in a rise in the customers and demands for the products offered. Heavenly Chocolates was unable to match up with the demand and lose its online customers due to lack of production capacity to meet the demand. This has affected the customer base, sales, profitability and reputation of the Heavenly Chocolates. Management of Heavenly Chocolates is planning to adopt strategies which will boost up the production process and will contribute towards meeting the demands of the customers. This report will discuss the research carried out for analysing the different strategies. This research proposal will cover the problem statement discussing the problem faced by Heavenly Chocolates along with the objectives behind conducting the research. Objectives will be set for attaining the desired goals of the Heavenly Chocolates. Different methods will be discussed which will be used for the collection of data for the proposed research along with the advantages and disadvantages associated with the method or source of data collection. Recommendations will be given to the management of Heavenly Chocolates for coping with the problem faced by them on the basis of the information collected with the help of primary and secondary sources of data collection. The discussion will be made for analysing the effectiveness of the strategies Heavenly Chocolates is planning to adopt for coping with the problems faced by it due to improper production capacity. Figure 1: Heavenly chocolates Source: (Heavenly chocolate, 2017) Management decision to be made In this dynamic business environment, every organisation is using the internet for the promotion of the business, attracting customers for enhancing customer base and expansion of the area of operation. This motive helps in gaining a competitive advantage over the others in the business environment. Heavenly Chocolates has established a good reputation in the market as it is offering quality chocolates to its customers in Sydney as well as at global level. Heavenly Chocolates is operating in a competitive environment and facing tough competition due to the slow production capacity for meeting the demands. Sales of the Heavenly Chocolates are getting affected due to the inability to meet the increasing demand. This has affected the customer base of Heavenly Chocolates as well as resulted in an increase in the competition for Heavenly Chocolates. This has raised a concern for the management for meeting demands of the customers by adopting strategies. These issues are affecting the expa nsion and growth of the business as well as chances of success of the business. Strategies need to be adopted for the purpose of matching with the increasing demand, retaining customers for gaining competitive advantage and sustaining future growth. Main research objectives Objectives have been formulated for a research with a motive to execute the research in a proper direction by guiding towards the right goal. Heavenly Chocolates is facing issues due to the lack of production capacity required for meeting the increasing demand of the customers. Heavenly Chocolates is planning to conduct a research so as to analyse the manner in which it can cope with the issues faced and enhance the performance by gaining a competitive advantage over the competitors. Objectives of this research proposal are listed below: To analyse the manner in which Heavenly Chocolates can enhance its performance and match up with the increasing demand of the customers. To analyse whether there is a relation between sales and location. To identify the suitability of distribution partnership for the overseas To determine the level of effectiveness of the website in promoting the products offered by Heavenly Chocolates. To analyse the suitability of the location for opening a second retail outlet Sources of data (secondary) Secondary sources can be understood as the second-hand information which other researchers have gathered with a motive to execute their research works (Cheng Phillips, 2014). This form of data is more reliable as it has been used by others. Secondary sources will be used for collecting information related to the competitors and analysis of the business environment (Community Science, 2017). Heavenly Chocolates need to develop the knowledge of the business environment and competitors so as to analyse the measures or strategies it can adapt for resolving the issues faced by it. For the collection of data for executing this research, published data, personnel records, financial reports of the company, journals for analysing market trend and competitor analysis, internet and website of the company will be used (Johnston, 2014). These forms of secondary sources will be used for collecting details related to the company, business environment in which company is operating, analysing the st rategies which can be used by Heavenly Chocolates. It is vital for Heavenly Chocolates to develop an understanding of the different aspects of the business environment so as to select an appropriate strategy. All these forms of secondary sources of data will be used for the analysis of the problems as well as solutions to these problems (Mwamadzingo, 2011). Heavenly Chocolates need to adopt strategies for the problems faced by it as these problems are creating an impact on the overall performance of the company. These strategies need to be analysed with the help of data collected from reliable sources. There are various advantages of using secondary sources of data collection. These advantages include reducing the time, efforts and cost, easy accessibility, helps in collecting specific data, develops a better understanding of the problem and eliminates biasedness (Hox Boeije, 2014). With the advancement of the technology, secondary sources of data get collected in an easy manner which has provided cost, effort and time benefit. The secondary form of data can be collected from the library which ensures that quality data is collected for the identification of the problems and matching with the objectives. Secondary sources are more reliable as they have been collected by others and approved (Lpez, 2017). There are few disadvantages of secondary sources of data and these disadvantages include lack of proper control or check the quality of the data collected, out-dated data, lack of availability of sufficient data and data can be inappropriate. Data collected must be as per the need o f the objectives and problems identified in the research program (Acaps, 2012). Primary data collection method Primary data is the raw form of data which is collected by the researcher specifically for its research program. This form of data is considered less reliable as information collected with the help of primary sources of data may get affected due to personal views of the individual. Original data is collected in the primary source of data collection. Different types of primary data can be collected as per the requirement of the business (Litteacher8, 2012). Heavenly Chocolates will use primary sources of data collection for collecting information related to the business. This information related to the business helps in identifying the capabilities or strengths which will help in enhancing the performance of the business. Primary data will also help in identifying the aspects in which Heavenly Chocolates is lacking. Different types of primary data can be collected and these different types of primary data include interviews, observations, experiments and questionnaire (Flintermann, 20 14). Heavenly Chocolates will use a questionnaire for collecting first-hand information from the employees and regular customers of the company who will help in providing valuable information to Heavenly Chocolates. There are various advantages and disadvantages associated with the use of a primary source of data collection. Advantages of primary sources of data collection include identification of the issues, interpretation of the data in a better manner, provide recent data and reduce the wastage of resources as efforts are directed towards the goals and objectives (Thomas, 2015). There are few disadvantages of primary data collection method which are an increase in the cost of the Heavenly Chocolates, time-consuming process, feedbacks provided may get affected due to personal judgement and requirement of more resources (Weijun, 2008). Heavenly Chocolates will use questionnaire so as to collect the information and analysing the information for implementing the results for improvin g the performance and attaining the objectives. Recommendations Heavenly Chocolates will use the collected information for improving the issues or the problems faced by it. Analysis of the different strategies will help in gaining an understanding of the measures which can help in contributing towards the performance of the business. Heavenly Chocolates will use primary and secondary sources of data which will help in collecting relevant data. This collected information will help management of Heavenly Chocolates is taking decisions regarding the expansion of the business, adopting strategies for enhancing the production capacity, along with the expansion of the customer base and offering the products in the international market. Normative decision theory can be used by Heavenly Chocolates which will help the company in taking best and most appropriate decision that will generate the desired outcome and solve the problems faced by Heavenly Chocolates. Heavenly Chocolates can also adopt decisions theory of management which will help in choosing th e best alternative. Kotters 8 step change model can be used by Heavenly Chocolates for implementing the changes it is planning to implement for coping with the lack of effective production capacity. References Acaps. (2012). Qualitative and Quantitative Research Techniques for Humanitarian Needs Assessment. Acaps. Cheng, H. G., Phillips, M. R. (2014). Secondary analysis of existing data: opportunities and implementation.Shanghai Archives of Psychiatry,26(6), 371375. https://doi.org/10.11919/j.issn.1002-0829.214171 Community Science. (2017). Tips for Collecting, Reviewing, and Analyzing Secondary Data. Community science. Flintermann, B. (2014). The quality of market research reports The case of Marketline Advantage and the automobile industry. University of Twente. Heavenly Chocolate. (2017). About. Heavenly Chocolate. Accessed on: 24 August 2017. Retrieved from: https://www.heavenly-chocolate.com/contact/ Hox, J. J. Boeije, H. R. (2014). Data collection, Primary vs. Secondary. Research Gate. Johnston, M. P., 2014, Secondary Data Analysis:A Method of which the Time Has Come, Qualitative and Quantitative Methods in Libraries, pp. 619 626. litteacher8. (2012). What are three advantages and limitations of primary research data collection?. Enotes. Accessed on: 24 August 2017. Retrieved from: https://www.enotes.com/homework-help/provide-three-advantages-limitations-primary-366466 Lpez, X. S. P. S. (2017). Secondary Data: sources, advantages and disadvantages. Research Gate. Mwamadzingo, M. (2011). Techniques for data collection. ILO. Thomas, J. A., 2015, Using unstructured diaries for primary data collection, Nurse researcher, vol. 22, no. 5, pp. 25. Weijun, T. (2008). Research Methods for Business Students. Shanghai Jiao Tong University.

Shapiro Chapter Solutions Essay Example

Shapiro Chapter Solutions Paper Economic profit measures true increments to value, but is hard to assure. Accounting profit is correlated with economic profit, but not perfectly so. Accounting profit can be measured much more easily. B. What is the relationship between accounting rate of return and economic rate of return? Answer: The accounting rate of return is the ratio of after-tax profit to average book investment. Economic rate of return is the ratio of after-tax economic profit to the market value of the investment Economic profit equals cash accruals to the asset combined with changes in its market value. 2. In 1991, ATT laid a transatlantic fiber optic cable costing $400 million that an handle 80,000 calls simultaneously. What is the payback on this investment if ATT uses just half its capacity while netting one cent per minute on calls? Answer: 5210 Million per year assuming the half capacity is for 24 hours a day, 365 days per year. The annual payback is then 53%. 3. The satisfied owner off new $15,000 car can be expected to buy another ten cars from the same company over the next 30 years (an average of one every three years) at an average price of $15,000 (ignore the effects of inflation). We will write a custom essay sample on Shapiro Chapter Solutions specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Shapiro Chapter Solutions specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Shapiro Chapter Solutions specifically for you FOR ONLY $16.38 $13.9/page Hire Writer If the net profit margin on these cars is 20 percent, how much should an auto manufacturer be willing to spend to keep its customers satisfied? Assume a 9 percent discount rate. Answer: At a 20 percent profit margin, the auto company will earn an annuity to about $3,000 every three years for the next 30 years. Discounted at 9 percent, this annuity is worth $9,402, assuming that the tires new car is purchased three years from today. Hence, an investment to keep customers satisfied will have a positive NAP as long as the amount spent is less than $9,402. Thus, a car company should be willing to spend LIP to $9,402 in present value terms to keep its customers satisfied. A trick is available to calculate the present value of this annuity)h Recognize that an annuity received every three years for 30 years and discounted at 9 percent is equivalent to a 10-year annuity discounted at 29. 5029 percent since each cash flow term is discounted at (I . 09)3 = 1295029. 4. Demonstrate that the following project has internal rates of return of O percent, 100 percent, and 200 percent. Year $1,200 12 13 I Cash flow +7,200 1-13,200 Answer: To demonstrate that an AIR calculation is valid, compute the net present value at the AIR. A valid AIR yields O. I Year | -400. 00 -488. 89 | +88. 9 10 Cash Flow 112 1 13 1 14 I I Total 1-1,200 I-I ,200 | -600 1-1,650 +450 5. During 1990, DOD Chemical generated the following returns on investment in its different business units: Business unit 116. 6 16. 7 Return on Investment (h) I Chemicals/Performance Products I I Consumer Specialties Plastics 12. 7 I Hydrocarbons/Energy Other 111. 15. 2 11. 6 I I DOD Chemical overall Given these returns, which of the business units should DOD invest additional capital in? What additional information would you need in order to make that decision? Answer: These figures tell you what DOD earned in 1990. In order to decide on future investments, you need the following information: 1. Whether these returns are representative of those expected to be earned in the future in these different divisions, What matters for investment decommissioning are projected future returns, not past returns. To the extent that these returns vary widely from year to year-?which they do in the chemical business-?historical return data for one year are meaningless. One reason these data may be misleading is that they are based on historical cost figures for investment. You really want to calculate returns on the replacement cost of sets Inflation will cause asset values to be understated, which will lead the return on investment to be overstated. 2. The cost of capital for these divisions. Each division is likely to have its own risk and, hence, its own cost Of capital. A high return could just indicate a high degree of risk and, therefore, a high required return. What matters is the projected return relative to the cost Of capital. A high projected return that is less than the risk-adjusted cost of capital will yield a negative NAP investment. Conversely, a low projected return that exceeds the cost Of capital Will yield a costive NAP investment. 3. The marginal return on investment in each division. Even if the figures for, say, the plastics and chemical/performance products divisions exceed their cost of capital and are representative of those expected to be earned in the future, that does not automatically justify additional investment in those divisions. These figures tell us the average ROI; for investment purposes you need the marginal ROI. That is, what matters tort investment purposes is not the return on past investments but the return on future investments. As we have seen, many companies (e. G. Monsanto, Philip Morris) have divisions that yield high returns on past investments but very low returns on incremental investments. 4, The extent to which these divisions sell to one another, DOD Chemical is a vertically-integrated company. Its hydrocarbons/energy unit sells to its downstream plastics unit, which in turn sells to its consumer specialties unit. Thus, the profitability of these units depends critically on the prices at which these internal transactions take place. Gore example, the hydrocarbons/energy unit may be showing a low ROI simply because it sells petroleum to the plastics unit at 3 below-market price. That is, the hydrocarbons unit may be very profitable but its profits are showing up in the plastics unit in the form of a low price on raw materials. This is a form Of cross-subordination. Disentangling the true profitability of the different units of a vertically-integrated company like DOD turns out to be a very difficult task, but it is a necessary one for capital budgeting purposes. What matters is how profitable investments are from the standpoint of the overall company, not from the standpoint of the units undertaking those investments, 5, The returns associated with specific assets and activities within each vision. What matters from an investment standpoint is not just how well each division can be expected to do in the future but hove well specific projects within each division can be expected to do. For example, certain products within the profitable plastics division may be earning a return while others are only earning a 2% return. Similarly, certain investments may be expected to yield a high return relative to their rockiness, whereas others have little chance of a significant payoff. At the same time, the low-return hydrocarbons/newer division may have some very high-return projects, which are masked by a lot of value- storing activities elsewhere. Without detailed data on the returns associated with each divisions various activities, customers, and products, one cant say where investment dollars would be best spent. CHAPTER 2: PROBLEMS 1. A firm is considering investing in a project with the following cash flows: I cash Flows 1 15 1 16 117 1 18 II I-I sass. O 2,000. 00 | 3,000. 00 4,000. 00 | 3,500. 00 13,000. 00 1 ,oho. O | 1,818. 18 12,479. 4 13,005. 26 12,390. 55 11,862. 76 11,128. 95 1513. 16 1466. 51 1,818. 18 4,297. 52 17,302. 78 9,693. 33 Ill 12,685. 04 | 13,664. 70 2. The pennon Oil Co. Just decide whether it is financially feasible to open an oil well off the coast of China. The drilling and rigging cost for the well is The well is expected to yield 585,000 barrels of oil a year at a net profit to pennon of $5 a barrel for four years. The well will then be effectively depleted but must be capped and secured at a cost of Pennon requires an annual rate of return of 14 percent on its investment projects. Should Pennon open the well? (Assume all Of a years production occurs at the end Of the year. ) Answer: Net annual profit = = $2. MM. IV(Production) $2_MM _ 2. MM _ 2. 9137 = 58. MM. IV(Capping) = SO. MOM _ = 4 _ 0. 5921 = $2. MM. IV(Drilling) 55. MM. NAP = IV(Production) ? IV'(Capping) = 9. MM 2. MM 5. MM $1. MM. The well should be drilled, since the present value of the benefits exceeds the present value of the costs, The term NAP (Net Present Value) refers precisely to the difference in present value between the benefits and the costs of a project, 3. Jack Nicolas, the golfing pro and real estate developer, is thinking Of acquiring an 800-acre property outside Atlanta that he intends to turn into an exclusive community for 600 families, The cost of this property and the necessary improvements is $30 million. After setting aside a mandatory 25 percent of the property as green space, he figures he can sell the remaining lots for an average of $90,000 an acre. By putting in a golf course on the 200 acres of green space, Nicolas believes he can instead sell the lots for an average of $140,000 an acre. The golf course, including clubhouse, has a projected price tag of $6 million. In either event, the project is expected to take eight years to sell out at a rate of 75 lots per year. Jack Nicolas faces a marginal tax rate of 40 percent and can write off his land and development costs by prorating these costs against each lot old. A. If his required return is 14 percent, should Jack Nicolas go ahead with the initial project (i. E a community With no golf course)? Answer: The initial project, a community With no golf course, requires an initial outlay of $MM, and reaps 6. MM per year for 8 years in the absence of taxes and depreciation. The present value of the decision at r 14% and t -40% can be determined from the following formula: b. Should he put in the golf course? Answer: With the golf course, the cost is MM, and pretax revenues are 10. MM per year. The same calculations as above can be made with the new data: NAP = + (1 -? Nicolas should build the golf course (exactly as we exp ected), a b, * An alternate display is illustrative: Tax ( @ 40%) Choosing Only Twit Golf Course I Annual Sales I Ann. Amortization I I Ann. Pretax Profit I I Ann. After Profit 4. 638864 I cost I Present Value 37,574. 798 .NET Present Value 4. The Coin Coalition is trying to get the U. S. Government to replace the dollar bill with a gold-colored dollar coin. One argument is cost savings. A dollar bill costs 2. 6 cents to produce and lasts only about 17 months, A dollar coin, on the other hand, while costing 6 cents to produce, lasts for 30 years. About 1. 8 billion dollar bills must be replaced each year, The start-up costs of switching to a dollar coin are likely to be quite high, however. These costs have not been estimated. A. What are the projected average annual cost savings associated with switching from the dollar bill to a dollar coin? Answer: Since each dollar bill in circulation lasts an average of I . 42 years (17/1 2), and 1. 8 billion are replaced each year, this must mean that there are about 2. 556 billion dollar bills in circulation. The cost of replacing I billion dollar bills each year at a cost per bill of 2. 5 cents is $46. Million. Since the dollar coin lasts 30 years, only about 85. 2 million (2. 556 billion/30) coins must be replaced each year at an annual cost of $5. 1 million. Thus, the annual cost savings comes to approximately $41. 7 million. B. Taking into account only the cost savings estimated in part a, how high can the start-up costs for this replacement project be and still yield a positive NAP for the LIST. Government? Else an 8 percent discount rate. Answer: The present value of the cost savings perpetuity estimated in part a, discounted at 8 percent, is $41 or $521. 25 million. Hence, the start- p costs for replacing the dollar bill with a dollar coin can be as high as $521. 25 million in present value terms and this project will still yield a positive net present value. . Recent Census Bureau data show that the average income to a college- educated person was $34,391 versus ASS,CLC for those without college. At the same time, the annual tuition at public universities was $1,566 versus $7,693 for private colleges. In the following questions, assume there is no difference in income between public and private university graduates. A. Based on thes e figures, what is the payback period for a college education, akin into account the four years of lost earnings while being in college? Do these calculations for both public and private colleges. Answer: Based on the figures presented, the lost income during four years of college is 4 * 524,701 = 598,804 (if they dont go to college they earn Nan-college incomes). The cost of the four years of college at a public (private) university is 56,264 ($30,772). Combining these figures yields a total (undiscovered) cost for a public university of $105,068. For a private college. This cost comes to $129,576. The income advantage to a college education is 59,690 (534,391 . $24,701). From radiation, it takes 105,068/3,690 = 10. 4 years to recover the cost of a public university education. The equivalent figure for a private college is 129,576/9,690 13. 37 years. B. Assuming college graduation at age 22 and retirement at age 65, what is the internal rate of return on a college degree from a public university? A private university? Answer: For a public university, the cash flows are four years of annual net cash outflows equal to $26,267 ($1 ,566 + $24,701) and then 43 years of net cash in flows equal to $9,690 annually, Whether all these cash flows occur at the beginning or end of the year, the AIR equals 7. Percent (the timing of the cash flows doesnt matter because you are just multiplying the NAP-?which must equal zero-?by a constant). Poor a private university, the cash flows are four years of annual net cash outflows equal to $32,394 ($7,693 + $24, 701) and then 43 years of net cash inflows equal to 59,690 annually. The AIR based on these numbers is 6. 32 percent. C. Assuming a 7 percent discount rate, and the same working life as in part b, what is the net present value of a college degree from a public university? A private university? Answer: Assuming all cash flows occur at the end Of the year (here the timing goes matter), the NAP for a public university education is $10,878. For a private college, the WV is . $9,876. 6. The Fun Foods Corporation must decide on what new product lines to introduce next year, After-tax cash flows are listed below along with initial investments. The firms cost of capital is 12 percent and its target accounting rate of return is 20 percent, Assume straight-line depreciation and an asset life of five years. The corporate tax rate is 35 percent. All projects are independent. I Project | $1,250 | 1,200 I Yearly I Investment $3,000 I s,coo 11,200 | 55,000 12,400 $800 17,500 ,000 $1,000 1,250 4,000 14 | 5350 | 600 a. Calculate the accounting rate of return on the project. Which projects are acceptable according to this criterion? (Note: Assume net income is equal to after-tax cash flow less depreciation. ) I Project A Total AT Cash Flow I Total Depreciation I Net Income Avgas Net Income | 5400 shoo 11400 1280 Project B 116750 7500 9250 Project C 18400 14000 | 4400 1880 Cacti Rate of return (Average Net Income Average Book NV) ABA = Total depreciation/2. I 49. % Projects 8 and C are acceptable based on a 20% accounting rate of return. B. Calculate the payback period. All projects with a payback of fewer than four years are acceptable. Which are acceptable according to this criterion? Answer: Assuming depreciation effects are included in the cash flows: Payback A (years) 4. 53, Payback B Payback C 3,42_ Projects B and C are acceptable. Assuming depreciation h as not been included: Payback A (years) = 4. 06, Payback B = 2. 73, Payback C = 3. 06. Projects B and C are c. Calculate the projects Naps. Which are acceptable according to this criterion? Answer: NAP IV(After Tax Cash Flows) -? Initial Investment Assuming depreciation has already been incorporated: NAP A?$742. 2, NIB- 33801. 83, C 51574. 01. Projects B and C are acceptable. If depreciation has not been incorporated, and all writers Gang be used: NAP = IV(After Tax Cash Flows)-? Nit NV IV(Deep Tax Shield) NAP A- $518. 95, NAP B = ASSESS,34, NAP C = $2583. 34, All projects are acceptable. D. Calculate the projects IR, Which are acceptable according to this Answer: AIR is the discount rate that makes NAP = 0. Depreciation included: AURA= 7. 0%, AIR 27. %, Projects B and C are acceptable. (AIR > 12%) Depreciation not included: AURA= 15. 43%, All projects are acceptable. (AIR > 12%) e. Which projects should be chosen? Answer: The firm should follow the guidelines of the NAP rule. 7. Aptest, Inc. , is negotiating with the U. S. Department of Housing and urban Development (HUT) to open a manufacturing plant in South Central L. A. , the scene of much of the rioting in April 1992. The proposed plant will cost $3. 5 million and is projected to generate annual after-tax profits of $550,000 million over its estimated tour-year elite. Depreciation is straight-line over the tour-year period and Aptest;s tax rate is 35 percent, However, given the risks involved, Aptest is looking for a tax-exempt government subsidy. According to Aptest, the subsidy Just be able to achieve any of the following four objectives: (l) Provide a 2-year payback. (2) Provide an accounting rate of return of 35 percent. (3) Raise the plants AIR to 22 percent. (4) Provide an NAP of $1 million when cash flows are discounted at 18 percent. A. Poor each alternative suggested by Aptest, develop a subsidy plan that minimizes the costs to HUT of achieving Pates objective. You can schedule the subsidy payments at any time over the four-year period. Answer. Here are the alternatives With their costs: Payback. The annual cash flow,s are the sum of after-tax profits plus depreciation of $306,250 or $856,250. The sum of the first two years cash flows is $1 , 712,500. To bring the payback to two years will require a subsidy of $1 ; $1 Since the computation of payback is insensitive to when the subsidy is paid, as long as it happens within the two-year period, the present value of its cost can be minimized by providing it at the end of year 2. AIR. The accounting rate of return is 31. 43% In order to bring this up to 35%, it is necessary to bring average annual income up to $612,500 , 750,000), an average annual increase of 62,500. The subsidy will equal $250,000 Since the computation of AIR is insensitive to when the busily is received, its present value can be minimized by providing it at the end of the four years. AIR. With a subsidy of at time O, thereby lowering its net investment to Aptest will get its AIR up to 22%. Any delay will result in a correspondingly higher required subsidy (it will accrue at the rate of 22% annually. Or example, if the subsidy were to be provided at the end Of the first year, it would have to equal $1 ? 1. 22) to get Aptest AIR up to 22%. Hence, HELD Will minimize its costs Of getting Pates AIR up to 22% by providing the subsidy immediately instead of waiting. NAP. The NAP of the project, discounted at 18%, is (1,196,635). Hence, a subsidy equal to $1 , 196,635 that is paid up front will just pr ovide a zero NAP when discounted at 18%. The subsidy will rise at the rate of 18% annually if it is paid in a future year. B. Which of the four subsidy plans would you recommend to HUT if it uses a 15 percent discount rate? Answer. The winning subsidy plan is that associated with the AIR criterion, go paying $250,000 at the end of the tour-year period, the present value of Huts cost when discounted at will be $142,938. 8. The Fast Food chain is trying to introduce its new Hot and Spicy line of ambushers. One plan (S) will include a big media campaign but less in-house production capability. The other plan (L) will concentrate on a more gradual roll- out of the project but will involve more investment in personnel training and so forth.