Wednesday, August 26, 2020
Overseeing Finance - Essay Example All costs engaged with the production of merchandise should be caught by the costing framework received by an organization. The technique for such expense catching relies upon the manufacturerÃ¢â¬â¢s business, and the type(s) of items made. The two significant strategies for costing are (a) Process Costing, and (b) Job Costing (Martin, 2009?). Procedure costing is the typical technique for catching the expense in most assembling ventures particularly when the items are delivered in huge numbers utilizing a grouping of dreary activities. Commonly, the items are normally indistinguishable and can not be isolated. Under this technique, the expense of item is known toward the finish of a specific assembling activity. The expense of each procedure (or division) is caught utilizing one of the costing methods. The immediate cost owing to the item is determined by division, and roundabout expenses are assigned to the items. Businesses ordinarily incorporate materials, coal, cigarettes, shoes, gas, steel, glass, vehicles, gas, water, power, and so forth. Employment costing is utilized for ventures where assembling happens against a particular request. This strategy is valuable for following the expenses of one of a kind items, which are generally produced to a particular request. In this costing procedure, costs are gathered by occupations, parcels, or clumps. Enterprises that utilization this costing strategy incorporate shipbuilding, development ventures, enormous agreements, work printing, and so on. Retention costing is otherwise called Full Costing. Under this framework, all immediate assembling expenses, and all assembling overheads (counting fixed and variable overheads) are designated to the items. This costing idea is suggested for outer announcing according to Accounting Standards Committee (SSAP 9). The restriction of this framework is that the item expenses can not be utilized for interior dynamic as they would tend to
Saturday, August 22, 2020
Legal executive - Essay Example This is the law based standard revered in the Constitution, the standard of law to forestall the oppression and furthermore keep up peace. To accomplish this end, the three establishments of an equity framework are the police for the implementation work, the criminal equity framework for court preliminaries, lastly, the redresses or the jail framework to imprison and restore those sentenced for wrongdoings against society. Individuals from the criminal equity framework, for example, the investigators, barrier lawyers, and judges or judges should consistently actualize and decipher the law with integrity, reasonableness, equity, uniformity, and solidarity in the quest for human rights assurance for all, activity their capacity without dread or favor. All the said individuals must act in a moral way consistently, liberated from any debasement, and not affected by any thought aside from ethics B. Conversation The legal executive plays out its capacities with the most extreme reasonablen ess and uniformity; how judges must actualize or decipher the law with no impact or weight from anyone, so residents will have confidence and trust in their equity framework, as their incomparable defender against abuse by influential people or compelling weight gatherings. Be that as it may, it is likewise confronted with various issues or issues it must address so it can do its order sufficiently. 1. Legal morals Ã¢â¬ individuals from the legal executive are brought to a better quality than others, they being relied upon to maintain the law consistently so individuals will likewise regard the law. The establishment of law depends on the legitimacy of common morals inside pluralism (Cortina, 2000). a. Serious vow Ã¢â¬ this is a suggestion to consistently adhere to the best way to live, notwithstanding enticements en route in execution of obligations. Debasement has been a bane, since individuals will in general take hush-money or different contemplations of significant worth (Mon tinola and Jackman, 2002). b. Authorizations Ã¢â¬ the legal executive doesn't take excessively compassionate to its blundering individuals and forces an assortment of measures, for example, fines, suspensions, disbarment, and even detainment. c. Set of accepted rules Ã¢â¬ individuals from the legal executive must be cautious in their activities consistently, to maintain the uprightness and autonomy of the legal part of government. Norms are contained in the legal groups gave by the Supreme Court, to incorporate such issues as the evasion of any inappropriateness, or even only the minor appearance of inappropriateness, and to keep away from any divided political movement whatsoever occasions, for example, battling for a specific gathering or up-and-comer. It is a corresponding branch and should practice its autonomy consistently (Fox and Stephenson, 2011). 2. Why individuals carry out violations Ã¢â¬ there will consistently be degenerates in any general public. Why these individua ls carry out wrongdoings in spite of the assurance of discipline made sociologists offer their speculations. a. Anomie hypothesis Ã¢â¬ this was presented by prominent French humanist Emile Durkheim, in his book The Division of Labor in Society distributed in 1893, which clarifies the cutting edge marvel of aberrance, coming about because of sentiments of insufficiency and uncertainty, originating from the industrialization of society, causing normlessness from loss of qualities and conventions (Franzese, 2009); anomie sees lawbreakers as casualties of society, unfit to adapt, and not as unimportant freaks. b. Strain hypothesis Ã¢â¬
Tuesday, August 18, 2020
Professional Business Plan Example Professional Business Plan â" Essay Example > Hotel Entertainment Centre for PetsIntroductionPets have become a part of man social life. Apart from enriching the environment by providing scenic beauty that tourists enjoy, pets play an important role in providing companionship in the lives of human beings in this current era. Dogs, cats, snakes, tortoise, and beautiful gold fish among others, have been used in various situations as pets. The business plan in this case will narrow down to common pets that are kept by majority of people. In this regard, Cats and dogs will be the most appropriate pets that will be referred to throughout this business plan. Various economic assumptions will be used to describe the business environment within which this enterprise will exist. Market NeedsPets have majorly been neglected to animal activists and health specialists who provide the important health services that are needed for the survival of these pets. Most owners of pets do not treat the right owing to the busy schedule of modern d ay bustle and the congestion in urban life. Due to lack of time and increased pressures in life, pet owners allocate very little time for their pets. With most entertainment joints concentrating on adults and children, pets are left to wallow in the boredom of drudgery life. People who sometime pay little attention to their pets will often want the same pets to accompany them to social gathering where the pets are not provided with any form of entertainment to cheers them up. Many people treat pets in a cold way for absence of a variety of services they can offer to them apart from feeding, cleaning and according them treatment in case of an infection. Therefore, if there is an entertainment hotel and centre for pets, pet owners will have an opportunity of giving a treat to their pets for their cordial companionship. Absence of entertainment joints for pets makes pet owners to confine pets or leave them secluded at home for lack of a good place to walk them, or owing to tight sche dules for work. Consequently hotel and entertainment center for pets will provide a place where different pets (dogs and cats), will come to have fun in the company of their owners! The owners will have a chance to interact with other and learn the challenges that come with keeping some types of pets. Evaluation the market needs for pets shows that boredom and secluded lives leads to unhappy pets that make terrible companionship. The congestion in major cities that has been brought about by population upsurge makes it tricky for pet owners to attend fully to their pets just with their home (Pinson, 2004). A hotel and entertainment center for pets will offer a variety of services and goods that will be very necessary for pet owners. Pollutions in major cities of the world make it hard to find safe places where pet owners can walk their pets. Therefore, a hotel and centre for pets will be a good opportunity as a business venture in this era.
Sunday, May 24, 2020
COMPREHENSIVE CASE SOLUTIONS Ã¢â¬â CHAPTERS 12 - 21 NOTE: The cases related to these solutions are posted on our website www.mcgrawhill.ca/olc/buckwold. They are not printed in the text. Solution to COMPREHENSIVE CASE ONE Seacourt Restaurants All of the issues in this case have been examined in depth in problems and cases of previous chapters and therefore the following solution briefly refers to the main issues of each segment. Where applicable, tax rates are assumed to be: Individual Corporation - dividends (eligible) - dividends (ineligible) - other income - SBD income - ABI over $500,000 - investment income 28% 33% 45% 15% 25% 44 2/3% (38 + 6 2/3) Incorporation of Proprietorship The primary benefit of incorporation is the ability toÃ¢â¬ ¦show more contentÃ¢â¬ ¦This still leaves the old corporation with a value equal to $1,140,000 plus the value of the other assets substituted for the property transferred out. While certain steps could be taken to perhaps alleviate this problem, they are rather complex and beyond the scope of this question (see section 55). However, by tracing the process of moving out the land and building, the student will see the roadblocks that appear. A much simpler approach is to transfer the business assets (inventory, equipment and goodwill) to a separate entity (new corporation or partnership) that is owned by the existing corporation and Spud. Whether the new entity is a corporation or partnership, the transfer of the business assets to it will automatically be at fair market value unless an elected amount is chosen for tax purposes. As Court will continue to own 80% of the business, it is unlikely that he would be prepared to incur a tax liability on the full value. Therefore, the election option is recommended. As Spud has no money to contribute to the new entity, one possibility is the following: A new corporation is organized by issuing 80% the of common shares to the Courts existing corporation and 20% to Spud in exchange for a nominal contribution of capital (say $8 for Court and $2 for Spud). The new corporation buys the business assets for $1,140,000 (using the elected values for tax purposes) and pays Courts corporation with the required combination of debt and preferredShow MoreRelatedThis Is Solution to Chapter Problems and Key Concept Questions13492 Words Ã |Ã 54 PagesBuckwold and Kitunen, Canadian Income Taxation, 2010-2011 Ed. CHAPTER 10 INDIVIDUALS: DETERMINATION OF TAXABLE INCOME AND TAXES PAYABLE Review Questions 1. Briefly explain the difference, for individuals, between net income for tax purposes and taxable income. 2. Explain the difference between an allowable capital loss and a net capital loss. 3. Describe the tax treatment of net capital losses. 4. Explain how a non-capital loss is created and how it is treated for taxRead MoreEbooks Solution Manuals and Test Banks for Text Books19223 Words Ã |Ã 77 Pagesregarding Solutions and Test Bank for courses. We hope that you people will like our service and get better grades. Please Contact us @ : Ã email@example.com Ã firstname.lastname@example.org Use CTRL + F to search the titles you looking for , if the title you searching is not in the list, do not worry, send us an email at email@example.com and we shall try to provide you requested data.Ã =============================================================== Jr. 12 Solution Manual Ã ¡ArribaRead MoreA Discussion on the Badges of Trade1433 Words Ã |Ã 6 Pagespresence or absence of common features or characteristics of trade. 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Supplementary work on or in connection with the property realized Firstly weÃ¢â¬â¢ll discuss Supplementary work on orRead MoreChapter 1 Understanding and Working with the Federal Tax Law Solutions to Problem Materials6022 Words Ã |Ã 25 PagesCHAPTER 1 UNDERSTANDING AND WORKING WITH THE FEDERAL TAX LAW SOLUTIONS TO PROBLEM MATERIALS Question/ Problem 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Learning Objective LO 1 LO 2 LO 2 LO 2 LO 2 LO 2 LO 2 LO 2 LO 2 LO 2 LO 2 LO 2 LO 2 LO 2 LO 2 LO 2 LO 2 LO 2 LO 2 LO 2 LO 2 LO 2 LO 2 LO 2 LO 2 LO 3 Topic Revenue neutrality Controlling the economy Encouraging industries Research and development expenditures Social considerations Earned income credit CharitableRead MoreAccounting Software For A Business Essay1257 Words Ã |Ã 6 Pagesimplement a total business solution which supports major functionalities of a business. Enterprise resource planning (ERP) software is designed to meet this need, and has been widely adopted by organizations in developed countries. Meanwhile, ERP is beginning to appear in many organizations of developing countriesÃ¢â¬ . In Australia small and medium enterprises does not comply with the accounting principles because they have no legal obligation to do so, but they must comply with taxation provisions. The researchRead MoreSyllabus: Business Communication and Report Writing2672 Words Ã |Ã 11 Pages |100 |4 | | |Computer and Information Technology |100 |4 | | |Taxation in Bangladesh |100 |4 | | |Business Statistics (In English) |100Read Moreintermediate accounting 2 test bank Essay8318 Words Ã |Ã 34 PagesIntermediate Accounting Kieso 15th Edition Test Bank Click here to download the solutions manual / test bank INSTANTLY!!! http://www.solutionsmanualtestbanks.com/2013/05/intermediate-acc ounting-kieso-15th-edition-test-bank.html Intermediate Intermediate Intermediate Intermediate Accounting Accounting Accounting Accounting Kieso Kieso Kieso Kieso 15th Edition Test Bank 15th Edition Test Bank Weygandt Warfield 15th Edition Test Bank Weygandt Warfield 15th Edition Test Bank Read MoreNew York State Department Of Taxation And Finance1919 Words Ã |Ã 8 Pagesgovernments. The revenue collected from taxes goes up to $1 billion annually , but the amount was still low and the process of collection in Department of Taxation and Finance (DTF) needed improvements. The DTF of New York State worked with IBM to use prescriptive analytics in the development of a more effective approach to tax collection. The system optimizes the collection procedures of agents with appreciation to maximizing long-term incomes, while taking into account the complex dependencies amongRead Moreglobal investor Essay2396 Words Ã |Ã 10 PagesBusiness University of Southern California Global Investors, Inc. Teaching Note Purpose of Case This case was written to illustrate a transfer pricing problem in a service setting, here an investment management company. The issues and solutions are not as obvious as in a manufacturing setting where one division produces parts that are transferred to another division for further processing. The case is a disguised version of a real conflict in which emotions were running high. The caseRead MoreSolution Manual, Test Bank and Instructor Manuals34836 Words Ã |Ã 140 Pagesany solution manual, testbank for testbooks from the list, do contact us anytime, we provide competitive prices and fast delivery after payment done. Contact us: firstname.lastname@example.org smtbportal(at)gmail(dot)com 2010 Corporate Partnership Estate and Gift Tax with HR Block TaxCut 4e Pratt Kulsrud Solution Manual 2010 Corporate Partnership Estate and Gift Tax with HR Block TaxCut 4e Pratt Kulsrud Test Bank 2010 Federal Taxation with HR Block TaxCut 4e Pratt Kulsrud Solution Manual 2010
Wednesday, May 13, 2020
Sample details Pages: 3 Words: 982 Downloads: 1 Date added: 2019/03/28 Category Society Essay Level High school Tags: Discrimination Essay LGBT Essay Did you like this example? Before I get too far I want to talk about the LGBT acronym. Lgbt is the more commonly used term but the official term is actually LGBTIQCAPGNGFNBA this stands for Lesbian, Gay, Bisexual, Transgender, Intersex, Queer, Curious, Asexual, Pansexual, Gender-non-conforming, Gender-Fluid, Non-binary, and Androgynous. I believe that equality is being able to be who you are without the fear of judgment or persecution (as long as you are not causing anyone else any harm). People should not have to worry about getting jumped because of their race, gender, and/or sexuality. I believe that everyone has the right to representation in the government, free good quality education. I believe that everyone has the right to a voice to speak out for what they believe in. I believe that every person of every country is entitled to basic human rights and protections. But sadly the lgbt+ community has been the target of hatred and violence for hundreds of years. They have been killed and tortured for just being who they are. For this project I have decided to focus on the legal side of the lgbt+ discrimination, starting with colonial America all the way to modern day. DonÃ¢â¬â¢t waste time! Our writers will create an original "Legal discrimination against the LGBT community" essay for you Create order In 1624 Richard Cornish, an English ship captain was hung for an alleged homosexual act with an indentured servant, William Couse. the act in question was actually a rape, now most of the time they would handle a Ã¢â¬Å"straightÃ¢â¬ rape very differently, most times there would be fines and public wipings for both parties, sometimes the attacker would be forced to leave the colony, and the most shocking thing is that if the victim was not married they would often be encouraged to marry their attacker. Although this is sodomy and the punishments for where often way more dramatic than some other crimes, and in 1636 in Massachusetts, Reverend John Cotton, the preeminent minister and theologian of the Massachusetts Bay Colony. Proposed to include Ã¢â¬Å"sexual relations between womenÃ¢â¬ into the definition of sodomy for the first time, and if you do not know what sodomy is, sodomy is sexual intercourse involving anal or oral. Only is 1777 Thomas Jefferson revised Virginia law to m ake the punishment of sodomy mutilation (cutting off or injuring a body part of a person so that the part of the body is permanently damaged, detached or disfigured) rather than execution. From around 1880-1920 America experienced an influx of immigrants trying to come to America, by 1920 4 million immigrants had entered the united states. Buring this time the government put in laws to help control the number of people in the USA, such as in 1917 lawmaker put into effect a ban that prevented persons with abnormal sexual instincts from coming into the United States. In 1947 under President Trumans national security loyalty program, the state department started firing suspected homosexuals. By 1955 anti-gay Ã¢â¬Å"witch huntsÃ¢â¬ caused more then 1200 people to lose their jobs with the federal government, going along with this president Eisenhower issued executive order #10450, this order authorized broad categories of American citizens identified as Ã¢â¬Å"threatsÃ¢â¬ to national securityÃ¢â¬âincluding those with criminal records, alcoholics, and Ã¢â¬Å"sex pervertsÃ¢â¬ Ã¢â¬âto be excluded or terminated from federal employment. Latter many states and local government adopted similar policies. Only in 1995 did President Bill Clinton sign an executive order forbidding the denial of security clearances on the basis of sexual orientation. However, Being closeted and vulnerable to blackmail was still a possible grounds for a clearance denial. With the first March on Washington for Lesbian and Gay Rights, in 1979, over 100,000 people joined the protest. The march nationalizes the gay movement, which had been more focused on local struggles in the past. With the closing section of the welcome program of the march, authored by Allen Young, you can really feel the vide of the whole march. Today in the capital of America, we are all here, the most liberated and the slightly repressed; the butch, the femme and everything in-between; the androgynous; the monogamous and the promiscuous; the masturbators and the fellators and the tribadists; men in dresses and women in neckties; those who bite and those who cuddle; celebates[sic] and pederasts; diesel-dykes and nelly queens; Amazons and size queens, Yellow, Black, Brown, White, and Red; the shorthaired and the long, the fat and the thin; the nude and the prude; the beauties and the beasts; the studs and the duds; the communes, the couples, and the singles; pubescents and the octog enarians. Yes, we are all here! We are everywhere! Welcome to the March on Washington for Lesbian and Gay Rights! on June 26, 2015, in a 5-4 decision the U.S. Supreme Court ruled that all state bans on same-sex marriage and on recognizing same-sex marriages performed in other jurisdictions are unconstitutional under the equal protection clauses of the Fourteenth Amendment to the U.S. Constitution. Equal marriage is something that LGBT+ citizens have been fighting for since the Ã¢â¬â¢70s. There are lots of groups looking to help fight for gaining lgbt+ rights in America such as a group called Gay and Lesbian Advocates and Defenders (GLAD). GLADÃ¢â¬â¢s main focus is to abolish outdated laws and stereotypes that denied LGBT+ people basic protections and opportunities of daily life, one of the cases that they participated in is Good v. Iowa Department of Human Services. IowaÃ¢â¬â¢s Medicaid program provides coverage for medically essential care for an extensive variety of medical conditions. However, Iowa denies transgender humans Medicaid coverage for a gender-affirming surgical operation to treat gender dysphoria, a medical situation only experienced by human beings who are transgender, even though Medicaid coverage is provided for the same surgical procedures for other medical conditions. This discriminatory ban on coverage has no basis in medical science and has been uniformly condemned through leading clinical organizations. The case challenged the ban as a viol ation of the Iowa Civil Rights Act (Ã¢â¬Å"ICRAÃ¢â¬ ) and the Iowa ConstitutionÃ¢â¬â¢s equality guarantees. Sadly the case was dismissed.
Wednesday, May 6, 2020
AP World HistoryMilo Romney Caesar Augustus10/27/12 What happens when a man tries to take over a republic? Well most of the time that man gets stabbed several times by his friends and colleagues. This is at least what happened to the famous Julius Caesar. Later on his adopted son Octavian would try the same thing; however, he used very different tactics that led to a much happier ending, transforming Rome into a very strong and influential empire. We will write a custom essay sample on Caesar Augustus Essay or any similar topic only for you Order Now It was the mid-1st century B. C. E. , Rome was ever-growing and the republic that once ran very smoothly was encountering many problems within itself. Wealthy land owners or patricians were gaining too much power and land and since Roman law read that only land owners could serve in the military much of the military power was reduced. Some people tried to change this, for example Tiberius, but his ideas were seen as controversial and he was assassinated in 133 B. C. E. One man named General Marius instituted a law stating that men didnÃ¢â¬â¢t have to own land to serve in the military. Soldiers still wanted land in return for their service though, and the general gave them land but this made soldiers more loyal to army officials rather than to the senate. After Marius retired Rome experienced a brief time of peace only to be broken by the Social War. The Social War was caused by the revolting of lower class Italians that were not entitled to full-citizenship and voting rights. This caused General Marius to come back. He ended the war and seized power of Rome. Marius died of old age and Rome started to become restless. In all of the turmoil there arose a powerful politician, Julius Caesar. Caesar created the First Triumvirate (three men) consisting of Caesar, Crassus, and Pompey (also known as Magnus). The Triumvirate really only made these men more powerful though and really didnÃ¢â¬â¢t help Rome overall. The Triumvirate disappeared when Crassus died and Caesar and Pompey started to fight. Caesar invaded Rome in 49 B. C. E. and became a dictator there. Then later Pompey was murdered in Egypt in 48 B. C. E. Julius increased the senate from 600 to 900 members to give himself more supporters. In five years Caesar held many powerful offices and almost succeeded in transforming Rome into an empire but was assassinated on the Ides of March in 44 B. C. E. Many wars took place after the assassination of Julius Caesar. His adopted son, Octavian, and his friend both formed the Second Triumvirate and defeated Caesars assassins in the Battle of Philippi. Many senators were killed during this time and it was not a good time for the republic. Eventually the Second Triumvirate dissipated and Octavian and Mark Antony turned on one another. Mark Antony married Cleopatra of Egypt and they committed suicide when Octavian invaded Egypt. Octavian became Augustus (exalted one) and now unofficially ruled Rome. Augustus knew that in order to successfully transform Rome into an empire he had to succeed where his father hadnÃ¢â¬â¢t. He supported the arts and technology. He rebuilt temples and created road systems. He pleased his people with holidays and special events. Augustus would even give free bread and wine to all of RomeÃ¢â¬â¢s citizens. The senate just had to sit and watch as Caesar Augustus became the total dictator of Rome. Literature grew exceedingly during this time. Under AugustusÃ¢â¬â¢ rule Rome entered the Pax Romana, the peaceful and golden age of Rome. So in the end Augustus obviously succeeded in the areas where Julius didnÃ¢â¬â¢t. Julius didnÃ¢â¬â¢t utilize his resources as well and didnÃ¢â¬â¢t realize that he needed to take away the senateÃ¢â¬â¢s power not enhance it. Augustus extended Rome to a great power and eventually fully ended the once-renowned republic. In a completely unnecessary comparison this story totally reminded me of the movie Star Wars, the fall of the republic and the birth of an empire. Anyways in conclusion, Augustus transformed Rome into an empire by gaining the loyalty of the citizens and soldiers while the senate lost its power. This man was so dominant that he even named the month of August after himself! Not many could have accomplished what Caesar Augustus did and many still marvel at his feats to this day. How to cite Caesar Augustus Essay, Essay examples
Monday, May 4, 2020
Questions: 1.Calculate the NPV, Non-Discounted Payback, and the IRR of Plant A and Plant B. Interpret your results. (If relevant, state any assumptions you have made.)2.Describe and Analyse 4 keys risks associated with the Project you recommend (Project A or B). 3.Briefly define an Efficient Capital Market. To what extent is Equators ability to borrow funds in the Capital Market dependent upon the Capital Market Operating in an Efficient Manner? Answers: 1.Equator Ltd, an Australian manufacturer of laptop computers, is considering expanding its Australian operation into producing tablet computers. For this expansion the CFO has two options. The first option, Plant A, is a highly automated process that involves significant capital outlays but has lower running costs. Plant B is a more labour intensive facility that has lower initial capital outlays but higher running costs. Plant A and Plant B are mutually exclusive projects. A capital budgeting analysis of both the options was carried out to decide which project the company must choose to manufacture the tablet computers. The incremental cash flow for both the projects is presented below: PLANT A Year 0 1 2 3 4 5 6 Sales Units 155000 163525 172518.875 182007.4131 192017.8208 202578.801 Selling price $320.0 $331.2 $342.8 $354.8 $367.2 $380.1 Revenue $4,96,00,000.0 $5,41,59,480.0 $5,91,38,090.2 $6,45,74,359.1 $7,05,10,357.1 $7,69,92,021.7 Cash operating expenses: Variable cost $33,79,000.0 $35,64,845.0 $37,60,911.5 $39,67,761.6 $41,85,988.5 $44,16,217.9 Labour costs $22,01,000.0 $23,22,055.0 $24,49,768.0 $25,84,505.3 $27,26,653.1 $28,76,619.0 Fixed costs $6,00,000.0 $6,00,000.0 $6,00,000.0 $6,00,000.0 $6,00,000.0 $6,00,000.0 Sales and marketing exp. $19,00,000.0 $19,66,500.0 $20,35,327.5 $21,06,564.0 $21,80,293.7 $22,56,604.0 Total cash operating expenses $80,80,000.0 $84,53,400.0 $88,46,007.0 $92,58,830.8 $96,92,935.3 $1,01,49,440.8 Depreciation $29,20,083.3 $29,20,083.3 $29,20,083.3 $29,20,083.3 $29,20,083.3 $29,20,083.3 Total operating expenses $1,10,00,083.3 $1,13,73,483.3 $1,17,66,090.3 $1,21,78,914.2 $1,26,13,018.6 $1,30,69,524.1 Operating income before taxes $3,85,99,916.7 $4,27,85,996.7 $4,73,71,999.9 $5,23,95,445.0 $5,78,97,338.5 $6,39,22,497.5 Tax @30% $1,15,79,975.0 $1,28,35,799.0 $1,42,11,600.0 $1,57,18,633.5 $1,73,69,201.6 $1,91,76,749.3 Operating income after taxes $2,70,19,941.7 $2,99,50,197.7 $3,31,60,399.9 $3,66,76,811.5 $4,05,28,137.0 $4,47,45,748.3 After tax operating cash flow $2,99,40,025.0 $3,28,70,281.0 $3,60,80,483.2 $3,95,96,894.8 $4,34,48,220.3 $4,76,65,831.6 Terminal year after tax non operating cash flow After tax salvage value $86,29,500 Return of net working capital $35,00,000 Initial investment -$12,65,00,000 Total after tax cas flow -$12,65,00,000 $2,99,40,025.0 $3,28,70,281.0 $3,60,80,483.2 $3,95,96,894.8 $4,34,48,220.3 $5,97,95,331.61 Discount at 13.35% $1.0 $0.882 $0.778 $0.687 $0.606 $0.534 $0.471 Present value of cash flows -$12,65,00,000.0 $2,64,13,784.7 $2,55,83,524.1 $2,47,74,663.9 $2,39,86,950.1 $2,32,20,115.2 $2,81,92,794.9 NPV = sum of present value of all cash flows = $25,671,833 IRR = 20% (using the excel formula) Payback period Year Amount Cumulative value 0 -$12,65,00,000.0 -$12,65,00,000.0 1 $2,99,40,025.0 -$9,65,59,975.0 2 $3,28,70,281.0 -$6,36,89,694.0 3 $3,60,80,483.2 -$2,76,09,210.8 4 $3,95,96,894.8 $1,19,87,684.1 5 $4,34,48,220.3 $5,54,35,904.4 6 $5,97,95,331.6 $11,52,31,236.0 Payback period = 3+(-$2,76,09,210.8 / $3,95,96,894.8) = 3.7 years Working Notes 1. Initial Investment Land $1,16,50,000 Building $8,20,00,000 Machinery $2,61,50,000 Furnishing fittings $32,00,000 Increase in working capital $35,00,000 $12,65,00,000 2. Terminal value Salvage value $86,29,500 Book value $86,29,500 Profit on sale $0 Terminal value $86,29,500 Depreciation Machinery $2,61,50,000 Salvage value 33% $86,29,500 Depreciable value $1,75,20,500 Depreciation $29,20,083.33 The incremental cash flow for project B is presented below: Year 0 1 2 3 4 5 Sales Units 95000 100225 105737.375 111552.9306 117688.3418 Selling price $440.0 $455.4 $471.3 $487.8 $504.9 Revenue $4,18,00,000.0 $4,56,42,465.0 $4,98,38,148.6 $5,44,19,520.4 $5,94,22,034.8 Cash operating expenses: Variable cost $34,01,000.0 $35,88,055.0 $37,85,398.0 $39,93,594.9 $42,13,242.6 Labour costs $23,75,000.0 $25,05,625.0 $26,43,434.4 $27,88,823.3 $29,42,208.5 Fixed costs $8,00,000.0 $8,00,000.0 $8,00,000.0 $8,00,000.0 $8,00,000.0 Sales and marketing exp. $28,00,000.0 $28,98,000.0 $29,99,430.0 $31,04,410.1 $32,13,064.4 Total cash operating expenses $93,76,000.0 $97,91,680.0 $1,02,28,262.4 $1,06,86,828.2 $1,11,68,515.6 Depreciation $13,60,100.0 $13,60,100.0 $13,60,100.0 $13,60,100.0 $13,60,100.0 Total operating expenses $1,07,36,100.0 $1,11,51,780.0 $1,15,88,362.4 $1,20,46,928.2 $1,25,28,615.6 Operating income before taxes $3,10,63,900.0 $3,44,90,685.0 $3,82,49,786.2 $4,23,72,592.2 $4,68,93,419.2 Tax @30% $93,19,170.0 $1,03,47,205.5 $1,14,74,935.9 $1,27,11,777.7 $1,40,68,025.8 Operating income after taxes $2,17,44,730.0 $2,41,43,479.5 $2,67,74,850.3 $2,96,60,814.5 $3,28,25,393.5 After tax operating cash flow $2,31,04,830.0 $2,55,03,579.5 $2,81,34,950.3 $3,10,20,914.5 $3,41,85,493.5 Terminal year after tax non operating cash flow After tax salvage value $33,49,500 Return of net working capital $48,00,000 Initial investment -$8,90,80,000 Total after tax cash flow -$8,90,80,000 $2,31,04,830.0 $2,55,03,579.5 $2,81,34,950.3 $3,10,20,914.5 $4,23,34,993.5 Discount at 13.35% $1.0 $0.882 $0.778 $0.687 $0.606 $0.534 Present value of cash flows -$8,90,80,000.0 $2,03,83,617.1 $1,98,49,889.4 $1,93,18,863.7 $1,87,91,805.1 $2,26,25,171.2 NPV = $1, 18, 89,346.5 IRR = 18% (using the excel formula) Payback period Year Amount Cumulative value 0 -$8,90,80,000.0 -$8,90,80,000.0 1 $2,31,04,830.0 -$6,59,75,170.0 2 $2,55,03,579.5 -$4,04,71,590.5 3 $2,81,34,950.3 -$1,23,36,640.2 4 $3,10,20,914.5 $1,86,84,274.4 5 $4,23,34,993.5 $6,10,19,267.8 Payback period = 3+ (-$1,23,36,640.2 / $3,10,20,914.5) = 3.4 years Working Notes1. Initial Investment Land $1,16,50,000 Building $5,95,00,000 Machinery $1,01,50,000 Furnishing fittings $29,80,000 Increase in working capital $48,00,000 $8,90,80,000 2. Terminal value Salvage value $33,49,500 Book value $33,49,500 Profit on sale $0 Terminal value $33,49,500 3. Depreciation Machinery $1,01,50,000 Salvage value 33% $33,49,500 Depreciable value $68,00,500 Depreciation $13,60,100.00 The result of the analysis is given below: Particulars Plant A Plant B NPV $25,671,833 $11,889,346.5 Non-discounted payback 3.7 years 3.4 years IRR 20% 18% Plant A has a higher NPV and IRR while plant B has a better payback period. However, we will consider Plant A and decide on choosing Plant A for manufacturing the tablet computers because for mutually exclusive projects, the project with a higher NPV should be preferred over all other capital budgeting techniques. This is NPV is considered the best technique as it takes into account the time value of money unlike IRR and non discounted payback period. Also NPV considers all the future cash flows of the project unlike payback period. NPV is the excess of cash inflows over the cash outflows. Hence, higher the NPV, higher is the profitability of the project. Therefore the company should set up Plant A which is highly automated as it has a higher NPV. There were certain assumptions which were made while doing the analysis. The discount rate considered for discounting the future cash flows is the WACC used by the Computer Tablet industry. This is because the discount factor should be such that it incorporates the risk of the project, and since this project is related to the Computer Tablet industry, hence, it is better to take WACC of industry instead of the WACC of the company. The working capital is assumed to be recovered at the end of life of the project. The head office expenses have not been considered in the analysis because it is not an incremental expense and does not arise as a result of the project. 2.Capital budgeting is based on the estimation of the various inflows and outflows related to the project. The management of the company expects the project to deliver the required benefits in order to be profitable. The various types of risks that may be associated with the Project A (recommended) are discussed below: a) Stand alone risk this risk pertains only to the project in question and does not affect the other assets of the company. The risk is associated with the estimation of the future inflows outflows and is quantified by the amount of deviation of the actual inflows and outflows to the estimated one (Burja1, Burja2, 2009) b) Company risk the project is part of the company and hence it also poses risk for the company as a whole as to how the earnings of the company will be affected as a result of undertaking the project. Also the risk of the project may be diversified by the companys other assets. c) Market risk this risk is associated with the market conditions of the economy. The future estimations are based on the overall economic growth and the inflation rate, as given in this case also, so there is a risk that the economic conditions may change and as such all the estimations may go wrong resulting in negative effects for the project. Market risk also includes the change in demand of the tablet computers. The estimations are based on the current market scenario, however if the demand changes, risk of project failure increases. d) Industry specific risk this involves the legal and technological risk of the industry. Under legal risk, there might be a change in the government policies for the industry which may affect the companys earnings. Also a technological advancement may render the tablet computers outdated which would decrease its market demand. 3.Efficient capital market is a market where the prices of a security reflect the new information accurately and that too in real time. A market is said to be efficient if the share prices can fully incorporate and induct the information which includes the basic value of the share. The value of the share is the present value of all the future cash flows associated with the share. The cash flows are in the form of dividends and the selling price of the share in the end. Such efficient markets are said to exist in the real world due to the capital markets being more and more organized and with the transaction costs being very low and information being easily available to all participants, the markets are said to be efficient. The efficient market hypothesis assumes that no analyst or trader can profits from trading as the trading will push the prices of the shares to its real value and thus the shares will be accurately priced. Three forms of efficiency in capital markets are said to e xist which are weak form efficiency in which assumes that all the past activities and information of the stock is incorporated into its price and hence technical analysis is useless in this market form. Under semi strong form, the stock prices are assumed to reflect all publicly available information accurately. However, there exists scope for making abnormal gains by accessing private information available to the insiders of the company. Under strong form, the share prices reflect all information whether public or private and neither technical nor fundamental analysis is useful in this market form. The importance of efficiency of capital markets lies in two ways. First, if the investors can make excess profits by applying trading strategies and second if the stock price reflects all information accurately, the new capital goes to the investment which has it highest valued use (Jones, Netter, NA) Capital markets are used to raise funds by government for infrastructure projects and by private firms for growth and expansion (Marwa, 2016). The primary role of a capital market is allocation of the ownership of the capital stock of the economy. Therefore a capital market allows the firms to make investment decisions and the investors can choose from the various stocks available in the market which represent the firms activities. Also the investors assume that the prices of the stock fully reflect the available information (Fama, 2010). The shareholders of a company want the companys management to maximize the stock prices and thus will ensure the company invest in high valued investments which will increase the shareholder return. Thus if the stock market is efficient, the company can emphasize on investing in long term projects as the funds are easily available and also the prices of new share at which the investors are willing to invest are determine by the market and reflects t he value of the future cash flows of the project. Moreover, a company whose stocks have appreciated finds it easier to raise funds in a capital market because higher share prices means a small ownership of the company needs to be given to raise capital. Favourable economic conditions also make it easier to raise funds. Since the tablets computer industry is a hot industry, thus it will be easier for Equator Ltd. to raise funds in the capital market and that too at the correct prices. References: Burja1, C., Burja2, V., (2009), The Risk Analysis for Investments Projects Decision, Annales Universitatis Apulens Series Oeconomica, Vol.11, No.1 Fama, E.F., (2010), Efficient Capital Markets: A review of Theory and Empirical Work, The Journal of Finance, Vol.25, N0.2 Marwa, M., (2016), Market Data Review: The Role of Capital Markets in Financing Development, accessed online on 13th Feb, 2016, available at https://www.thecitizen.co.tz/News/Business/The-role-of-capital-markets-in-financing-development/1840414-3445302-vd9vvi/index.html Jones, S.L, Netter, J.M., (NA), Efficient Capital Markets, accessed online on 13th February, 2017, available at, https://www.econlib.org/library/Enc/EfficientCapitalMarkets.html