Wing Lee Street Project Failure Causes

Wing Lee Street Project Failure Causes In the Central and Western District on Hong Kong Island, there are quite a number of pre-World War II ancient buildings and avenues, most of them are going to be dismantled for solving the problem of urban disintegration. Sheung Wan Wing Lee Street, a tenement portion to the URA H19 and integral part of redevelopment proposal, in view of last few months, the communitys interest on Wing Lee Street. And majority of the opinion stating out that this URA project is completely failed to adopt the â€Å"people-centered† approach. Obviously, the major cause of the failure is due to the social value of Wing Lee Street. When decide whether to conserve the old building, we should take into account expert assessments of its cultural value and also its social value. Let us taking an international environmental paper Bula Charter Guidelines as an example, â€Å"Cultural Values Article 2.5 from the guidelines state that â€Å"Social value embraces the qualities for which a place has become a focus of spiritual, political, national or other cultural sentiment to a majority or minority group†. There are a lot of buildings in different places in Hong Kong of resembling time of life and style. What is extraordinary and unusual here is that the whole street has not been redeveloped recently. Many people thought that streets with old buildings like Wing Lee Street should be preserved because they were replete with Hong Kong peoples collective memories. As a result, there is a growing body of sentiment for its preservation. However, the government used to emphasize and spot development at the expense of preservation. They will not try to seek to get a proper scale between redevelopment and conservation. The URAs original plan is to solve the puzzle of urban decay and to ameliorate the living conditions of habitants in decayed urban areas. But the plan for redeveloping Wing Lee Street is not in keeping with the dogma of balancing urban evolution against conservation. The government only thought that the street cannot show monuments, nor do any of the buildings there, appearing a special design. Whats more, a film produced by Hong Kong director Echoes of a Rainbow awarded with Crystal Bear prize at Berlin International Film Festival. It was the first time that a Hong Kong movie has obtained this award. This has delivered Hong Kong citizens together once again to consider of the preservation of our collective memories and the historical buildings. This film presented the collective remembrance of people here through the description of a Hong Kong household of four during the 1960s. It is significant stating that the execution of the film was come from Wing Lee Street in the Central district. That region about the street is slated for redevelopment by the Urban Renewal Authority (URA). The director has used a lot of authentic and actual acts on that street as background of the film, as a result it does not only make it to appear more practical-minded but also give audiences some immeasurable sensation and nostalgia of these decayed and old streets. After the film getting the award and was screened, there has raised a fever in hunting and exploration of Wing Lee Street. Just like the main theme of Echoes of a Rainbow-â€Å"Time can be a thief, but time cannot steal good memories and the Hong Kong spirit†. This is the foremost message that the producer wants to show to us. So, Wing Lee Street in Sheung Wan may be just a street, but it is part of Hong Kong history and keeps us reminded and citizens including the post 1980s and post-1990s generations join their efforts to treasure and safeguard them and therefore the redevelopment plan for the street is completely failed due to the eminent social value of Wing Lee Street. Apart from the high social value of Wing Lee Street, Building Value is another factor of the failure of the proposal. Quite a number of professors and scholars finished a building research from Sai Ying Pun to Central. They have recognized a tenement buildings, being its puny body weight, stretchable layout, the construction of a simple form, should be our city building a part of cultural heritage.As the Wing Lee Street, the tenement housing in the entirety and in a extraordinary space on the street level, and its architectural significance is much higher than some singular buildings infrequent on the avenue or in a tenement building has been segregated and contrasted with the building in No. 145-153 Third Street, Sai Ying Pun, is also appreciated as distinctive value of the architecture of cultural heritage, it is of an equivalent value. So calls on the government not to dismantle but to preserve Wing Lee Street have become increasingly sturdy among conservationists for cultural he ritages. Moreover, the main purpose of this redevelopment project is due to the building safety of the buildings of Wing Lee Street. Secretary for Development Carrie Lam had said that the buildings there were beyond repair and had to be dismantled. However, after carrying out a preparatory reconnaissance on Wing Lee Street Buildings by professional engineers and surveyors, it can be established that the whole set of columns do not discover tenement difficulty to repair the building safety puzzles. The existing portions of the wall surface cracks and illegal porch and roof fabrication, can be repaired by the rehabilitation efforts, there is no insurmountable technical problems. Actually, Wing Lee Street 1-2 has been completed rehabilitation of the outcomes somewhat well. At the same time, a up-to-date main research of old buildings conducted by the Buildings Department, also shows that the environs is not the old housing in Wing Lee Street buildings fall into disrepair, imperiling the safety o f the pillar. In an article issued by the URA in March 2008 report of the scrutiny of the street and the buildings have not been come to the incapability for rehabilitation due to old age settlement. So, the view that â€Å"the buildings there were beyond repair and had to be demolished† should be discarded. Therefore, this project will redouble social controversy, leading in momentous repercussions of the public right URA violates about private property rights interests. In conclusion, the URA is required to adore the residents will be able to redevelop the Wing Lee Street, and to explore another proposals.

Capital Investment Decisions: the Case of Diamond Plc

Capital Investment Decisions: The case of Diamond PLC CONTENT PAGE PAGES 1. 1 – Introduction†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 4 1. 2 – Literature review†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. 4-6 2. 1 – Advantages and disadvantages of Net Present Value†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 6-7 2. 2 – Advantages and disadvantages of Internal Rate of Return†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. 7-8 2. – General formulas†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã ¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. 9-14 3. 1 – Critical Analysis†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 15-17 4. 1 – Conclusion†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 17-18 References†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 19-20 1. 1 – Introduction This assignment is based on Capital investment deci sions: the case of Diamond Chemicals plc. A critical analysis of this case study will examine the characteristics and concerns in the case study. This research will discuss the use of Discounted Cash Flow (DCF) techniques known as Net Present Value (NPV) and Internal Rate of Return (IRR), which are the two most popular and important techniques in investment decisions. Although these two techniques are closely-related, they have fundamental differences between each other. â€Å"The IRR is the discount rate that makes the present value of a future stream of cash flows equal to the initial investment(s). Arnold 2008. Whereas, NPV is the â€Å"difference between a project’s value and its cost† Breadley, Myers and Allen, 2006. 1. 2 – Literature Review Three research articles will be reviewed focusing on the performances of NPV and IRR relating to real cases in investment evaluation. â€Å"Do managers of South African manufacturing firms make optimal capital investment decisions? † †“ E. Gilbert, 2003. The purpose of the study was to investigate capital budgeting behaviour of firms in South Africa. It reveals that majority of manufacturing firms use only the NPV technique when evaluating their capital investment projects, and of the DCF techniques used, the NPV technique is used more often than the IRR. Research shows that manufacturing firms adjust the discount rate used in their NPV calculations to incorporate the project specific risk; according to the results of this research, majority of firms do this. It considers that the majority of firms use only the NPV technique when evaluating their capital investment projects (i. e. no other techniques are used at all). However, on average, the IRR technique is used more often than NPV (48% versus 47%). Nevertheless, in summary, the study suggests that manufacturing firms in South Africa deviate from the behaviour prescribed by corporate finance theory because they do not use NPV in isolation with projects specific risk adjusted discount rates when evaluating capital investment projects. The next article titled â€Å"Capital budgeting practices in the US. Forest product industry: A reappraisal† – L. S. Hogaboam and S. R. Shook, 2004. This study observed the capital investment practices of publicly owned forest roduct firms in the U. S. in 2001by replicating research reported by Cubbage and Redmond in 1985. In this research Baile et al (1979) conducted a survey and case study of capital budgeting in the forest products industry and found that most forest products companies had formal budgeting systems, but these companies lacked post audit procedures, did not account for risk and utiliz ed primitive risk adjustment methods. The researchers correlated the use of NPV and IRR to the size of the firm, finding that firms that had smaller gross sales revenue primarily used payback period for their projects. Nine firms ranked NPV either first or second in evaluation criteria importance, whereas IRR was considered most important evaluation criteria in the Idaho survey mutual exclusive projects. Financial literature indicates NPV is best for capital rationing, and 7/15 of firms indicated that IRR was their primary choice in case of rationing. This survey specifies that the IRR technique is most popular for the evaluation of mutually exclusive projects, even though most financial literature considers it to be inaccurate when compared to NPV. The third article â€Å"Capital Budgeting Practices: A Survey in the Firms in Cyprus† investigates: 1. the methods used by the Cyprus companies to evaluate investments, and 2. the approach adopted to handle important estimation problems inherent to the use of these methods. It was found that 54. 43% of projects evaluation is done by means of a simplified evaluation technique and that 36. 71% of the companies use the payback period technique. Among the methods that take into account the time value of money concept, the NPV method is the one most companies prefer, and only 8. 86% of them use IRR. In this study Hatfield, Horvath, and Webster (1998) investigated the importance of payback, average rate of return, IRR, and NPV capital budgeting techniques for the performance and value measures of firms. They found that firms analyzing all projects have higher share prices on average. They also found, in contrast to the theory of finance, that the NPV technique is not maximizing the value of the firm. Their results indicated that it is best not to rely on any single capital budgeting technique but instead to apply all of them or as many of them possible for a project evaluation. 2. – Advantages and Disadvantages of Net Present Value (NPV) NPV is a very popular method of project appraisal; starting with the advantages; According to Pike and Neale (2006), the NPV rule accepts all investments offering positive NPVs when discounted at the equivalent market rate of interest. This results in an increase in the market value of the firm and thus the increase of the shareholder†™s stake in the firm. NPV takes into account the time value of money – It recognises that ? 1 today is greater than ? 1 tomorrow; Breadley, Myers and Allen explain that it is because today can be invested to start earning interest immediately. They also argue that NPV rule allows thousands of shareholders who may have vastly different levels of wealth and attitudes toward risk to participate in the same enterprise and to delegate its operations to a professional manager. â€Å"One of the rules of Capital budgeting demands that managers be able to consider one project independently of all others – this is known as the value-additivity principle, it implies that the value of the firm is equal the sum of the values of each of its projects. † – Copeland, Weston and Shastri (2005). Arnold states that NPV finds out not only which project gives a positive return, but which one gives the greater positive return and that one of the major elements that leads to the theoretical dominance of NPV is that it takes into account the scale of investments. NPV is a superior technique to IRR because it has fewer limitations. Those limitations include the fact that both inflows and outflows are measured in form of present dollars, not as percentage, many people find it complicated to work with a dollar return rather than a percentage return. Another limitation would have to be the requirement of an estimate of the cost of capital to be able to calculate the NPV. William Megginson considered that financial managers find it hard to use NPV because it does not measure benefits relative to the amount invested. Though the NPV formula is constructive in evaluation of investment opportunities, the process is not faultless. 2. 2 – Advantages and Disadvantages of Internal Rate of Return (IRR) Financial managers prefer IRR because it is attributable to the general isposition of business people toward rates of return rather than actual dollars as interest rates, probability and so on are most often expressed as annual rates of return, making it an advantage of this technique. The calculations of IRR is an advantage, meaning the fact that IRR is simply the discount rate that make the NPV equals to Zero is important because it tells us how to calculate the returns on more complicated investments (Ross, Westerfield, Jordan â₠¬â€œ 2006). IRR indicates the rate of return receivable when money is put into a project. Arnold (2008) acknowledges that IRR describes how much the cash inflows exceed the cash outflows on an annualised percentage basis, taking into account of the timing of those cash flows. Like NPV, IRR also has the advantage of being a ‘time-adjusted’ measure of profitability. ‘Financial Theory and Corporate Policy’ by Ross, Westerfield and Jordan recognises that â€Å"the IRR rule errs in several ways. It does not obey the value-additivity principle, and consequently managers who use the IRR cannot consider projects independently of each other. Second, the IRR rule assumes that funds invested in projects have opportunity costs equal to the IRR for the project. This implicit reinvestment rate assumption violates the requirement that cash flow be discounted at the market-determined opportunity cost of capital. Finally, IRR rule can lead to multiple rates of return whenever the sign of cash flow changes more than once. † may give the wrong ranking of mutually exclusive projects that differ in economic life or in scale or required investment. 2. 3 – General Formulas for Net Present Value (NPV) and Internal Rate of Return (IRR) Net Present Value (NPV) formula Where CF0 = cash flow at time zero (t0), and CF1 = cash flow at the time one (t 1), one year after time zero. The decision rules for net present value are: NPV[pic]0 Accept NPV < 0 Reject Formula applied to cash flow suggested by Frank Greystock |Year |Cash flow (? m) |Discounted cash flow (? m) | |0 |-9 |-9 | |1 |1. 4 |? 1. 27 | |2 |2. 66 |? 2. 0 | |3 |3. 09 |? 2. 32 | |4 |3. 06 |? 2. 09 | |5 |3. 02 |? 1. 88 | |6 |2. 49 |? 1. 41 | |7 |2. 47 |? 1. 27 | |8 |2. 45 |? 1. 14 | |9 |2. 43 |? 1. 03 | |10 |2. 1 |? 0. 93 | |11 |1. 68 |? 0. 59 | |12 |1. 68 |? 0. 54 | |13 |1. 68 |? 0. 49 | |14 |1. 68 |? 0. 44 | |15 |1. 68 |? 0. 40 | | | |Total (NPV) ? 9. 00 | Internal Rate of Return (IRR) formula The internal rate of return, r, is the discount rate at which the net present value is zero. It is the value for r which makes the following equation hold: Formula applied to cash flow suggested by Frank Greystock The following tables show the percentages utilized for the trial and error phase, in order to produce an NPV of zero. |Table 1 | | | | | | | |Yearly |Cash Flows (? ) |Discounted Cash Flow (? m) | | |Intervals | | | | | | | | | |0 |-9. 00 |-9. 00000 | | |1 |1. 40 |1. 11111 | | |2 |2. 66 |1. 67549 | | |3 |3. 9 |1. 54471 | | |4 |3. 06 |1. 21406 | | |5 |3. 02 |0. 95094 | | |6 |2. 49 |0. 62227 | | |7 |2. 47 |0. 48990 | | |8 |2. 45 |0. 8566 | | |9 |2. 43 |0. 30358 | | |10 |2. 41 |0. 23895 | | |11 |1. 68 |0. 13220 | | |12 |1. 68 |0. 10492 | | |13 |1. 68 |0. 08327 | | |14 |1. 8 |0. 06609 | | |15 |1. 68 |0. 05245 | | |26% |Net Present Value (? m) |-0. 02441 | | | | | | Table 2 | | | | | | |Yearly |Cash Flows (? m) |Discounted Cash Flow (? ) | | |Intervals | | | | | | | | | |0 |-9. 0 0 |-9. 00000 | | |1 |1. 40 |1. 12000 | | |2 |2. 66 |1. 70240 | | |3 |3. 09 |1. 8208 | | |4 |3. 06 |1. 25338 | | |5 |3. 02 |0. 98959 | | |6 |2. 49 |0. 65274 | | |7 |2. 47 |0. 51800 | | |8 |2. 45 |0. 41104 | | |9 |2. 43 |0. 2615 | | |10 |2. 41 |0. 25877 | | |11 |1. 68 |0. 14431 | | |12 |1. 68 |0. 11545 | | |13 |1. 68 |0. 09236 | | |14 |1. 68 |0. 07389 | | |15 |1. 68 |0. 5911 | | |25% |Net Present Value (? m) |0. 29926 | | | | | | Table 3 | |Yearly |Cash Flows (? m) |Discounted Cash Flow (? m) | | |Intervals | | | | | | | | | |0 |-9. 00 |-9. 0000 | | |1 |1. 40 |1. 07692 | | |2 |2. 66 |1. 57396 | | |3 |3. 09 |1. 40646 | | |4 |3. 06 |1. 07139 | | |5 |3. 02 |0. 81337 | | |6 |2. 49 |0. 1587 | | |7 |2. 47 |0. 39363 | | |8 |2. 45 |0. 30034 | | |9 |2. 43 |0. 22915 | | |10 |2. 41 |0. 17482 | | |11 |1. 68 |0. 09374 | | |12 |1. 68 |0. 7211 | | |13 |1. 68 |0. 05547 | | |14 |1. 68 |0. 04267 | | |15 |1. 68 |0. 03282 | | |30% |Net Present Value (? m) |-1. 14726 | | | | | | | |Yearly |Cash Flows (? ) |Discounted Cash Flow (? m) | | |Intervals | | | | | | | | | |0 |-9. 00 |-9. 00000 | | |1 |1. 40 |1. 09375 | | |2 |2. 66 |1. 62354 | | |3 |3. 9 |1. 47343 | | |4 |3. 06 |1. 13994 | | |5 |3. 02 |0. 87894 | | |6 |2. 49 |0. 56616 | | |7 |2. 47 |0. 43876 | | |8 |2. 45 |0. 34001 | | |9 |2. 43 |0. 6346 | | |10 |2. 41 |0. 20413 | | |11 |1. 68 |0. 11117 | | |12 |1. 68 |0. 08685 | | |13 |1. 68 |0. 06785 | | |14 |1. 68 |0. 05301 | | |15 |1. 68 |0. 4142 | | |28% |Net Present Value (? m) |-0. 61758 | | | | | | Interpolation illustrates that there is a yield rate (r) which lie between 25 per cent and 26 per cent which will produce an NPV of zero. The way to find that discount rate is to first find the distance between points A and B as a proportion of the entire distance between points A and C. 3. 1 – Critical Analysis â€Å"Greystock included in the first year of his forecast preliminary engineering costs of ? 00,000, which had been spent over the preceding nine months on efficiency and design studies of the renovation. † The preliminary costs of ? 500,000 were irrelevant because it would not have been incurred if not for the possibility of Greystock going ahead with the renovation; therefore it was a sunk cost. The development cost of ? 500,000 should be ignore because they are bygones and are of the past as it was incurred nine months before and does not need to be added into the cash flow. â€Å"The corporate manual stipulated that overhead costs be reflected in project analyses at the rate of 3. % times the book value of assets acquired in the project per year†. According to Arnold (2008), not all overhead costs are incremental; when trying to assess the viability of a project only the incremental costs are incurred by going ahead are relevant. Those cost which are unaffected therefore irrelevant. Meaning that the capital projects which should reflect an annual pre-tax charge amounting to 3. 5% of the value of the initial asset investment for the project – it should be entered in the incremental cash flow because it is an irrelevant overhead cost. Rotterdam sales are producing negative results due to the decision made by Greystock to shift capacity to Rotterdam away from Merseyside. His new business decision is having a negative effect on Rotterdam because all the expenditure is coming from Merseyside as he has decided to renovate it, cannibalizing Rotterdam. Even the director of sales recognised there was â€Å"oversupply in the works†, which means that too much is being supplied for the project. In view of adjustment of cash flow must be consistent with inflation forecast imbedded in discount rate. The treasury staff was concerned because the project would impound a long-term inflation of 3% per year. The unrelated EPC project is not relevant as it would only increase prices when recession ended despite the ? 1 million pound renovation ; the criterion is that each individual investment promises an IRR greater than 10%, not that multiple projects promise an average return above this hurdle. Before submitting a project for senior management, at least three performance â€Å"hurdles† had to be met in order for proposal to be considered. -Impact on earnings per share = ? 0. 018 -Payback = 3. years -Discounted cash flow (NPV) = ? 9 Million Although the Merseyside project met all the criteria, Morris should have considered dividing the proposal into requires and desire expenditure ( relating to April Novelties). Concerns and characteristics – Merseyside The main concern for Merseyside is the old production process and how it is not continuous at times, and it has a â₠¬Å"higher labour content than its competitors’ newer plants. However, regardless of these limitations the Merseyside plant has many good characteristics such as: †¢ Receiving positive cash flows immediately Higher cash flows in the beginning †¢ Relatively short payback period Concerns and characteristics – Rotterdam The lack of flexibility and commitment to plant project are concerns for the Rotterdam plant as it is not being renovated and we remain unsure as to whether Greystock will take on the project of renovation at Rotterdam. On the other hand, the fact that the polymerization process has become continuous is major strength, and also that the payment schedule is flexible (over four year period). In addition the Japanese technology has proven to be successful in Japan. . 1 – Conclusion This assignment has summarized the Case study while emphasizing important details of the concerns and characteristics of the Merseyside and Rotterdam plant. Opportu nities such as Land value and Use of right of way can enable Rotterdam to develop positively, despite German technology posing as a threat and also losing right of way. Overall the Merseyside plant offers numerous opportunities to increase outputs and lower costs, while also increasing competitiveness for their competitors. Nevertheless Merseyside faces a very big threat where they would have to close for 45 days causing their customers to buy from their competitors, although the lost market share can still be regained. The investment appraisal process requires the use of sophisticated evaluation techniques such as Net present value (NPV) and Internal rate of return (IRR). These techniques help ensure that all relevant cost and other factors have been considered. The calculations of NPV and IRR are quite challenging, especially regarding the trial and error method IRR. The calculations to obtain –NPV=0- was time consuming and more than twice as long as the NPV method. If risk adjustment is made through the discount rate there may be more than one cost of capital and the sponsor then has to classify the project into say high or medium or low risk categories etc. Finally, it can be argued that the process of capital budgeting is a time-waster because the fundamental information used is seen to be undependable. As the estimates of cash proceeds are just guesses and that the use of anything other than the easiest technique of capital budgeting is as unsuccessful as making use of any complicated formulas. For example, in 1974 K. Larry Hastie published his classic paper, â€Å"One Businessman’s View of Capital Budgeting. † His position is that firms should avoid excessively complex measurement techniques. He states: â€Å"Investment  decision making  could be improved significantly if the emphasis were placed on asking the appropriate strategic questions and providing better assumptions rather than on increasing the sophistication of measurement techniques† (1974, p. 36). This research establishes that NPV and IRR are two major investment decision methods, which gratifies the criteria for the accurate evaluation of capital projects. REFERENCES Hogaboam, L. S. , Shook, S. R. (December 2004) ‘Capital Budgeting practices in the U. S. forest product industry: A reappraisal. ’ Forest products journals. Gilbert E. (May 2003) ‘Do managers of South African manufacturing firms make optimal capital investment decisions? ’ Graduate School of Business, University of Cape Town. Lazaridis T. L. October 2004) ‘Capital Budgeting Practices: A Survey in the Firms in Cyprus’ Journal of Small Business Management Richard A, Breadley, Stuart C. Myers, Franklin Allen (2008) ‘Principles of Corporate finance’ 9th edition McGraw-Hill, London Richard Pike, Bill Neale (2005) ‘Corporate finance and investment: decisions of strategies’ 5th edition Financial time prentice hall Thomas E. Copeland, J. Fred Weston, Kulde ep Shastri (2005) ‘Fiancial theory and Corporate policy’ 4th edition Pearson Addison Wesley, London Megginson, William L. (1997) ‘Corporate finance theory’ Addison Wesley Stephen A. Ross, Randolph W. Westerfield, Bradford D. Jordan (2006) ‘Coporate finance: Fundamentals’ McGraw-Hill, London Glen Arnold (2008) ‘Corporate financial management’ 4th edition Financial times prentice hall, England Investopedia (2010) Available at: www. investopedia. com/study-guide/cfa-exam/level-1/corporate-finance/cfa13. asp Fao corporate document repository (1997) ‘Chapter 6: Investment decision – Capital budgeting’ Available at: www. fao. org/docrep/w4343e/w4343e07. htm QFinance (2007) Available at: www. qfinance. com/cash-flow-management-best-practice

Life in the Colonial Cities Essay

The people of early colonial America settled mainly in rural areas and farms. Eventually, by the end of the 18th century, cities became dominant settlements over the rural regions. The cities of colonial America were heavily influences by British; the latest fashions of dress, social ideas, and furniture among other things were imported from Great Britain. As the size of cities grew, problems in health and sanitation began to arise. Throughout all of the major cities, taverns were the common places where everyone would meet. The cities of colonial America helped spread the European Enlightenment across the Atlantic. This in turn helped create an American Enlightenment movement, which started primarily in the major cities. Cities helped develop the advancement of learning in science, literature, and the arts. They were also centers for manufacturing and commerce, where industry boomed. The major cities of America included Boston, Philadelphia, New York, Newport, and Charleston. In these large cities, many problems began to surface. These difficulties involved health, sanitation, police protection, and fire prevention. To decrease these problems meant that the city would have to work together and stop with individualistic ways. Philadelphia was the most heavily populated, and most sophisticated of the major cities. They had brick roads and sidewalks including street lamps, which turned on every night. There was a regular night watch along with volunteers for fire protection and there were also many booksellers. Some people were unhappy with Philadelphia’s design while others thought the city to be a masterpiece. Boston was another populous city, thanks to its elegance and in general the manners of its people. The people of Boston had many luxuries, such as coach rides where slaves served the customers. Also, the Mall was a very popular place among the people. The Mall was a beautiful Common with trees and paths, which was an imitation of St James’s Park. Although Boston was not as  densely populated as Philadelphia, Boston offered a cleaner and more open society. New York City preserved many of its native Dutch traditions and qualities. A lot of the buildings were built of brick, which was the common Dutch style. New York also had developed into the headquarters of the British North American Army. Many New Yorkers were influenced greatly by Britain, which meant that the people were considered to have excellent manners. Taverns were the centers of social life in the cities, also called the â€Å"principal social institution of colonial America.† The taverns social class ranged greatly depending on its surrounding areas. Some taverns housed the low life’s and poor people while others only accepted gentleman. Most of the pubs were a place for common people to discuss any matters at hand. Some say the foundation of the Revolutionary War was planned in taverns. Some people felt as if taverns were causing some problems in society. Benjamin Franklin was one of the major figures that tried to limit the number of taverns in cities. He argued that the number of taverns might cause poverty to many of the people and the surrounding neighborhood. However, taverns could be considered good to the cities because they were the closest form of business enterprise in colonial America to this point. Although in the early years of colonial America, many people resided in the rural areas, the cities became more populated over time. Taverns were a main reason for people moving from farms to the cities. The conditions of the city weren’t excellent, as the water supply was not very sanitary and garbage disposal was a major issue. However, these factors made for the beginning of a new nation and helped form how America is today.

Critical Analysis of “I Wandered Lonely as a Cloud” and...

Critical Analysis of â€Å"I Wandered Lonely as a Cloud† and â€Å"The Facebook Sonnet† Light and happy or dark and lonely, both â€Å"I Wandered Lonely as a Cloud† and â€Å"The Facebook Sonnet† are similar in that both of their themes describe solitude. Still, William Wordsworth and Sherman Alexie use opposite ideas to take this concept in different lights. While Wordsworth describes an enjoyable evening walking through a meadow and speaks of his contentment thinking of this day when he is alone, Alexie describes forlorn wishful nature of an average Joe reminiscing on his past through social media. In this essay, I will compare and contrast the meaning of both works using the poets’ images and symbols, and will compare how each poet used the notion of†¦show more content†¦After reading this poem, I am left with the imagery of a lonely thirty-something sitting in a dark room on her laptop, jealously â€Å"creeping† on her well-to-do and recently engaged sorority sisters. Many people use Facebook to stay connected with people of thei r past or to impress people they once knew, but when it comes down to it, this connection is a forsaken commodity, or so Alexie argues. Alexie used words like â€Å"endless† â€Å"shame† and â€Å"loneliness† to help create this desolated image. It also came to my attention that both poems use the suggestion of both â€Å"humans and† and â€Å"humans versus†. In â€Å"I Wandered†, Whitworth describes the relationship between man and nature, furthermore describing it as a beautiful thing that brings one joy. I noticed throughout the piece he alters the reality of his work, objectifying himself as a cloud that is wandering alone and also personifying nature in that the daffodils dance and toss their heads in the wind. This furthers the idea in that they are so similar; they can essentially â€Å"be each other†. Whitworth clearly thinks the appreciation of nature is helpful to the wellbeing of humanity. Whereas â€Å"The Facebook Sonne t† deals with a more controversial topic of â€Å"man versus machine† machine being the domain Facebook. Although this is not said directly, it is implied that Alexie is displeased with what Facebook has become, and with reason. He states, â€Å"Let’s sign up, sign in,