Wealth Maximization And Payback Period - Free Sample Solution

Question: Part A Critically evaluate and analyse the differing ways in which the shareholders of a company can encourage its managers to act in a way that is consistent with the objective of maximization of shareholder wealth. Are You Daunted by the Thought of Due Assignments? Avail Our Services and Receive Assignment Help from Experts. In this section students should demonstrate knowledge, understanding, and an ability to critically evaluate the importance of agency theory, and the role it plays within financial management. The response should draw upon the differing techniques that can be used by shareholders to reduce the agency problem that is faced within many businesses. A critical evaluation of relevant academic literature should be performed, providing clear evidence of wider reading within this topical area of research, rather than simply describing the core concepts. Attempting to evaluate within the context of real-life examples where shareholders have actively attempted to address agency problems would assist in developing the depth of response offered. Part B In practice financial managers use a variety of differing investment appraisal techniques upon assessing the viability of potential capital investment projects. Critically compare and contrast two investment appraisal techniques, one of which must be a discounted cash flow technique that would assist within the financial management decision-making process. In this section students should demonstrate knowledge and understanding of two investment appraisal techniques used by financial managers, how they can inform future projects, what limits their ability to guide investment, and which technique you would prefer (with reasons). The response should demonstrate evidence of wider reading and application of the chosen techniques within a real-life business context, supported through relevant empirical research. Real-life examples can be drawn from differing countries, industries and individual businesses, clearly identifying whether the investment appraisal techniques chosen are applied in practice. The inclusion of relevant numerical examples to develop the response further would be advantageous although should not form the main thrust of the work. Answer: Introduction Shareholders are the owners of the company. They contributed a significant part of the capital by which a company can operate its business. They take all the risks associated with the company. So it is the duty of the company to provide them adequate rewards. On the other hand investors can only willing to invest in a companys share from which he can able to get a good return. The following study is based on these two objectives where it is shown how the wealth maximization goal is achieved and how the project appraisal techniques can be used to evaluate the returns of the shareholders (Shim, Siegel and Dauber 2008). Part A Wealth maximization Wealth maximization is an important term used in financial management. The term wealth means the value of the shareholders, so its does not only consider the profit earned by the company. We know shareholders are the owner of the company and they get dividends at the end of the year depending on the performance and profit of the company. The problem is that the profit which have earned today by the company have no certainty that it will be earn tomorrow also so the main concern of the shareholder is always to maximize the value of his share so that he is able to sell his share and will have a capital gain. This process is called wealth maximization. It can be better described by a simple example. Say a shareholder purchased a share of company at $ 4 in 2006 and was getting continuous dividend. In the year 2015 the value of that share rise to $18 and the shareholder sell the share at that price. So he will have a capital gain of $ 14 which arises because of his wealth maximizes from $ 4 to $ 14. Wealth maximization occurs when shareholders have confidence about the rising of the price of the shares (Welch, 2010). Agency theory As per the entity concept of accounting it is said that the company and its owner have separate legal entity (Heracleous and Lan, 2011). It was also decided in a famous case study Salamon Vs Salamon Co that the existence of Salamon Company as a sole trader and later as a partnership business is separate. So in case of company also the entity of managers and owners are separate and from this relationship between owner and manager the agency theory is evolved (Agency Theory, Information, and Incentives, 2015). This theory says that the relationship between managers and owners is like the principal and agent and as per the law an agent means a person used to affect a contract between their principal and a third party. This theory is based on the following assumptions (Forbes-Pitt, 2011) - In agency relationship persons have rational behavior and they are always willing to maximize their personal utility. This implies that the persons are only concerned about how their individual goal can be satisfied. The utility gaining by the principal for providing services, information is same as or equal to the utility achieved by the agents in receiving benefits. The company creates a link between contracts and the activities must be conducted as per of those contracts. Problems with the agency theory The agency theory has several problems which are discussed as follows- In this theory the main importance is given on the individual interest by ignoring the collective interest (Brammer, 2005). As we know that an organization should have such objectives which will help it to achieving the organizational goals. For this purpose all the parties in the organization must have proper communication and same level of interest. In practical situation it is often observed that the interest of these two parties namely management and owner are separate. Management are only concentrating in decision making activities which may increase their profit but they may be less bothered about the wealth maximization goal as they have no share in dividends (Levante, 2007). Again the problem can arise when the risk taking attitude of the parties are different. The owners might have an opinion that the company should invest in high risky project in order to get higher return but the management may reluctant to do so as they will be accountable for taking extra risk and with the addition they will not get any reward for this. On the other hand owner can prefer debt financing as it will increase their return but management may not agree with this decision as this will increase their fixed financial obligations (Dickinson and Villeval, 2008). Techniques for resolving agency problems For resolving agency problems mentioned above several techniques are suggested. One of the most important techniques among this is the effective corporate governance. Hermes, an institutional fund manager had developed 12 principles which can be applied to any company for reconcile the profit maximization and wealth maximization objectives (Jiraporn et al., 2008) ; (Yahanpath and Joseph, 2011). Transparency and Communication Principle 1 Each and every company should disclose accurate and timely information to all its parties, owners and management so that any miscommunication between these parties can be avoided. Feedback from all the concerned parties is equally acceptable. Corporate culture Principle 2 A strong internal culture should be established which will help in value creation of the members. Here the employees can be trained to get accustomed with the organization and arrangements can be made for delegating responsibilities and evaluation of the performance should be made (Chuang, 2014). Principle 3 The company should developed effective corporate strategies for each of their business units and by keeping in mind their target customers. Principle 4 The company should maximize its sustainable operating performance which is in their existing business. A proper acquisition should be incorporated before some new acquisition decisions can be taken. Principle 5 All companies should ensure that the investment plans must passed through feasibility studies and only that kind of investments are given preference which maximizes the long term wealth of the shareholders. Risk management Principle 6 When a company is taking a long project for long term benefit of the shareholders then it is obvious that the management should have assessed the risk properly. The Board of Directors must have effective risk management tools. Principle 7 The company should have a capital structure which will reduce the long term cost of capital. Debt financing is cheaper than the equity financing but involves higher obligations so it is the decision which can be taken on the basis of the financial ability of the company. If the capital structure is not as per the requirements then it should be reconsidered. Environment, Stakeholders and Social issues Principle 8 Company should build effective relationship with all the parties who have an interest on the company like suppliers, customers, government, employees etc. Principle 9 For long term sustainability of the business the company should manage the environmental and social factors which give an impact on the business. A business is the part of the large society so it is the primary responsibility of a company to do some betterment for the society. Principle 10 A company has a large number of shareholders. Though they are the owner of the company but it is not possible for all of them to participate in the management of the organization so a Board of directors is nominated by them who manage the affairs of the business but when the company is taking some decisions for restructuring of capital structure or acquisition etc teen it must allow the shareholders before taking the decisions. Principle 11 The Board of Directors should guide the company with diverse range of competencies, experience and enable the company to carry its duties, responsibilities. Sometimes there are different approaches are used, a proper explanation for that should be given by the management to its shareholders. Principle 12 The company should design its remuneration structure and remuneration policies adequately and implement those timely. Real life examples on agency problems Barclays bank plc In this company the main conflict arises between the management and the shareholders because The company declared a 2.4 billion bonus shares in spite of 34% fall in profit. The company plan to cut 12000 jobs in year 2014. Management makes an argument with the shareholders that the bonus increase is necessary. The shareholders are afraid about this bonus issue because the company had a poor financial history. Tesco plc This company has also faces some agency problem recently which affects their value of the shares (Hargreaves Lansdown, 2015). Tescos market share fall from 29.9% to 29.1% in 2014. In late 2014 Tesco admitted that they were making a misstatement of their profits by 263 million as a result of which the shareholders get disappointed. The company failed to give information to the suppliers timely and they were cancelling their deals. While the investigation is going on eight executives were suspended with pay and the cost of the company increased. The share price again falls by 44% and the shareholders wealth getting affected very badly. They closed down their 43 shops and thousands of job cut occurred. But the shareholders do not lose their hopes fully. They again began to start believing the company and it is reflected by the recent share price movements as it is again started to increase. Part B Contrast and Comparison between Payback period and Net present value Net present value and Payback period A contrast and comparison of the discounted cash flow technique and another technique of investment appraisal has been made. The discounted cash flow technique that has been used for the study is the net present value. The other cash flow technique that has been used for the study is the payback period (Bragg, 2011). The discounted cash flow technique is one of the investment appraisal techniques that evaluate the attractiveness of the investment opportunity. The future free cash flow projections are analyzed in the technique of discounted cash flow and they are discounted in order to arrive at the present value (Connor, 2006). This is done for the evaluation of the potential investment opportunity. On analysis of the projects via the discounted cash flow technique the value of the project where the DCF analysis is higher than the current cost of the investment is chosen. Net present value calculation is one of the major discounted cash flow techniques. It calculates the sum of the present value of the cash flows. The inflows and the outflows of the project are discounted at the present value. The process of calculation of the net present value is a very simple technique and it is straight forward in nature (Goel, 2015). On the other hand payback period is one of the capital budgeting techniques that refers to the time period that is required to recoup the funds that has been invested. This is necessary technique to achieve the breakeven point. However, the payback period does not take into consideration the time value of money (Heysel and Filion, 2014). Dissimilarities between the net present value technique and payback period The net present value method is a dynamic technique of investment appraisal. It is a discounted cash flow technique. The technique is calculated using the technique of time value of money. The profitability from the project will be assessed on calculation of the return from the capital that has been invested. It is achieved under the assumption of the discount rate. The investment proposals whose net present value is zero will have the same return as that of the alternative investment. The investment with net present value greater than zero than the alternative techniques of investment will achieve an increase in the capital. The investment with net present value less than zero will have worse return than the alternative techniques of investment and the investment may not be able to achieve the capital expenses. The net present value method is considered as a process for the assessment of the investment techniques. It is also used as a tool for the assessment of the investment techni que by comparing it with the alternative techniques. The capital value can be interpreted in terms of monetary units by using the net present value technique (Holland and Torregrosa, 2008). The major advantage of this method is that it uses the discounted rates. On the other hand the payback period can be considered as the static investment appraisal method. The period is determined that is required to get back the capital that has been invested. This is achieved via the repayments. The investment that has the shortest period of pack back is considered as the best investment decision and it is the most advantageous decision. The payback decision is an important technique for comparison between the various alternatives. The comparison between the various alternatives can be done using the technique of payback period. The absolute risk from the investment can be determined by using the technique of payback period (Kalyebara and Islam, 2013). There are large organizations where there is specific target that is set for the investment to get recouped. The payback period can be calculated using the average method or it can be calculated using the cumulative method. However the investment decision entirely on the basis of the payback period can lea d to results that are misleading in nature. The cash flows that are considered during the amortization period are considered in the calculation of the payback period. Thus there are various discrepancies associated with the technique of payback period. Thus it must not be considered as the sole technique for the calculation of the payback period (Kimmel, Weygandt and Kieso, 2011). Limitation of the Net present value and Payback period technique The net present value technique takes into consideration, the cash flows which are both positive and negative for conducting the project at present and in the future. The future cash flows that will be generated are discounted in order to reflect that the future inflows of cash are worth for the present day. The future cash flows are adjusted using the discount rate that takes into consideration the inflation rate. The cost of capital is taken into consideration. The present values of the cash flows that are negative and positive in nature are added to calculate the net present value. The project will be accepted when the net present value is positive while it is rejected when the net present value is negative. While making decisions between various projects, the project with high net present value is selected (McSweeney, 2006). The payback period does not taken into consideration the inflation rate and the cost of capital. The purchasing power of money declines with time. This is not considered by the payback period. On the other hand the major drawback of the net present value method is that it is based on assumptions. The estimation of the discount rate is based on assumptions. Thus the calculation may not be accurate. The analysis of the investment decision using the net present value technique is accurate than the payback period. Thus it is more feasible technique than the payback period (Naumov, 2013). Practical examples of application of net present value and payback period Net present value In the year 2012, Kotak Mahindra Bank had acquired the non performing portfolio of the Barclays bank in India. The credit card business was acquired by the organization. The decision taken by Kotak Mahindra Bank to acquire the assets of Barclays Bank was a result of analysis of the profitability from the project. In such situation, the discounted cash flow technique plays a major role. The portfolio that has been acquired by Kotak has an estimation of around Rs 300 crore and the acquisition is of 200,000 cards. The present value of the inflow over the years has been considered. The outflows that will occur as a result of this acquisition have been taken into consideration. The three possibilities that can arise as a result of the investment decision have been discussed. The three possibilities can be either zero, positive or negative. The acquisition has been possible as it has produced positive results. If the present value of the inflow of cash is less than the present value of the outflow of cash then the project would have been rejected (Park, 2013). Another example can be cited to show the application of net present value. Fine Electonics Company is considering purchasing equipment that will be attached with the main manufacturing machine of the company. The cost of the equipment will be $6000 and there will be an increase in the annual cash flow by $2200. The life of the project will be 6 years. However the machine will have no salvage value. A 20% return on the investments in expected. The net present value of the investment project has been computed. The feasibility of the investment decision has been analyzed. Item Years Amount of cash flow 20% cost of capital Present value of the cash inflow Annual inflow of cash 1-6 $2200 3.33 $7317 Initial investment $6000 ($6000) Net present value $1317 Since in this case the net present value is $1317, the project will be accepted. Payback period Payback period for different projects can be analyzed for the selection of the project which will give the highest return. For example, among two projects B and C that have identical inflow of cash, the project C is considered as the cash inflow from this project is $60,000. The project C is able to recoup the invested capital within shorter period of time than the project B. The payback period is sophisticated tool for making investment decisions in the organization. The investment opportunities can be analyzed by using this tool (Peterson Drake and Fabozzi, 2002). Conclusion The paper has analyzed the importance of the agency theory and the role played by the theory in taking major decisions of financial management. The ways in which the agency problem can be reduced significantly has been discussed. The agency problem of Tesco and Barclays Bank has been analyzed and the feasible solution to the problems has been studied. The various investment appraisal techniques have been studied. A comparison and contrast between the net present value method and the payback period technique has been studied. Among the two investment appraisal technique the net present value method is a better investment appraisal technique as it analyses the projects using time value of money. On the other hand the payback period does not consider the time value of money which is one of the major discrepancies of the technique. References Agency Theory, Information, and Incentives. (2015). . Bragg, S. (2011). The new CFO financial leadership manual. Hoboken, N.J.: Wiley. Brammer, S. (2005). Profit maximisation vs. agency: an analysis of charitable giving by UK firms.Cambridge Journal of Economics, 29(4), pp.517-534. Chuang, K. (2014).FINANCIALadvisors, financial crisis, and shareholder wealth in bank mergers.GlobalFINANCEJournal, 25(3), pp.229-245. Connor, T. (2006). Net present value: blame the workman not the tool. Strat. Change, 15(4), pp.197-204. Dickinson, D. and Villeval, M. (2008). Does monitoring decrease work effort?.Games and Economic Behavior, 63(1), pp.56-76. Forbes-Pitt, K. (2011).The assumption of agency theory. London: Routledge. Goel, S. (2015). Capital Budgeting. Business Expert Press. Hargreaves Lansdown, (2015).Tesco plc dividend payments | TSCO dividends. [online] Available at: https://www.hl.co.uk/shares/shares-search-results/t/tesco-plc-ordinary-5p/dividends [Accessed 7 Jul. 2015]. Heracleous, L. and Lan, L. (2011). Agency Theory, Institutional Sensitivity, and Inductive Reasoning: Towards a Legal Perspective.Journal of Management Studies, 49(1), pp.223-239. Heysel, C. and Filion, Y. (2014). Estimating the Payback Period of In-line Micro Turbines with Analytical Probabilistic Models. Procedia Engineering, 70, pp.815-822. Holland, J. and Torregrosa, D. (2008). Capital budgeting. [Washington, D.C.]: Congress of the U.S., Congressional Budget Office. Jiraporn, P., Miller, G., Yoon, S. and Kim, Y. (2008). Is earnings management opportunistic or beneficial? An agency theory perspective.International Review of Financial Analysis, 17(3), pp.622-634. Kalyebara, B. and Islam, S. (2013). Corporate Governance, Capital Markets, and Capital Budgeting. Dordrecht: Springer. Kimmel, P., Weygandt, J. and Kieso, D. (2011). Accounting. Hoboken, N.J.: Wiley. Levante, M. (2007). Victory or Profit Maximisation?.FINANCE Bien Commun, 26(1), p.48. McSweeney, B. (2006). Net present value: the illusion of certainty. Strat. Change, 15(1), pp.47-51. Naumov, A. (2013). ON ACCURACY OF PROJECT'S PAYBACK PERIOD ESTIMATES. Theoretical Applied Science, 5(09), pp.95-99. Park, C. (2013). Fundamentals of engineering economics. Upper Saddle River, N.J.: Pearson. Peterson Drake, P. and Fabozzi, F. (2002). Capital budgeting. New York, NY: Wiley. Shim, J., Siegel, J. and Dauber, N. (2008).Corporate controller's handbook ofFINANCIALmanagement 2008-2009. Chicago, IL: CCH. Welch, S. (2010). When Wealth Management Met 2008: Now What ?.The Journal of Wealth Management, 12(4), pp.31-45. Yahanpath, N. and Joseph, T. (2011). A brief review of the role of shareholder wealth maximisation and other factors contributing to the globalFINANCIALcrisis.Qualitative Research in FinancialMARKETS, 3(1), pp.64-77. Zhang, M., Huang, L. and Cai, Y. (2012). Forecast on Payback Period of Restaurant Projects Investment by Computer Simulation. AMR, 446-449, pp.3782-3786.

The Peculiarities of Housing Crisis in the USA

Today economists widely discuss the perspectives and the first indicators of the development of the new global financial crisis which can influence all the economical and social fields. That is why it is necessary to examine the previous experience and the economical background of the countries and focus on the causes of the crisis of 2007-2009 in order to prevent the progress of the critical situation and overcome the most dangerous effects nowadays.Advertising We will write a custom essay sample on The Peculiarities of Housing Crisis in the USA specifically for you for only $16.05 $11/page Learn More Many researchers agree that one of the main causes of the financial crisis in the USA in 2007-2009 was the housing crisis which contributed to the development of the problem and to the increase of risky tendencies. The housing crisis of 2006-2008 should be discussed as the process which includes two main stages which are the formation and the burst of â₠¬Ëœhousing bubbles’ and the following subprime mortgage crisis. To understand the peculiarities of the crisis, it is necessary to concentrate on the characteristics of ‘housing bubbles’ typical for the US economy of the 2000th which ‘burst’ caused the development of the following crisis. It is important to notice that ‘housing bubbles’ are rather speculative in their nature, and they are characterized by a range of such features as the rapid and enormous increases of the valuations of property, and it usually ends in the immediate drop of the prices which can lead to the borrowers’ crisis because they have no the opportunity to pay for their property according to the mortgages (Bhattacharya). The housing crisis in the USA was not the crisis of building companies or of the housing rent market. It was the result of bursting ‘housing bubbles’ which were based on the fictitious funds which actually were not connected with the real prices for the property and real borrowers’ incomes. Today economists accentuate a number of causes for the development of housing crisis in the USA. According to Goodman, these causes are â€Å"high default transition rates, low cure rates, and longer liquidation timelines† (Goodman 27). However, this characterization of the causes is rather limited. In his works, Stone focused on the controversial aspects which can be considered as some of the main conditions for the beginning of the crisis. He developed such influential factors as the wide income inequality in the housing industry, the facts of persistent racism in housing provision, the discussion of housing as a speculative commodity, and as a result, the overdependence of housing financing on debt capital markets (Stone).Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More â€Å"Taking these three elements togethe r, no sector of the economy has been as dependent on debt as housing† (Stone 36). Moreover, in his works on the issue of the housing crisis, Stone presents the complex analysis of the major causes of the misbalance in the economy of the housing sector in the country. The crisis developed according to several stages the main phases of which were the burst of ‘housing bubble’ and its effects. The housing boom ended in 2006 when â€Å"the share of subprime mortgages in total mortgage originations reached 20 per cent†, the prices reached the peak and then declined in the same year (Bardhan 3). 2007 could be characterized by numerous defaults and foreclosures, and in 2008 the whole financial system of the USA began to suffer from â€Å"collapsing transactions in derivatives† (Bardhan 3). In 2006 in the situation of the continuous growth of the prices for real property Americans were ready to take loans under any conditions because they were sure that they could return the money with the help of definite financial operations and even make some profits. Businessmen concentrated on the constant increase of prices without paying attention to the fact that this process cannot be endless. As a result, the amount of loans which were not supported by the real incomes of borrowers increased greatly (Prassas). Thus, in the situation of the open competitiveness banks did all possible to attract the clients and gave the loans without consulting the information about their incomes. Derivatives from mortgages were popular with the public. They were bought in order to get the definite income. The facts of the increase of these incomes persuaded the public to buy more, but this effect was not long. There were more and more derivatives, the difference between the speculative and fictitious capitals, delinquencies and foreclosures grew. It was the first step to further developing the situation with delinquencies and foreclosures because in 2008 the p rices for the real property rapidly decreased, but the sum of the necessary repayments increased. Now a great number of Americans could not pay for their loans (Bhattacharya). Analyzing the progress of crisis, Stone accentuates that â€Å"borrowing far beyond any realistic potential of repayment – built on the myth that residential property values always and forever rise – a classic bubble† (Stone 36). It is possible to discuss the consequences of housing crisis in the USA from two opposite positions. Many economists accentuate that there are no positive tendencies in the crisis’s consequences. The decline of housing prices resulted in rising foreclosures. Many organizations specialized in credits, financial entities, and investment banks became bankrupts. The negative results of the crisis were also connected with the main government-sponsored enterprises, Fannie Mae and Freddie Mac. The threat for the investment companies created the dangerous situation for the whole financial system of the country which also broke the relations with the international investors (Bardhan). â€Å"Credit markets became nonfunctional, rate spreads between risky and risk-free government debt skyrocketed, and the entire financial sector effectively became not just illiquid but insolvent† (Bardhan 3).Advertising We will write a custom essay sample on The Peculiarities of Housing Crisis in the USA specifically for you for only $16.05 $11/page Learn More Nevertheless, it is important to make the accents on the fact that the housing crisis was not spread on the private commerce because of the differences in realizing the main principles of the development and financing (Bardhan). That is why the problem of housing crisis is predominantly associated with the average Americans who bought the real property taking credits and had no money to pay for their loans after decreasing the prices on property. However, several positi ve trends in the housing market can be observed. â€Å"Prices have fallen significantly, housing is more affordable now than at any time in the past two decades, and the tax credit for first-time homebuyers has helped spur purchasing† (Goodman 26). Thus, two indicators of the crisis in the field were determined by the investors who suffered from their results significantly. They focused on the increase of â€Å"the number of loans in delinquency or foreclosure† or the â€Å"housing overhang† and the growth of a number of the borrowers â€Å"with negative equity who are likely to default† (Goodman 26). To fulfill all these conditions for the development of the crisis, it is necessary to create the critical situation depending on the growth of the housing occupancy and debt costs which is accompanied with rising property taxes, the high leverage supported by the decline of prices on the real property, the general decline of personal incomes which leads to t he inability to pay for mortgages, and as the decisive factor, the decrease of the real property values (Stone). The threat of bankruptcy made the companies which function in the field of housing market and banks make definite decisions in order to solve the consequences of the crisis. The situation results in the progress of different systems which could contribute to overcoming the crisis: In order to continue to qualify consumers for the purchase of a home, and to help drive the housing market, lenders offered more creative financing options, such as 40-year mortgages, interest-only loans, and jumbo loans, in addition to the typical business practices of offering loans based on fixed- and adjustable-rate mortgages, refinancing, and lending on the basis of home equity (Prassas 40). To overcome the problem of foreclosures and delinquencies, banks implemented a range of definite strict measures according to realizing the credit conditions for all the companies, in spite of their pay ing capacity. There are also several visions of the question of possibilities to predict the development of ‘economic bubbles’ and that is why to prevent the causes for critical situations in economy. The solution of this question can help to prevent global economic crises.Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More The lessons of the housing crisis in the USA in 2006-2009 can be considered as effective for analyzing the situation and developing the range of measures in order to be able to overcome and even predict the development of the negative tendencies in economy in the future. Works Cited Bardhan, Ashok. â€Å"Housing and the Financial Crisis in the US: Cause or Symptom?† The Journal for Decision Makers 34.3 (2009): 1-7. Print. Bhattacharya, Subhrendu. â€Å"Accelerated Trade in Housing Industry: An American Challenge in Recent Times†. Journal of International Economics 2.1 (2011): 76-84. Print. Goodman, Laurie. â€Å"Dimensioning Housing Crisis†. Financial Analysts Journal 66.3 (2010): 26-37. Print. Prassas, George. â€Å"Employment in Financial Activities: Double Billed by Housing and Financial Crises†. Monthly Labor Review 134.4 (2011): 40-44. Print. Stone, Michael E. â€Å"Housing and the Financial Crisis: Causes, Consequences, Cures†. Housing Financ e International 24.1 (2009): 34-39. Print. This essay on The Peculiarities of Housing Crisis in the USA was written and submitted by user Alma Castro to help you with your own studies. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly. You can donate your paper here.

Bugs Emotions essays

Bugs Emotions essays Recently in class, we did a study on potato bugs, and how you can tell if they have emotions. I was gone the two days that we did the lab, so I am writing you a small report about my idea about bugs and their emotions. At first, when you think about it, most people would shrug unknowingly and reply, I dont know, or some people just automatically think that they have no emotions. It is a hard question, something that you just cant figure out by thinking. It is something that you have to research, and maybe even do a test on a bug, and see what happens. I have an example that will help my conclusion to the question that was asked. My dad has a fish tank with four small frogs inside. Everyday, he puts some small crickets into the tank for the frogs to eat. Weve sat there next to the tank and watched them eat the crickets, and this is how I figured out that bugs do have emotions. Not every kind of emotion, but simply instinct, which I would consider a type of emotion. You can tell this because when the frogs would be hungry and begin to prey on the crickets, the crickets would respond by standing completely still, or running away. They sense that something is going to happen, so they do the best that they can to stop that from happening. An instinct is something that any form of life has when they are born, Its something thats there, and you might not notice it sometimes. It can be a form of an emotion because you dont really notice your emotions that are there until you need to use them, just like your instinct. You use your instinct when you know that something is wrong or you need help. Your emotions really dont show either until you need to use one of them, say when your upset, then your emotions come out. The way that the crickets acted when the frogs were coming to eat them...they were acting like they knew that something was going to happen to ...

The Origins and Proliferation of Pan-Africanism

The Origins and Proliferation of Pan-Africanism Pan-Africanism was initially an anti-slavery and anti-colonial movement amongst black people of Africa and the diaspora in the late 19th century. Its aims have evolved through the ensuing decades. Pan-Africanism has covered calls for African unity (both as a continent and as a people), nationalism, independence, political and economic cooperation, and historical and cultural awareness (especially for Afrocentric versus Eurocentric interpretations). History of Pan-Africanism Some claim that Pan-Africanism goes back to the writings of ex-slaves such as Olaudah Equiano and Ottobah Cugoano. Pan-Africanism here related to the ending of the slave trade, and the need to rebut the scientific claims of African inferiority. For Pan-Africanists, such as Edward Wilmot Blyden, part of the call for African unity was to return the diaspora to Africa, whereas others, such as Frederick Douglass, called for rights in their adopted countries. Blyden and James Africanus Beale Horton, working in Africa, are seen as the true fathers of Pan-Africanism, writing about the potential for African nationalism and self-government amidst growing European colonialism. They, in turn, inspired a new generation of Pan-Africanists at the turn of the twentieth century, including  JE Casely Hayford, and Martin Robinson Delany (who coined the phrase Africa for Africans later picked up by Marcus Garvey). African Association and Pan-African Congresses Pan-Africanism gained legitimacy with the founding of the African Association in London in 1897, and the first Pan-African conference held, again in London, in 1900. Henry Sylvester Williams, the power behind the African Association, and his colleagues were interested in uniting the whole of the African diaspora  and gaining political rights for those of African descent. Others were more concerned with the struggle against colonialism and Imperial rule in Africa and the Caribbean.  Dusà © Mohamed Ali, for example, believed that change could only come through economic development. Marcus Garvey combined the two paths, calling for political and economic gains as well as a return to Africa, either physically or through a return to an Africanized ideology. Between the World Wars, Pan-Africanism was influenced by communism and trade unionism, especially through the writings of George Padmore, Isaac Wallace-Johnson, Frantz Fanon, Aimà © Cà ©saire, Paul Robeson, CLR James, W.E.B. Du Bois, and Walter Rodney. Significantly, Pan-Africanism had expanded out beyond the continent into Europe, the Caribbean, and the Americas. W.E.B. Du Bois organized a series of Pan-African Congresses in London, Paris, and New York in the first half of the twentieth century. International awareness of Africa was also heightened by the Italian invasion of Abyssinia (Ethiopia) in 1935. Also between the two World Wars, Africas two main colonial powers, France and Britain, attracted a younger group of Pan-Africanists: Aimà © Cà ©saire, Là ©opold Sà ©dar Senghor, Cheikh Anta Diop, and Ladipo Solanke. As student activists, they gave rise to Africanist philosophies such as Nà ©gritude. International Pan-Africanism had probably reached its zenith by the end of World War II when W.E.B Du Bois held the fifth Pan-African Congress in Manchester in 1945. African Independence After World War II, Pan-Africanist interests once more returned to the African continent, with a particular focus on African unity and liberation. A number of leading Pan-Africanists, particularly George Padmore and W.E.B. Du Bois, emphasized their commitment to Africa by emigrating (in both cases to Ghana) and becoming African citizens. Across the continent, a new group of Pan-Africanists arose amongst the nationalists- Kwame Nkrumah, Sà ©kou Ahmed Tourà ©, Ahmed Ben Bella, Julius Nyerere, Jomo Kenyatta, Amilcar Cabral, and Patrice Lumumba. In 1963, the Organization of African Unity was formed to advance cooperation and solidarity between newly independent African countries and fight against colonialism. In an attempt to revamp the organization, and move away from it being seen as an alliance of African dictators, it was re-imagined in July 2002 as the African Union. Modern Pan-Africanism Pan-Africanism today is seen much more as a cultural and social philosophy than the politically driven movement of the past. People, such as Molefi Kete Asante, hold to the importance of ancient Egyptian and Nubian cultures being part of a (black) African heritage and seek a re-evaluation of Africas place, and the diaspora, in the world. Sources: Adi, Hakim and Sherwood, Marika. Pan-African History: Political figures from Africa and the Diaspora since 1787. Routledge. 2003.Ali, A. Mazrui. and Currey, James. General History of Africa: VIII Africa Since 1935. 1999.Reid, Richard J. A History of Modern Africa. Wiley-Blackwell. 2009.Rothermund, Dietmar. The Routledge Companion to Decolonization. Routledge. 2006.

Political science Essay Example | Topics and Well Written Essays - 750 words - 3

Political science - Essay Example In this essay, some major changes that have occurred in international relations since 1900 shall be reviewed. In the era of 1914s, there arose a phenomenon that came to be known as the Problem of Sovereignty and Great Power System. Sheehan (2006) explains that sovereignty concerns its self with the ideology that â€Å"political power is distinct from other organizations in the community—religious, familial, economic.† Further on, â€Å"sovereignty asserts that this public authority is preeminent and autonomous, that is, superior to institutions within the community and independent from those outside† (Sheehan, 2006). Before the 1914s, various nations of the world who were supposedly known as the world’s super-powers ventured into what came to be known as colonization. Colonization involved talking political dominion over another nation. However in the periods of 1914s, most nations who were colonized began fighting for common course of freedom to attain sovereignty and power over their own system of governance. The actors involved here were colonial masters and t heir colonized countries. Most colonial masters did not welcome the quest for sovereignty in good faith and there were reports of wars in most parts of the world. However as the demands began pressing, foreign treaties were signed to grant freedom to the pressing countries. The Problem of Sovereignty and the Great Power System was therefore a period of hostility among international relationships between colonies and colonial masters. The eventual sovereignties that were granted led to economic crises in most parts of the world as the colonial masters were no longer getting supply of free trade and payment of tax from their colonies. Economic retardation was therefore the global challenge that characterized the Problem of Sovereignty and the Great Power System. The middle of the twentieth century saw a new trend in international relation that

Solving assignment Term Paper Example | Topics and Well Written Essays - 750 words

Solving assignment - Term Paper Example (Apology, Plato) He thought that people who examined their lives were more virtuous than people who did not. Here he makes a convincing argument that if one did not know the rationale behind one’s actions one will not know whether the actions are right and justified and whether these actions can be repeated. Socrates also believed that a virtuous life meant examining the views of society on what is right. A man desirous of leading a virtuous life must examine views other than his own. According to Socrates a virtuous life meant focusing on the way things should be or could be and not on the way things are. If one had the knowledge of what is good he will not make mistakes. Lack of knowledge often makes men to consider bad things as good. One should exercise reason to understand what is good. To Socrates virtuous acts came from knowledge. He always associated virtue with wisdom Socrates views on death can be found in Apology and Crito (Plato). Socrates believed that fear of death should not act as a factor in decision making. One’s decisions must be based on examining one’s live and determining what is good and just. Our aim in life must be to place goodness and justice above everything else. If some acts are performed because of fear of death it means one is trying to preserve life and this according to Aristotle is not our primary concern. Our concern is to examine what is right and act virtuously without fearing death. Here too his argument is convincing. According to him no one knows exactly what happens after death whereas it is known that death results in a better condition for the human being as it means a complete loss of consciousness and a dreamless sleep. Hence there was no need to fear death. Many are of the opinion that where there is fear there is shame.. Here Socrates disagrees. In Euthyphro (Plato) Socrates explains that we fear many things like poverty and disease. But this does

Innovation and Invention in the Current Age Essay Example for Free

Innovation and Invention in the Current Age Essay I’m sure you all might have sensed something wrong as soon as you would have read the title of the article- Invention is the mother of necessity. Well, to go by conventions there is a proverb which goes like –Necessity is the mother of Invention. My English teacher used to elaborate this one by explaining that, it’s the necessity or paucity of something that leads to an invention. To cite a few simple examples- Telephones, mobiles etc. The telephones and mobiles were invented because it was a necessity for people to get in touch even when they are miles away. So that is how the proverb- Necessity is the mother of Invention goes. But, the technology traits today converse the proverb in entirety. In today’s mind-bogglingly advancing Technology Universe, it’s the invention of something that evolves its necessity. We need not be Marketing Experts or Trade Analysts to understand this simple yet cunning gamble of Technology vendors. I will begin justifying my topic with one the latest Tech-trends- The Tablet PCs. I’m sure you all might have seen the recurrently flashing endorsements of Tablet PCs, most popular of them being Apple’s Ipad. Let’s go in deep waters. The Tablet PC vendors in their advertisements claim that Tablet PCs are a vital necessity for professionals in the Corporate World. Corporates have lots of work, to be specific important work, and if they want to carry it with them, they can just do it via Tablet PCs. Hence, this would increase the response of the corporates towards events and thereby increasing a firm’s productivity. This is the most clichà ©d explanation a marketer for Tablet PC would provide. But, I would make a simple question here. Were Microsoft, Apple Inc, Hawlett Packard and other Big Daddies in B-World making losses when Tablet PCs weren’t invented? Or did their profit graph break the charts after the Tablets were invented? Obviously not ! Then why the Tablet PCs? Answer to this is simple- Profits. If we try to understand the marketing strategies, we would come to a conclusion that a company cannot sustain profits with a single product. You cannot keep on selling the same thing every day, because people already have it, their necessity is quenched and they wouldn’t want to buy it again. Hence, why not create something new? Once a new product is  made, the demand for it can always be created. People are always in hunt of new gadgets, not out of necessity but out of curiosity and voracity. People would always want to try something which they’ve never tried. That too, if the target audience is the Corporate World, sell them anything in the name of profit and they would buy it obliviously . As a result, now you see the corporates going GAGA over the Tablet PCs, some of them have even started equipping the creamy staff with IPADs and stuff in panic for high profits. Another example is Facebook. Facebook was created under the pseudo motive of Social Networking. I feel like laughing when I hear the term Social Networking associated with Facebook. The reason being, there is everything else happening on Facebook except Social Networking. Spying, Virtual Relationships, Corporate Deals, Advertising Marketing, Gaming, Celebrities but Social Networking is something with definitely seems absconding. It was invented to get people ( rather strangers ) closer socially. But I’ve a question to ask, did people have no friends before Facebook existed? I bet people had better friends and better relationships before Facebook. Now, the scenario is that, we would see the newspapers reporting breakups and divorce due to spying issues over Facebook. We would find people’s privacy violated and hence misused. 3 out of 7 days in a week, the news fader on Yahoo! homepage shows issues posed due to usage of Facebook A couple got divorced due to suspicious wall posts, an employee was sacked for writing ill about his boss in his status updates, celebrities digging at each other and what not. In the name of a bliss pertaining to Social Networking and Togetherness it proved a jinx! Not only this, it made the youths so fervent about it, that its mania affected their academics. Facebook now has become an indispensable part of almost everybody’s life. It was never a necessity, but its invention made it a necessity, to be more explicit-an ADDICTION. If you look around, you will find so many things which logically hold negligible prudence in our life, still we have got hooked to it, rather we have been made to hook to it. Sometimes, we are hooked to a particular thing not because we find it necessary or important, but just due to peer pressure. Ipods, Ipads, Smartphones have become a STATUS SYMBOL today and  hence many people use it involuntarily to show off their lofty stratum. Marketing Strategies have cast such a robust spell on our mind that it hardly sees the vitality of anything and just makes it a part of our life. It’s difficult to get out of this conjure but not impossible. It’s time we contemplate about the things we’re using, and about the things we’re addicted to. To conclude, â€Å"Invention is the Mother of Necessity†- is the Mantra which Vendors and Marketers follow today. We being mere mortals fall an easy prey to this hoax. Yet, if thoughtful approach is given precedence over Peer Pressure, Greed for Profit and Class Conscious Approach, it can be tackled with. As soon as people need something, they invent it. For example, when ancient people felt hunger – they went on hunting and for that they invented the bow and arrows. When they needed to carry heavy cargos to large distances the wheel was discovered. In fact, every day the humanity faces new challenges that can’t be met using only the existing technologies. And that’s why new inventions are made every day. Actually, there are people who would challenge even the seemingly obvious statement that â€Å"Necessity is the mother of invention†. They say that inventions were not inspired by the necessity alone. Curiosity was, and still is, a powerful stimulus for explorers, researchers, and inventors. Besides, I have heard more than once, sometimes as a joke, the idea that laziness is the mother of invention, as the man by nature has always been trying to make his life easier by all possible means. Laziness combined with ingenuity, inspired the man to boost his strength by means of the lever, the wheel and axle, and the pulley. For the same reason, the man discovered the sail which enabled him to move fast across the seas without putting any effort into it. But the most obvious proof of this statement is the invention of the remote control for the TV set. Only a very lazy person could have invented a way to avoid having to stand up from a sofa or a  recliner to press a button of the T V set manually. Moreover, there is another point of view that jealousy is the mother of invention. It’s known that the man has only invented the wings because people had long envied the birds their ability to fly. The envy of the fish’s ability to breathe under water has encouraged the man to invent the aqualung. So, those who say that envy gives the start to any progress are not far from the truth. But still, whichever it may be: curiosity, laziness, or jealousy – all of them are nothing but substitutes for necessity. It was necessity that forced the man, almost half-ape, to start The meaning of the proverb is self-evident. We invent what we need; unless we feel the pressure of needs, we are not likely to invent anything. The fable of the thirsty crow which collected pebbles and threw them into the jar to raise the level of water to the birds reach of lips is well-known. Mere necessity would not help us much if we are not moved by thought. Animals have their needs but because t hey lack the power of thinking and ingenuity, they cannot invent anything. They act on instinct and follow a beaten track. Hence, the correct formula should be necessity is the mother of invention but only when it is supported by the power of thinking. This, of course, is obvious. When man feels the pinching need of anything, he begins to think how he can satisfy his needs. He then sets his mind to the task of invention. Necessity gives the first impulse; the rest is the work of the intellect. In primitive times men lived by hunting. It became necessary to shoot and bring down the bird flying or the beast running beyond the reach of man. Hence, the bow and the arrow were invented. Clothes were devised as protection against cold, houses for shelter. Implements were invented for production of food. In this way, various instruments were made to secure a better standard of living. Man is not only the slave of his needs but their creator as well. He not only seeks to satisfy his necessity but also his desire for beauty, his lust for power. Culinary skill has been invented to please the palate. Ornaments were invented to add to female beauty. Man has spent millions trying to invent guided locomotives to the moon and other planets like Mars, not because there is any crying need for the same, but because it gives the thrill of doing the outwardly impossible. The mere satisfaction of needs can never be the sole motive for exercising mans faculties for inventiveness. The proverb tells us not to be passive in our attitude to life.