After Tax Leases Versus Purchase Analysis Finance Essay - Free Essay Example

Sample details Pages: 2 Words: 650 Downloads: 10 Date added: 2017/06/26 Category Finance Essay Type Narrative essay Did you like this example? When the firm decided to acquire a particular building or equipment, the next question arises how to finance it. Some businesses do not have excess cash, so capital to finance new assets must be obtained from other sources. Funds to purchase asset could be obtained from internally generated cash, by borrowing or by selling new equity. Don’t waste time! Our writers will create an original "After Tax Leases Versus Purchase Analysis Finance Essay" essay for you Create order Alternatively the asset could be leased. Business owners and managers are often concerned with the question whether to lease or purchase an asset. (Eugene F. et al. (2008). A lease is a comparable to a loan in a sense that the firm is required to make and failure to meet these payments will result in bankruptcy. (Eugene F et al. p.722). Since most expenses such as lease payments occur in the future a good way to evaluate the lease and purchase options is compare net costs of both alternatives in terms of present values. This report will be based on three real estate options that a firm is considering to conduct its business.ÂÂ   There will be provided the calculation of the PV of cash flows and NPV calculation of the three real estate options. The first option is that the firm can purchase the property with its own cash at a cost of $11.4 million, and save the annual rental costs. In the second option the firm can purchase the facility with part financing.ÂÂ  The t hird option is lease with renting the property at the annual amounts.ÂÂ   Discount rate that will be used is 10 per cent cost of capital.ÂÂ  After all calculations and analysis there will be conclusion describing what the most effective option is. End of Year Purchase without Financing (1) Purchase with Financing (2) Lease (3) 1 ($11,400,000) ($3,579,000) 0 2 70,949 (503,617) (660,000) 3 80,300 (505,025) (660,000) 4 80,300 (510,180) (660,000) 5 80,300 (515,763) (660,000) 6 80,300 (521,809) (660,000) 7 80,300 (528,357) (726,000) 8 80,300 (535,449) (726,000) 9 80,300 (543,129) (726,000) 10 80,300 (551,446) (726,000) Residual Value 11,870,074 5,727,858 Main Calculations 2.1 Calculation of the PV of the cash flows for each of the three options In evaluation Purchase or Lease Decisions, NPV technique will be very helpful. This approach is similar to the capital-budgeting problem. However there is a major difference exists between capital budgeting and lease problems. In capital budgeting, the project with higher NPV is preferred one, whereas in lease versus purchase, the option with lower present value of expenditure should be selected. (Angelico A. Et.al 2006) PV (Purchase without financing) = 70,949/ (1+0, 10)+ 80,300/(1+0,10) + 80,300/(1+0,10)+ 80,300/(1+0,10)+80,300/(1+0,10)+ 80,300/(1+0,10) +80,300/(1+0,10) + 80,300/(1+0,10)+ (80300+11,870,074)/ (1+0, 10) = 64, 499 + 66,364 + 60,331 + 54,846 + 49,860 + 45,327 + 41,207 + 37,461+ 5,068 125 = 5, 488, 018.82 PV (Purchase with financing) = 503,617/ (1+0, 10)+505,025/(1+0,10) + 510,180/ (1+0,10) +515,763 / (1+0,10) +521,809 / (1+0,10) + 528,357/ (1+0,10) + 535, 449 / (1+0, 10) + 543,129 / (1+0, 10) + (551,446+ 5,727, 858) / (1+0, 10)= (457ÂÂ  834) + (417ÂÂ  376) + (383ÂÂ  306) + (352ÂÂ  273) + (324ÂÂ  002) + (298ÂÂ  244) + (274ÂÂ  770) + (253ÂÂ  374) + 2 195 304 = (565, 874.30) PV (Lease) = 660,000/ (1+0, 10)+ 660,000/(1+0,10) + 660,000/(1+0,10) + 660,000/ (1+0, 10) +660,000/ (1+0, 10) +726,000/ (1+0, 10) + 726,000/ (1+0, 10) 726,000/ (1+0, 10) +726,000/ (1+0, 10) = (3 930 859) 2.2 Calculation of the NPV for each option The difference between the present value of expected returns and the initial investment required to generate these returns is Net Present Value (NPV). The formula of NPV: Where r is the required rate of return. (Van Horne J., Machowicz J. 2001, p 323) NPV (Purchase without financing) = 5, 488, 018.82+11,400,000= ($5 911 981, 18) NPV (Purchase with financing) = (565, 874.30) + 3,579, 000 = ($4 144 874, 30) NPV (Lease) = (3 930ÂÂ  859) Conclusion In making the final decision whether to lease or to purchase, managers pick up the less expensive alternative, as the aim to select the financing method that produces the lowest present value cost. In present assignment, this is the option number three, which is leasing, as it generates minimal negative cash outflow (3 930ÂÂ  859) comparing with two other alternatives: purchase without financing ($5 911 981, 18) and purchase with financing (4 144 874, 30). A growing tendency to favour leasing supports the fact, that it carries specific advantages. The first advantage is that it helps to conserve working capital. This is because leasing does not require a lump sum outflow of funds in the form of the purchase price of the asset. Cash is thus retained in the business, and can be used for other important purposes. The second advantage is that lease financing is highly flexible and convenient. The third is that leasing allows firm to avoid risk of obsolescence and finally the le ase does not carry restrictive covenants that are found in the case of term loans. (Van Horne J., Machowicz J.(2001) References: Books: Angelico A. Groppelli, Ehsan Nikbakht (2006) Finance, 5th Edition, Barrons Educational Series P.347 Van Horne J., Machowicz J.(2001), Fundamentals of Financial Management, Prentice Hall, 12th edition, Pp 293-330 Eugene F. Brigham, Michael C. Ehrhardt (2008), Financial management: theory and practice,12th Edition, Thomson South-Western, p.722

Media s Influence On Nursing Profession Essay - 2514 Words

Media is very popular these days and people can access them instantly anytime, anywhere in the world. The image of nursing is certainly influenced by media such as advertisement, newspapers, movies, TV and radio. The Media’s unfounded believes damages the image of the nursing profession and influences how those outside of the medical field view nursing as a profession. Media influences people to make them believe that nurses are just like other caring people, but they actually do not know that nurses are actively involved in the health care reform. â€Å"Media’s tendency to frame the same issue in different ways at different times† (Alan Miller, Tyler, Rozanova and Mor. 2012, p.748). Often time media have been presenting the nursing profession poorly about nurses with unprofessional behavior, inappropriate dress or appearance and they are manipulating the story not reflecting the skills, true value and care that goes along with the nursing profession. Media can spread the message across the globe quickly and if the message is contrary to the profession it could mislead people. â€Å"The tone of media coverage has been primarily negative, rarely positive ’’ (Alan Miller, Tyler, Rozanova and Mor. 2012, p.745). The media portrays nurses as the helpers of doctor’s, on the contrary, the true role of nursing is the one that provides support, comfort, and health care service. The impact of media negligence could reduce the respect and value of nurses in the public. The role of nursing hasShow MoreRelatedMedia s Negative Images Of Health Care1215 Words   |  5 Pages Should Media Portray Only Positive Images of Health Care Name Institution Should Media Portray Only Positive Images of Health Care Media has portrayed many negative images of healthcare through television including movies. It is important that media presents positive images of healthcare to influence positive public perceptions on healthcare delivery. 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Abercrombie Fitch an Upscale Sporting Goods Retailer Becomes a Leader in Trendy Apparel Essay Example For Students

Abercrombie Fitch: an Upscale Sporting Goods Retailer Becomes a Leader in Trendy Apparel Essay Abercrombie Fitch: An Upscale Sporting Goods Retailer Becomes a Leader in Trendy Apparel Kevin Feldpausch Strayer University Bus 499 Professor Toiya Evans July 22, 2010 ? 1. Identify and describe the greatest environmental threats that have immediate implications for A F. Abercrombie and Fitch has been a leader in the retail fashion business for many years and have marketed their clothing line to appeal to a younger group of people mostly in high school and college. They were charged with a lawsuit claiming that their workers and models were predominately tall, skinny, good-looking white people. This could be seen as a threat because they were not hiring anyone of another race. I feel like this could hurt theirs sales and ultimately give them the reputation of a being a racist company. 2. Identify and describe the greatest opportunities available in the marketplace for AF to pursue. Abercrombie and Fitch was hit hard during the recession and refused to offer lower prices and discounts like their competitors did. Recently they have introduced a new catalog, still a bit racy as their catalogs were before, but AF feels that the exposure will be good for the company. AF has also improved its clothing assortment to offer more selection and lowered prices and cut costs. This could be the chance that they need to establish themselves as a lower priced retailer to regain some of their customers who may shop elsewhere for a better bargain, such as American Eagle and Aeropostale. 3. Identify and describe AF’s greatest organizational strengths. Abercrombie Fitch’s greatest organizational strength is their clothing line. They are well-known all over the world and appeal to young buyers. They have branded themselves as a leader in the fashion industry and buyers tend to perceive Abercrombie clothing as top of the line in fashion. Abercrombie hires young, good-looking people for their stores and has them wearing their clothes while working. When customers enter the store they see the clothes on the associates and this is a good way to display their newest clothing line. They have a very effective marketing strategy by displaying their clothes on the associates and also with the catalogs that definitely create attention. 4. Identify and describe the company’s greatest weaknesses. The company’ greatest weakness is the high cost of their clothing and their limited customer base. AF’s clothing is higher priced than many of its competing stores. It is perceived as being overpriced. Most of AF’s stores are located in malls and are in close competition with rivals such as American Eagle or Aeropostale, which both offer similar clothing at a lower price. Their customer base is focused on high school and college aged consumers who are thin and good-looking. These are the people they market to and this narrows down the number of consumers for their clothes. 5. Describe how AF’s strengths can be used to deflect environmental threats to further the company’s success in the industry. Abercrombie Fitch has a solid financial and market position in the industry and this could help them push ahead of the competition. Although they have had some negative publicity in the past, with lawsuits of being a racist company, poor choices of slogans on their t-shirts, and sexual ads and catalogs, they seem to overcome this and continue to grow. It seems the bad publicity has not stopped consumers from buying their clothes because they have branded themselves in the industry as being a leader in the latest fashion. 6. Describe how AF’ strengths can be used to take advantage of opportunities to further the company’s success in the industry. .ud94f1e89eb6f1f65fb469f63cf46d4ec , .ud94f1e89eb6f1f65fb469f63cf46d4ec .postImageUrl , .ud94f1e89eb6f1f65fb469f63cf46d4ec .centered-text-area { min-height: 80px; position: relative; } .ud94f1e89eb6f1f65fb469f63cf46d4ec , .ud94f1e89eb6f1f65fb469f63cf46d4ec:hover , .ud94f1e89eb6f1f65fb469f63cf46d4ec:visited , .ud94f1e89eb6f1f65fb469f63cf46d4ec:active { border:0!important; } .ud94f1e89eb6f1f65fb469f63cf46d4ec .clearfix:after { content: ""; display: table; clear: both; } .ud94f1e89eb6f1f65fb469f63cf46d4ec { display: block; transition: background-color 250ms; webkit-transition: background-color 250ms; width: 100%; opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; background-color: #95A5A6; } .ud94f1e89eb6f1f65fb469f63cf46d4ec:active , .ud94f1e89eb6f1f65fb469f63cf46d4ec:hover { opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; background-color: #2C3E50; } .ud94f1e89eb6f1f65fb469f63cf46d4ec .centered-text-area { width: 100%; position: relative ; } .ud94f1e89eb6f1f65fb469f63cf46d4ec .ctaText { border-bottom: 0 solid #fff; color: #2980B9; font-size: 16px; font-weight: bold; margin: 0; padding: 0; text-decoration: underline; } .ud94f1e89eb6f1f65fb469f63cf46d4ec .postTitle { color: #FFFFFF; font-size: 16px; font-weight: 600; margin: 0; padding: 0; width: 100%; } .ud94f1e89eb6f1f65fb469f63cf46d4ec .ctaButton { background-color: #7F8C8D!important; color: #2980B9; border: none; border-radius: 3px; box-shadow: none; font-size: 14px; font-weight: bold; line-height: 26px; moz-border-radius: 3px; text-align: center; text-decoration: none; text-shadow: none; width: 80px; min-height: 80px; background: url(https://artscolumbia.org/wp-content/plugins/intelly-related-posts/assets/images/simple-arrow.png)no-repeat; position: absolute; right: 0; top: 0; } .ud94f1e89eb6f1f65fb469f63cf46d4ec:hover .ctaButton { background-color: #34495E!important; } .ud94f1e89eb6f1f65fb469f63cf46d4ec .centered-text { display: table; height: 80px; padding-left : 18px; top: 0; } .ud94f1e89eb6f1f65fb469f63cf46d4ec .ud94f1e89eb6f1f65fb469f63cf46d4ec-content { display: table-cell; margin: 0; padding: 0; padding-right: 108px; position: relative; vertical-align: middle; width: 100%; } .ud94f1e89eb6f1f65fb469f63cf46d4ec:after { content: ""; display: block; clear: both; } READ: Hamlet: Contrast Plays A Major Role EssayThe strength of having a good reputation for quality clothing is going to set Abercrombie apart from others in the fashion retail industry. Their marketing strategy in the past has went under heavy criticism for being to sexual, especially since they are trying to appeal to a younger group of people. But this has only made the Abercrombie Fitch label more desirable. The way they market to their consumers seems to work very well and they are continuing to do so. Considering the style and quality of clothing AF offers, their customers are willing to pay the higher price because they feel like they have to wear the brand and have the â€Å"look† of Abercrombie. This is the reason that Abercrombie Fitch will remain the leader in industry and continue to grow. ? References www. zimbio. com/Abercrombie+and+Fitch+Clothing/articles/LLQljU8UVsp/abercrombie +polos+Abercrombie+Clothing+070ces www. cbsnews. com www. usatoday. com www. wikiswot. com/SWOT/7_Apparel/Abercrombie___Fitch. html

Child abuse

Child abuse- A Child Called It Essay In American society today we fail to address several issues that need to be addressed. Unfortunately, child abuse is one of the major issues that our country is plagued with, yet we neglect to bring this to the attention of the entire nation. It is often over looked because everyone has a different view of what exactly defines child abuse. The International Child Abuse Network (ICAN) uses four basis catigories to docunment the child abuse cases. They are: emotional abuse, neglect, physical abuse, and sexual abuse. I will be describing the first three. Emotional Abuse, (also known as: Verbal abuse, mental abuse, and psychological cruelty) includes acts or the failures to act by parents or caretakers that have caused or could cause serious behavioral, cognitive, emotional or mental disorders. This can include parents and/or caretakers using extreme or bizarre forms of punishment, such as the child being confined in a closet or dark room, being tied to a chair for long periods of time, or threatening or terrorizing a young mind. Less severe acts, but no less damaging is overly negative criticism or rejecting treatment, using degrading terms to describe the child, constant victimizing or blaming the child for situations. Neglect (the failure to provide for the childs basic needs) can be physical, educational, or emotional. Physical neglect can include not providing adequate food, clothing, appropriate medical care, supervision, or proper weather protection (heating or coats) to the child. Educational neglect can include failure to provide appropriate schooling or special educational needs, allowing excessive truancies, to the child. Psychological neglect is the lack of any emotional support and love, never attending to the child, spousal abuse, or drug and alcohol abuse including allowing the child to participate in drug and alcohol use. Physical abuse is to cause or inflict physical injury upon the child. This may include, burning, hitting, punching, shaking, kicking, beating, or otherwise harming a child. The parent or caretaker may claim not to have intended to hurt the child, that the injury was an accident. It may have however, been the result of over-disciplines or physical punishment that is inappropriate to the childs age. In 1998 NCANDS (National Child Abuse and Neglect Data System) calculated the Fatalities by Maltreatment, Child Abuse and Neglect. There were 421 physical abuse fatalities, 375 neglect and medical neglect fatalities, 31 both physical and neglect fatalities, and 10 fatalities caused by; failure to use safety restraints in motor vehicles, lack of supervision resulting in accidental drowning, death in house fire, and getting hit by motor vehicle. There were also 12 deaths that could not be classified. This is a grand total of 849 deaths caused by child abuse and neglect in 1998. The rate of child abuse and neglect fatalities reported by NCANDS has been rising over the last several years from 1.84 per 100,000 children in 2000 to 1. 96 in 2001 and 1.98 in 2002. The 2001 report also showed that children ranging from age 0-1 year were accounted for 40.9 percent of all fatalities. 84.5 percent of maltreatment-related fatality cases were age six and under. 35.6 percent of child fatalities resulted from neglect alone, 26.3 percent from physical abuse alone, and 21.9 percent from both neglect and physical abuse. 82.8 percent of these child fatalities were the result of maltreatment by one or both parents. Mothers acting alone accounted 32.4 percent of child abuse and neglect related fatalities. The children ranging from zero to age three are the most frequent victims of child fatalities. Along with the 2001 NCANDS data, in 2002 children younger than 1 year accounted for 41 percent of fatalities, while children younger than 4 years accounted for 76 percent of fatalities. This population of children is the most vulnerable for many reasons, including their dependency, small size, and inability to defend them selves. However, in these evaluations of data, experts do not agree whether this is an actual increase in child abuse and neglect fatalities, or whether it may be due to improvements in reporting deaths and suspicions. .uf779966cc0515800919150f0d344745c , .uf779966cc0515800919150f0d344745c .postImageUrl , .uf779966cc0515800919150f0d344745c .centered-text-area { min-height: 80px; position: relative; } .uf779966cc0515800919150f0d344745c , .uf779966cc0515800919150f0d344745c:hover , .uf779966cc0515800919150f0d344745c:visited , .uf779966cc0515800919150f0d344745c:active { border:0!important; } .uf779966cc0515800919150f0d344745c .clearfix:after { content: ""; display: table; clear: both; } .uf779966cc0515800919150f0d344745c { display: block; transition: background-color 250ms; webkit-transition: background-color 250ms; width: 100%; opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; background-color: #95A5A6; } .uf779966cc0515800919150f0d344745c:active , .uf779966cc0515800919150f0d344745c:hover { opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; background-color: #2C3E50; } .uf779966cc0515800919150f0d344745c .centered-text-area { width: 100%; position: relative ; } .uf779966cc0515800919150f0d344745c .ctaText { border-bottom: 0 solid #fff; color: #2980B9; font-size: 16px; font-weight: bold; margin: 0; padding: 0; text-decoration: underline; } .uf779966cc0515800919150f0d344745c .postTitle { color: #FFFFFF; font-size: 16px; font-weight: 600; margin: 0; padding: 0; width: 100%; } .uf779966cc0515800919150f0d344745c .ctaButton { background-color: #7F8C8D!important; color: #2980B9; border: none; border-radius: 3px; box-shadow: none; font-size: 14px; font-weight: bold; line-height: 26px; moz-border-radius: 3px; text-align: center; text-decoration: none; text-shadow: none; width: 80px; min-height: 80px; background: url(https://artscolumbia.org/wp-content/plugins/intelly-related-posts/assets/images/simple-arrow.png)no-repeat; position: absolute; right: 0; top: 0; } .uf779966cc0515800919150f0d344745c:hover .ctaButton { background-color: #34495E!important; } .uf779966cc0515800919150f0d344745c .centered-text { display: table; height: 80px; padding-left : 18px; top: 0; } .uf779966cc0515800919150f0d344745c .uf779966cc0515800919150f0d344745c-content { display: table-cell; margin: 0; padding: 0; padding-right: 108px; position: relative; vertical-align: middle; width: 100%; } .uf779966cc0515800919150f0d344745c:after { content: ""; display: block; clear: both; } READ: Against Euthanasia Essay For example, statistics on approximately 20 percent of fatalities in 2002 were reported from health departments and fatality review boards, compared to 11.4 percent for 2001, .