Did Tecumsehs Curse Kill Seven US Presidents

Tecumseh’s Curse, also called the Curse of Tippecanoe, stems from an 1809 dispute between U.S. President William Henry Harrison and Shawnee Indian leader Tecumseh. Some believe the curse is the reason that Harrison, and every following president up to Kennedy who was elected in a year ending in zero, died in office. Background In 1840,  William Henry Harrison won the presidency with the slogan, Tippecanoe and Tyler Too, which referenced Harrisons role in the American victory at the Battle of Tippecanoe in 1811. While Tecumseh was the leader of the Shawnee, the opposing side in the battle, his hatred for Harrison actually dated back to 1809. While governor of the Indiana Territory, Harrison negotiated a treaty with Native Americans in which the Shawnee ceded large tracts of land to the U.S. government. Angered by what he considered Harrison’s unfair tactics in negotiating the deal, Tecumseh and his brother organized a group of local tribes and attacked Harrison’s army, thus starting the Battle of Tippecanoe. During the War of 1812, Harrison furthered reinforced his anti-Native reputation when he defeated the British and the tribes that aided them in the Battle of the Thames. This additional defeat and the loss of more land to the American government is purportedly what drove Tecumsehs brother, Tenskwatawa—known by the Shawnee as â€Å"The Prophet†Ã¢â‚¬â€to place a curse of death on all future U.S. presidents elected in years ending in a zero. Harrisons Death Harrison was elected president  with almost 53% of the vote, but he barely had a chance to settle in to the office before his death. After delivering a very long inaugural address on a cold and windy day, he was stuck in a rainstorm and caught a serious cold which would eventually turn into the severe pneumonia infection that killed him only 30 days later—Harrisons inauguration was on March 4 and he died on April 4, 1841. His death was first in a series of tragedies that struck presidents winning an election at the start of a new decade—a pattern that would become known as Tecumsehs Curse, or The Curse of Tippecanoe. Other Victims Abraham Lincoln was elected in 1860 as the first person to run under the Republican party. The United States quickly moved into a Civil War which would last from 1861-1865. On April 9th, General Robert E. Lee surrendered to General Ulysses S. Grant, thereby ending the rift that was tearing apart the nation. Only five days later on April 14, 1865, Lincoln was assassinated by Southern sympathizer John Wilkes Booth. James Garfield was elected to the presidency in 1880. He took office on March 4, 1881. On July 2, 1881, Charles J. Guiteau shot the president, which eventually led to his death on September 19, 1881. The mentally unbalanced Guiteau was upset because he had been denied a diplomatic post by the Garfield administration. He was eventually hung for his crime in 1882. William McKinley was elected to his second term in 1900. Once again, he defeated his opponent, William Jennings Bryan as he had in 1896. On September 6, 1901, McKinley was shot by Leon F. Czolgosz. McKinley died on September 14th. Czolgosz called himself an anarchist and admitted to killing the president because ​...he was the enemy of the people... He was electrocuted in October 1901. Warren G. Harding, elected in 1920,  is widely known as one of the worst presidents of all time. Scandals such as the Teapot Dome and others marred his presidency. On August 2, 1923, Harding was visiting San Francisco on a cross-country Voyage of Understanding to meet people across the nation. He suffered a stroke and died at the Palace Hotel. Franklin Roosevelt was elected to his third term in 1940. He would be elected again in 1944. His presidency began in the depths of the Great Depression and ended shortly after the fall of Hitler in World War II. He died on April 12, 1945, of a cerebral hemorrhage. Since he was elected during one of his terms in a year that ended with a zero, he is considered part of Tecumsehs curse. John F. Kennedy became the youngest elected president upon his victory in 1960. This charismatic leader suffered some highs and lows during his short term in office, including the Bay of Pigs Invasion, the creation of the Berlin Wall, and the Cuban Missile Crisis. On November 22, 1963, Kennedy was riding in a motorcade through Dallas and was assassinated. Lee Harvey Oswald was found to be guilty as a lone gunman by the Warren Commission. However, many people still question whether more individuals were involved in a conspiracy to kill the president. Breaking the Curse In 1980, Ronald Reagan became the oldest man to be elected president. This actor-turned-politician also suffered highs and lows during his two terms in office. He is seen as being an important figure in the breakdown of the former Soviet Union. However, his presidency was tarnished by the Iran-Contra Scandal. On March 30, 1981, John Hinckley attempted to assassinate Reagan in Washington, D.C. Reagan was shot but was able to survive with quick medical attention. Reagan was the first to foil Tecumsehs curse and, some hypothesize, the president who finally broke it for good. George W. Bush, elected in the curse-active year of 2000, survived two assassination attempts and several alleged plots during his two terms in office. While some devotees of the curse suggest that the assassination attempts themselves were the Tecumsehs work, every President since Nixon has been the victim of at least one assassination plot. Elected in 2016, Donald Trump is considered immune from the curse—at least for his first term. The next presidential election will be held in November 2020. Tecumseh will be watching.

The Failure of Education in Pakistan - 717 Words

Education plays an important role in producing skilled individuals and leading the economy towards the path of sustainable economic development. It is only because of education that new technologies and advancement has occurred. Similarly poor educational system may be one of the most important reasons why poor countries do not grow. This is the main reason why the quality of education has a declining trend in Pakistan. The population of Pakistan is more than 180 million but the literacy rate of Pakistan is only 58 percent whereas according to Economic definition, a literate person is one who can read and write his/her name. But many people don’t even know how to read and write. There are many important factors which are responsible for failure in education in Pakistan. Nearly 16% of Pakistans adult population has completed higher education whereas in other countries it is below than 12%. Other factor is that there is not any awareness of education and its importance due to highly conservative ideas. Moreover there are many other reasons of failure of education in Pakistan is difference in education standards like most of the schools on Pakistan are following Cambridge system, a UK based system, some are following Government system which is different according to provinces, and some are following the madarasa system which is broadly consists of religious education. Due to this there comes a difference in opinion of the students of these systems. The other problem thatShow MoreRelatedReasons For The Failure Of Pakistan s Education System1829 Words   |  8 Pagesschools, colleges and universities of Pakistan. Moreover, the purpose of this report is to explore the key issues, problems and the new challenges faced in educational sector of Pakistan. Educational system matures the person mentally, socially, physically and spiritually. 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Cost of Capital, Capital Budgeting and Financial Planning Free Essays

string(32) " premium is estimated to be 6%\." Assignment| Cost of Capital, Capital Budgeting and Financial Planning| Chapter(s)| 9, 10, 12| Group Name| | Student Name(s)| | Date| | Instructions: HW Assignments will be uploaded to Kean Blackboard and must be accessed from there. You must work in groups where assigned (or independently if not assigned to groups) on homework assignments. Points are noted against each question. We will write a custom essay sample on Cost of Capital, Capital Budgeting and Financial Planning or any similar topic only for you Order Now You are required to submit Home Work assignments electronically on Kean Blackboard using MS-Office or other text editor. You are required to complete your assignments as per the due date indicated by the Professor. Total Points in Assignment: 100 (Points scored will be scaled down to a maximum of 15 towards the final grade) Assignment: Part I: Cost of Capital During the last few years, Harry Davis Industries has been too constrained by the high cost of capital to make many capital investments. Recently, though, capital costs have been declining, and the company has decided to look seriously at a major expansion program that has been proposed by the marketing department. Assume that you are an assistant to Leigh Jones, the financial vice-president. Your first task is to estimate Harry Davis’s cost of capital. Financial Statements iframe class="wp-embedded-content" sandbox="allow-scripts" security="restricted" style="position: absolute; clip: rect(1px, 1px, 1px, 1px);" src="https://phdessay.com/financial-statements-2/embed/#?secret=vw3HS70LFw" data-secret="vw3HS70LFw" width="500" height="282" title="#8220;Financial Statements#8221; #8212; Free Essays - PhDessay.com" frameborder="0" marginwidth="0" marginheight="0" scrolling="no"/iframe Jones has provided you with the following data, which she believes may be relevant to your task: a) The firm’s tax rate is 40%. b) The current price of Harry Davis’s 12% coupon, semiannual payment, noncallable bonds with 15 years remaining to maturity is $1,153. 72. Harry Davis does not use short-term interest-bearing debt on a permanent basis. New bonds would be privately placed with no flotation cost. c) The current price of the firm’s 10%, $100 par value, quarterly dividend, perpetual preferred stock is $116. 95. Harry Davis would incur flotation costs equal to 5% of the proceeds on a new issue. ) Harry Davis’s common stock is currently selling at $50 per share. Its last dividend (D0) was $3. 12, and dividends are expected to grow at a constant rate of 5. 8% in the foreseeable future. Harry Davis’s beta is 1. 2; the yield on T-bonds is 5. 6%; and the market risk premium is estimated to be 6%. You read "Cost of Capital, Capital Budgeting and Finan cial Planning" in category "Papers" For the over-own-bond-yield-plus-judgmental-risk-premium approach, the firm uses a 3. 2%judgmental risk premium. e) Harry Davis’s target capital structure is 30% long-term debt, 10% preferred stock, and 60%common equity. To help you structure the task, Leigh Jones has asked you to answer the following questions. . What sources of capital should be included when you estimate Harry Davis’s weighted average cost of capital (WACC)? Should the component costs be figured on a before-tax or an after-tax basis? Should the costs be historical (embedded) costs or new (marginal) costs? (5 points) Sources of capital to be included to estimate WACC are * Long term debt – to be considered after tax * Preferred stock – to be considered before tax ( preferred stock is not tax deductible) * Common equity – to be considered before tax When it comes to corporate financing, most firms incorporate tax effects in the cost of capital. For this reason, component costs should be calculated on an after-tax basis. In financial management the WACC is used primarily to make investment decisions and these decisions hinge on projects expected future returns versus the cost of new or marginal capital that will be used to finance these projects. Thus the relevant cost it marginal cost of new debt to be raised during the planning period 2. What is the market interest rate on Harry Davis’s debt, and what is the component cost of this debt for WACC purposes? (3 points) Pre -Tax cost of Debt is the YTM in the case of a Bond. The current price of Harry Davis’s 12% coupon, semiannual payment, noncallable bonds with 15 years remaining to maturity is $1,153. 72. We used the RATE function in Excel to calculate the YTM: n| 30| PV| -1153. 72| pmt| 60| FV| 1000| Rate (i)| 5%| =RATE(30,60,-1153. 72,1000) = 5% Since this is a semiannual rate, we multiplied by 2 to find the annual rate, which is the pre-tax cost of debt. 5% x 2 = 10% = rd After tax component cost of debt = Interest Rate – Tax Savings = rd – rdT We calculated that the rd is 10%, and it is stated above that the tax rate is 40%. rd(1 – T) = 10. %(1 – 0. 40) = 10. 0%(0. 60) = 6. 0 = 6% component cost of debt, which is the after-tax cost of debt. 3. What is the firm’s cost of preferred stock? (3 points) The current price of the firm’s 10%, $100 par value, quarterly dividend, perpetual preferred stock is $116. 95. Harry Davis would incur flotation costs equal to 5% of the proceeds on a new issue. The cost of preferred stock is simply the preferred dividend divided by the price the company will receive if it issues new preferred stock. No tax adjustment is necessary, as preferred dividends are not tax deductible. Dps is the Preferred dividend = . 10($100) = $10 Pps is the preferred stock price = $116. 95 F is the flotation cost as a percentage of proceeds = 5% rps = Dps / Pps(1-F) = $10 / 111. 10 = 0. 09 = 9% cost of preferred stock 4. Would you expect Harry Davis’s preferred stock to be more riskier or less riskier to investors than its debt? Compare the preferred stock yield to the yield to maturity on the debt and explain the risk/return trade-off between preferred stock and debt from an investor’s point of view. (3 points) Preferred stocks are riskier to investors than debt. Corporations own most preferred stock, because 70% of preferred dividends are non-taxable to corporations. Therefore, preferred stock often has a lower before-tax yield than the before-tax yield on debt. But, the after-tax costs to the issuer are higher on preferred stock than debt. This is consistent with the higher risks of preferred stock. 5. Harry Davis doesn’t plan to issue new shares of common stock. Using the CAPM approach, what is Harry Davis’s estimated cost of equity? (2 points) Harry Davis’s beta is 1. 2; the yield on T-bonds is 5. 6%; and the market risk premium is estimated to be 6%. Risk-free rate: 5. 6% Market risk premium: 6% Beta: 1. 2 rs = Risk-free rate + (Market risk premium) (Beta) rs = rRF + (RPM) bi rs = . 056 + (. 06)(1. 2) = 0. 128 = 12. 8% estimated cost of equity using CAPM approach 6. What is the estimated cost of equity using the discounted cash flow (DCF) approach? (2 points) Harry Davis’s common stock is currently selling at $50 per share. Its last dividend (D0) was $3. 12, and dividends are expected to grow at a constant rate of 5. 8% in the foreseeable future. P0 = $50 D0 = $3. 12 g = 5. 8% D1 = $3. 30 rs = D1/P0 + g D1= D0(1+g)= $3. 12(1+. 058) = $3. 30 s = ($3. 30/$50)+5. 8% = 6. 6% +5. 8% = 12. 4% estimated cost of equity using DCF approach 7. Suppose the firm has historically earned 15% on equity (ROE) and retained 62% of earnings, and investors expect this situation to continue in the future. How could you use this information to estimate the future dividend growth rate, and what growth rate would you get? Is this consistent with t he 5. 8% growth rate provided by Jones? (2 points) Payout rate = 100% – 62% = 38% ROE = 15% Growth from earnings retention model: g = (Retention rate)(ROE) g = (1 – Payout rate)(ROE) g = (1 – 0. 38)(15%) = 9. %. Using the Earnings Retention Model, the estimated future dividend growth rate is 9. 3%, which is almost twice the growth rate provided by Jones, and hence inconsistent. Note that the earning retention model assumes the retention and payout rate will remain constant, as will the ROE on new investments. Under these assumptions, the earnings growth and dividends growth rate will also be constant. 8. What is the cost of equity based on the bond-yield-plus-judgmental-risk-premium method? (2 points) For the over-own-bond-yield-plus-judgmental-risk-premium approach, the firm uses a 3. %judgmental risk premium. We calculated earlier that the company’s bond yield is 10%. rs= rd + Judgmental risk premium rs= 10. 0% + 3. 2% = 13. 2% cost of equity based on b ond-yield-plus-judgmental-risk-premium method 9. What is your final estimate for the cost of equity, rs? (2 points) CAPMrs = 12. 8% DCF rs= 12. 4% Bond-yield-plus-judgmental-risk-premium risk rs = 13. 2% Average rs= 12. 8% Final estimate for the cost of equity, rs = 12. 8% 10. What is Harry Davis’s weighted average cost of capital (WACC)? (2 points) The firm’s tax rate is 40%. Harry Davis’s target capital structure is 30% long-term debt, 10% preferred stock, and 60%common equity. We calculated earlier that the pre-tax cost of debt, rd is 10%, the cost of preferred stock, rps is 9% and the cost of equity, rs is 12. 8%. Wd = 30% rd = 10% T = 40% Wps = 10% rps = 9% Ws = 60% rs = 12. 8% WACC= wdrd(1 – T) + wpsrps + wsrs WACC= 0. 30(. 10)(1 ? 0. 40) + 0. 10(. 09) + 0. 60(. 128) = . 1038 = 10. 38% weighted average cost of capital 11. What four common mistakes in estimating the WACC should Harry Davis avoid? (2 points) Four common mistakes that are to be avoided are 1. Using current cost of debt (instead of historical cost of debt) 2. Mixing current and historical measures to calculate MRP 3. Using book weights to estimate the weight for capital structure (instead of market weights) 4. Misidentifying the capital component sources Part II: Capital Budgeting You have just graduated from the MBA program of a large university, and one of your favorite courses was â€Å"Today’s Entrepreneurs. † In fact, you enjoyed it so much you have decided you want to â€Å"be your own boss. † While you were in the master’s program, your grandfather died and left you $1 million to do with as you please. You are not an inventor and you do not have a trade skill that you can market; however, you have decided that you would like to purchase at least one established franchise in the fast-foods area, maybe two (if profitable). The problem is that you have never been one to stay with any project for too long, so you figure that your time frame is three years. After three years you will sell off your investment and go on to something else. You have narrowed your selection down to two choices; (1) Franchise L, Lisa’s Soups, Salads, ; Stuff and (2) Franchise S, Sam’s Fabulous Fried Chicken. The net cash flows shown below include the price you would receive for selling the franchise in Year 3 and the forecast of how each franchise will do over the three-year period. Franchise L’s cash flows will start off slowly but will increase rather quickly as people become more health conscious, while Franchise S’s cash flows will start off high but will trail off as other chicken competitors enter the marketplace and as people become more health conscious and avoid fried foods. Franchise L serves breakfast and lunch, while Franchise S serves only dinner, so it is possible for you to invest in both franchises. You see these franchises as perfect complements to one another: You could attract both the lunch and dinner crowds and the health conscious and not so health conscious crowds without the franchises directly competing against one another. Here are the net cash flows (in thousands of dollars): Depreciation, salvage values, net working capital requirements, and tax effects are all included in these cash flows. You also have made subjective risk assessments of each franchise, and concluded that both franchises have risk characteristics that require a return of 10%. You must now determine whether one or both of the franchises should be accepted. . What is the difference between independent and mutually exclusive projects? (2 points) Independent projects are those projects whose cash flows are not affected by other projects. If Costco is considering opening a new store in Los Angeles and another one in New York, they would be independent. Mutually exclusive projects are two different metho ds of attaining the same result. If one is accepted the other would be rejected. If Costco were considering relocating its corporate headquarters to Los Angeles or New York, only one of the 2 locations will be selected thus rejecting the alternate location. When projects are mutually exclusive, it means they do the same job or have the same purpose. 2. Define the term net present value (NPV). What is each franchise’s NPV? (4 points) Net Present Value is defined as the present value of project’s cash inflows minus the present value of its costs. It tells us how the project contributes to shareholder wealth. The larger the NPV the more value the project adds and thus the higher the stock price. NPV = CF0 + CF1/ (1+r)1 + CF2/(1+r)2 + CF3/(1+r)3†¦.. + CFN/(1+r)N r = 10% Franchise L CF0L = -100 CF1L = 10 CF2L = 60 CF3L = 80 NPVL= CF0L + CF1L/ (1+r)1 + CF2L/(1+r)2 + CF3L/(1+r)3 = -100 +10/(1+. 10)1 + 60/(1. 10)2 + 80/(1. 10)3 = -100 + 9. 09 + 49. 59 + 60. 11 = $18. 79 Franchise S CF0S = -100 CF1S = 70 CF2S = 50 CF3S = 20 NPVS= CF0S + CF1S/ (1+r)1 + CF2S/(1+r)2 + CF3S/(1+r)3 = -100 +70/(1+. 10)1 + 50/(1. 10)2 + 20/(1. 10)3 = -100 + 63. 64 + 41. 32 + 15. 03 = $19. 99 3. What is the rationale behind the NPV method? According to NPV, which franchise or franchises should be accepted if they are independent? Mutually exclusive? How would the NPVs change if the cost of capital changed? (4 points) NPV is generally regarded as the best single screening criterion, primarily because it is directly related to the firm’s central goal of maximizing the stock’s intrinsic value. NPV tells us how the project contributes to shareholder wealth. The larger the NPV the more value the project adds and thus the higher the stock price. A negative NPV indicates sufficient cash is not being generated from the project to meet cost associated with the project. Zero NPV indicates that cash generated is only sufficient to cover costs. Positive NPV on the other hand indicates that the inflow of cash is larger than the outflow. NPV rules dictate that if projects are independent, both projects should be accepted as long as they have a positive NPV. In this case both Franchise S ; L have positive NPV’s and should be accepted. If projects are mutually exclusive, then the project with the larger NPV should be selected. In this case, Franchise S has a higher NPV indicating that the returns from investing in Franchise S is larger and thus Franchise S should be selected. 4. Define the term internal rate of return (IRR). What is each franchise’s IRR? (4 points) IRR is the discount rate that forces the PV of the inflow of a project to equal the initial cost. In other words it forces the NPV to be zero. IRR is an estimate of the projects rate of return and it is comparable to the YTM on a bond. NPV = CF0 + CF1/ (1+IRR)1 + CF2/(1+IRR)2 + CF3/(1+IRR)3†¦.. + CFN/(1+IRR)N = 0 Using Excel function IRR | Expected | | net cash flows | Year (t)| Franchise L| Franchise S| 0 | ($100)| ($100)| 1 | 10 | 70 | 2 | 60 | 50 | 3 | 80 | 20 | IRR| 18. 13%| 23. 56%| IRRL = 18. 13% IRRS = 23. 56% 5. What is the logic behind the IRR method? According to IRR, which franchises should be accepted if they are independent? Mutually exclusive? How would the IRRs change if cost of capital changed? 4 points) IRR is an estimate of a projects rate of return. If the return exceeds the cost of funds used to finance the project, then the difference is a bonus that goes to the firm’s stockholders and causes the stock price to rise. So if the WACC/hurdle rate(r) is less than the estimated return IRR, it indicates project will be profitable. As in NPV where zero i s the threshold above which the project is considered profitable, r is the threshold above which IRR is considered profitable In the condition where Franchise S and L are independent, both franchises have positive IRR’s and thus both franchises should be accepted. However, when both franchises are mutually exclusive, the franchise with the larger IRR has to be selected, which in this case Franchise S. 6. Construct NPV profiles for Franchises L and S. At what discount rate do the profiles cross? From the NPV profile which franchise or franchises should be accepted if they are independent? Mutually exclusive? Explain. (6 points) NPV Profile for Franchise S ; LCost of Capital = 10%| | Year =| 0| 1| 2| 3| Project S| -100. 00| 70| 50| 20| Project L| -100. 00| 10| 60| 80| | | | | | | r| NPVS| NPVL| | | 0%| $40. 00| $50. 00| | | 5%| $29. 29| $33. 05| | 8. 68%| $22. 32| $22. 32| | | 10%| $19. 98| $18. 78| | | 15%| $11. 83| $6. 67| | | 18. 126%| $7. 23| $0. 00| | | 20%| $4. 63| -$3. 70| | | 23. 564%| $0. 00| -$10. 20| | On this plot the X Axis is the cost of capital and the Y axis is the NPV. IRR is the discount rate at which profile line crosses the X axis. Profiles crossover at an 8. 68% cost of capital. Based on the plot, the NPV for both Franchise S and Franchise L have NPV’s above the cost of capital indicating cash inflow is larger than the costs and thus both projects should be selected if they are independent of each other. On the other hand, if the projects are mutually exclusive, the project with the larger x-intercept (higher IRR), which is Franchise S, should be accepted. 7. What is the underlying cause of ranking conflicts between NPV and IRR? (3 points) Ranking conflicts occur when cost of Capital is higher than crossover rate which causes NPV and IRR to point in different directions. The two basic conditions that cause these conflicts are * Timing difference: When one project receives majority of the cash early while the other receives it later. This is the reason for conflict between Franchise S ; Franchise L * Project size (scale) difference: Significant difference in invested amount can cause a conflict When either timing or size differences occur, the firm will have different amounts of funds to invest in other projects depending on which of the two mutually exclusive projects it chooses. Given this situation, the rate of return at which differential cash flows can be reinvested is a critical issue. Therefore, whenever conflict exists between mutually exclusive projects, NPV method is better to use. 8. What is the â€Å"reinvestment rate assumption,† and how does it affect the NPV versus IRR conflict? (3 points) NPV calculation is based on the assumption that cash inflows can be reinvested at the projects risk adjusted WACC, whereas the IRR calculation is based on the assumption that cash inflows can be reinvested at the IRR itself. Since NPV assumes reinvestment at cost of capital which is more realistic and is typically lower than the IRR (cash flows generally cannot be reinvested at heir IRR), so NPV is the more reasonable method. NPV should be used to choose between mutually exclusive projects. . Define the term modified IRR (MIRR). Find the MIRRs for Franchises L and S. (4 points) IRR overstates the expected rate of return for accepted projects because cash flows cannot be reinvested at the IRR. The Modified IRR (MIRR) rectifies this problem by assuming reinvestment at the WACC or any other reasonable rate. Using excel function MIRR, we calculated the MIRR for Franchise L and S. WACC| 10%| | | | year| 1| 1| 2| 3| Franchise L| ($100)| 10| 60| 80| Franchise S| ($100)| 70| 50| 20| | | | | | MIRRL| 16. 50%| | | | MIRRS| 16. 89%| | | | 10. What are the MIRR’s advantages and disadvantages vis-a-vis the regular IRR? What are the MIRR’s advantages and disadvantages vis-a-vis the NPV? (4 points) MIRR has two significant advantages over IRR. First, MIRR assumes reinvestments at cost of capital rather than investment at IRR which is generally not correct. Thus, MIRR is usually a better indicator of profitability. In addition, the MIRR eliminates the multiple IRR problem because there can never be more than one MIRR, and it can be compared with the cost of capital when deciding on accepting or rejecting projects. MIRR does not always lead to the same decision as NPV in the case of mutually exclusive projects where difference in size and timing can give rise to conflicts. In these considerations, NPV is a better indicator as it selects the project that maximizes value. However, MIRR is superior to the regular IRR as an indicator of a project’s â€Å"true† rate of return. Part III: Forecasting Financial Statements Matthews Industries’ most recent financial statements are available in the attached Excel worksheet and also in the partial model file Ch12 P11 Build a Model. xls from the textbook’s web site. Matthews Industries’ financial planners must forecast the company’s financial results for the coming year. The forecast will be based on the forecasted financial statements method, and any additional funds needed will be obtained by using notes payable. Complete the partial model and answer the following questions. 1. Assume that the firm’s 2010 profit margin, payout ratio, capital intensity ratio, and spontaneous liabilities to sales ratio remain constant. If sales grow by 10% in 2011, what is the required external capital the firm will need in 2011 as calculated by the AFN equation? 10 points) AFNMatthews =| Add’l Req’d Assets| ? | Spontaneous liabilities| ? | Add’n to RE| =| (A0*/S0)? S | ? | (L0*/S0)? S | ? | S1 ? M ? (1–POR)|   | | | | | |   | =| (A0*/S0)(gS0) | ? | (L0*/S0)(gS0) | ? | S1 ? M ? (1–POR)|   | | | | | |   | =| $660| ? | $74. 70| ? | $257. 73|   | | | | | |   | AFNMatthews =| $327. 27| million|    |   |   |   | The required external capital for 2011 as calculated by AFN is 327. 27 Million. 2. If 2010 ratios remain constant, what is Matthews’ self-supporting growth rate? How will the self-supporting growth rate change if each of the following changes occur: (1) the profit margin declines, (2) the payout ratio increases, or (3) the capital intensity ratio declines? (10 points) | PM(1 – POR)(S0)| $234. 30|   | Self-supporting g =| =| | = 4. 17%| | A0* – L0* – PM(1 – POR)S0| $5,615. 70|   | Mathew’s self-supporting growth is calculated to be 4. 17%. Effect on Self-Supporting growth when all ratios are kept constant except one ratio is changed as follows 1) When the profit margin declines, the self-supporting growth percentage drops. Assuming that everything else is constant and M falls to 2. 55%, self-supporting growth g would fall to 2. 96% 2) When Payout-ratio increases, self-supporting growth percentage drops. Assuming that everything else is constant and POR increases to 55%, self-supporting growth g would fall to 3. 39% 3) When capital intensity ratio (A0*/S0) declines, it does not change the self-supporting growth 3. Matthews’ management has reviewed its financial statements and arrived at two possible scenarios for 2011. The first scenario assumes a steady state while the second scenario, the target scenario, shows some improvement in ratios toward industry-average values. Forecasted values for the scenarios are shown in the partially completed file Ch12 P11 Build a Model. xls. If Matthews assumes that external financing is achieved through notes payable and financing feedbacks are not considered because the new notes payable are added at the end of the year, what are the firm’s forecasted AFN, EPS, DPS, and year-end stock price under each scenario? (14 points) Using the file Chapter 12P11 Build a Model. ls, forecasted values for scenarios are as follows: Forecasted Values| Steady State| Target State| AFN| $324. 40 Million| -332. 50 Million| EPS| $3. 16| $5. 66| DPS| $1. 42| $2. 41| Year-end Stock Price| $25. 27| $70. 79| See excel file submitted separately for detailed calculations on Part III. Scoring Sheet: Question #| Max Points| Points scored| Part I| | | 1| 5| | 2| 3| | 3| 3| | 4| 3| | 5 | 2| | 6| 2| | 7| 2| | 8| 2| | 9| 2| | 10| 2| | 11| 2| | Part II| | | 1| 2| | 2| 4| | 3| 4| | 4| 4| | 5| 4| | 6| 6| | 7| 3| | 8| 3| | 9| 4| | 10| 4| | Part III| | | 1| 10| | 2| 10| | 3| 14| | TOTAL| 100| | | | | Points towards final grade| 15| | How to cite Cost of Capital, Capital Budgeting and Financial Planning, Papers

Portia The Control Freak Essay Example For Students

Portia The Control Freak Essay I would love to write a critical essay about the role of Portia in Shakespeare’s â€Å"Merchant of Venice,† hailing her as one of Shakespeare’s greatest contributions to the society of the sane; however, I find this impossible after re-reading the text. At first, I hung on her every word and was amazed at her wit, but later I found her to be just another Shakespearean psycho. Basically, I understood Portia to be nothing less than an obedient daughter obeying the whims of her dead, over-protective father. She speaks in terms of respect about the coffin ritual, and the reader believes her to be sincere. Later as her character is unfolded, the reader sees a wife in love with the husband who was wise enough to earn her love (and consequently her fortune! ). Beware, gentle reader! Do not fall under the spell of Portia the control freak! The following scenerios must be proof that this woman is not to be trusted! First of all, let’s evaluate the scene where Portia and Bassanio are before the caskets where Bassanio must make his choice. The dialogue directly preceeding the finding of the casket is basic lover’s speech, but wait! Listen carefully to what Portia says: â€Å"If you do love me, you will find me out† (III ii 41). Portia leads Bassanio to believe that the choice he makes in the caskets is his own. She leads the reader to believe that Bassanio’s love for her is the only force which leads to the discovery of the correct casket. However, earlier when Portia is speaking of the preparations for the casket choice, she speaks of music which is to be played while Bassanio makes his choice. Ok, this seems innocent enough; but examine the song–the first two lines of the song rhyme with lead! It doesn’t take long for the subliminal message to be absorbed in Bassanio’s brain, and the lead casket is chosen. This manipulative device is an indication to me that Portia has a need to make things go her way. She is afraid that Bassanio will make the wrong choice, and therefore assists him. Point #2. Portia creates a way of controlling the future of the relationship between herself and Bassanio. Portia gives Bassanio a ring with the words, â€Å"I give you this ring, which when you part from, lose, or give away, / Let it presage the ruin of your love†. Of course, Bassanio gives away the ring first chance he gets. Portia later makes known that the man he gave the ring to was her, and she proceeds to cold Bassanio for his lack of love. Bassanio is trapped! No matter what he does for the rest of their relationship, in his mind will remain the idea that Portia is watching! This is a clever device invented by Mr. Shakespeare; however, it does display a certain obsessive, manipulative air about Portia. Hmmmmm†¦. Lastly, I would like to take a venture. I was wondering earlier while reading the â€Å"Merchant of Venice† why Shakespeare used the doppel- ganger technique in his presentation of Nerissa and Portia. Nerissa follows Portia about and makes the same decisions Portia does. Nerissa s not as bright as Portia, and yet she meets the same ultimate fate as Portia. I am wondering if Shakespeare could have used Nerissa to point out the manipulative characteristics of Portia. It is true that one way that manipulative people feed is through weaker people who uphold them and their values. If anyone has any insight on this thought, let me know! Well, there you have it. My true feelings on Portia. Sure she is to be admired in some aspects, but perhaps as all great archetypes she has her foibles and faults. If anyone finds anything about the aforementioned aspects of Portia’s character, please let me know.