Strategic Position of McDonalds in the Fast Food Industry Essay

Strategic Position of McDonalds in the Fast Food Industry - Essay Example According to Derdak and Pederson, McDonald’s Corporation is the leading hamburger fast-food restaurant chain in the world. Maurice McDonald and Richard McDonald initially started the company in 1940 as a barbecue restaurant but Ray Kroc later brought it in 1995; Kroc was initially a franchise agent of the restaurant and he is the one who initiated the global expansion of the restaurant chain.According to Derdak and Pederson, McDonald’s Corporation is the leading hamburger fast food restaurant chain in the world. Maurice McDonald and Richard McDonald initially started the company in 1940 as a barbecue restaurant but Ray Kroc later brought it in 1995; Kroc was initially a franchise agent of the restaurant and he is the one who initiated the global expansion of the restaurant chain. Presently the McDonald’s Corporations has its own restaurants that it manages and there are licensed franchisees and affiliates that operate under the corporation’s portfolio. The refore, the net income of the company is attributed to sales from its own restaurants, licensing fees from franchisees, and royalties. The present headquarters of the corporation are in Oak Brook, Illinois in the United States, and it has presence in over thirty four thousand locations across the world. Among the popular dishes served at the McDonald’s restaurants include French fries, hamburger, Chicken, coffee, milk shakes, soft drinks, salads and desserts.

A History of Autism Developments

A History of Autism Developments In Autistic Space Temple Grandin is a professor of animal science at Colorado State University, and consultant to the livestock industry on animal behavior. She completed her PhD in Animal Science at the University of Illinois in Urbana and invented the hug box, a device to calm those on the autism spectrum. She is one of the first individuals on the autism spectrum to publicly share insights from her personal experience of autism. Grandin was diagnosed with brain damage when she was two. She could not speak until age three and struggled with severe behavioral issues through her teens. She thanked her mother who never lost faith in her and fought many battles to ensure that she got an education, and her high school science teacher, William Carlock, who built up her confidence and channeled her teenage fascination with cows into a career in animal science. At the University, she came to see her profound emotional connection with animals as autistic, and crucial for her work. In May 1989, she moderated a round table discussion at the conference of autism professionals and educators in Chapel Hill, North Carolina. Her presentation prompted Rimland to introduce her 1986 memoir, Emergence, as the first book written by a recovered autistic individual. By then, she was on her way to becoming the most recognized autistic people on earth. In his 1995 book An Anthropologist on Mars, neurologist Oliver Sacks depicted Grandin as a mature autistic person with a complex inner life. The title of his book was inspired by Grandin when she said all her life she felt like an anthropologist observing human interactions from a distance. But by now, Grandin wouldnt consider herself as a recovered autistic. Autism is part of who I am, she told Sacks, If I could snap my fingers and be non-autistic, I would not, because then I wouldnt be me. But Grandins perspective did not take root among the advocacy organizations. When parent-run advocacy organizations get online in the 1990s, they continued to feature images of children on their websites, as if autistic adults didnt exist. The presentation at conferences dwelled on the usual deficits and impairments, rather than on exploring the atypical gifts that Grandin found so useful in her work. Jim Sinclair, a young man in the audience, determined to change that. Besides being on the spectrum, Sinclair was born with the physical characteristics of both genders. His parents had raised him as female on the advice of their doctor, but he had never felt female. He was speaking in echolalia until he was twelve. The complex rules of the social world seemed incomprehensible to him when he was a teenager. By the time he was in graduate school, his efforts to pass as non-autistic fell apart. When Sinclair saw Portrait of an Autistic Young Man, he had a profound sense of recognition. He could see what the experts in the film could not see: that Joseph was trying to communicate through his behavior. He wanted to connect with other autistic people, so he subscribed to a quarterly publication called the MAAP (for more able autistic people) and submitted poems and letters to the editor hoping his peers would contact him. One of Sinclairs poems attracted Gary Mesibovs attention. Mesibov, a cofounder of TEACCH, offered Sinclair a scholarship to attend the Chapel Hill conference and write an essay about his experience. Sinclairs essay on the conference appeared in a TEACCH anthology along with contributions from Lorna Wing and Catherine Lord. A year later, Sinclair was invited to sit on a panel in California by the Autism Society of America. He felt like a self-narrating zoo exhibit. Rather than being the token autistic on a panel at a conference in Indianapolis, Sinclair conspired with other members of the MAAP list to make their presence visible throughout the proceedings. Each of them would make a point of raising their hands during the QA sessions, identifying themselves as autistic people, and then asked questions or make a relevant comment so that people would notice they were there. *** In 1992, Sinclair launched the first autistic-run organization in history, called Autism Network International (ANI), with Donna Williams and Kathy Lissner. ANI would stand up for the civil rights and self-determination of people all across the spectrum. ANI organized its first Autreat at Camp Bristol Hills in Canandaigua, New York, in July 1996. The theme of the conference was Celebrating Autistic Culture. Autreat became an annual event and provided a template for similar conferences in other countries. *** A new idea was brewing in the autistic community. It turned out to be an old idea from Asperger that people with the traits of his syndrome have always been part of the human community, standing apart, making the world a better place. In the late 1990s, Judy Singer, an autistic student of anthropology and sociology in Australia called it neurodiversity. After her daughters diagnosis of Asperger syndrome at age nine, Singer recognized autistic traits in herself. She joined a mailing list called Independent Living on the Autism Spectrum (InLv). People with dyslexia, ADHD, and other conditions were also welcome to join the list. It was in telephone conversations with Harvey Blume, a list member and writer in the New York Times, that Singer came up with the term neurodiversity. *** In 2004, two teenagers named Alex Plank and Dan Grover launched Wrong Planet, one of the first autistic spaces in the internet. They were both digital natives with Asperger syndrome. The community grew slowly and steadily at first, and then it went viral with Planks interview with Bram Cohen, the autistic creator of BitTorrent. *** In December 2007, a series of billboards appeared on street corners in Manhattan. One ad read, We have your son. We will make sure he will not be able to care for himself or interact socially as long as he lives. This is only the beginning. These ads were sponsored by the Child Study Center (CSC) of New York University to alert the public to the silent public health epidemic of childhood mental illness. Then from out of nowhere, an organization called the Autistic Self-Advocacy Network (ASAN) along with outraged parents and prominent disability rights groups launched a storm of e-mails and blogs in NYUs direction objecting to the demeaning wording of the ads. This is the first time in history that autistics were challenging the mainstream media without the help of a parent-run organization. The architect of the protest was a nineteen-year-old cofounder of the ASAN named Ari Neeman. Neeman was diagnosed with Asperger syndrome when he was twelve years old. On December 6, the day after the CSCs ad campaign, Neeman called the CSC expressing his concerns and left phone messages, but got no reply. Two days later, ASAN blasted out an action alert. The next day when the major media outlets were running stories on the controversy, the CSC agreed to pull the ads. In 2010, President Obama nominated Neeman to the National Council on Disability (NCS). In recent years, the ASAN had played a significant role in formulating the federal disability policy. *** For parents like Craig and Shannon Rosa, the neurodiversity movement has offered ways of fighting for a better future for their children that dont depend on hopes of recovery. One of the most important lessons they had learned on their journey with Leo is patience. They have to accept that he is unfolding at his own pace. Shannon and her circle of friends launched a website called Thinking Persons Guide to Autism for parents just starting out on the journey so that they dont have to go through the ordeal that the Rosas did.

To Kill a Mockingbird by Harper Lee :: essays research papers

I’ve been reading a fascinating book about a little community in Alabama called To Kill A Mockingbird by Harper Lee. This book portrays lessons about life and the importance of telling the truth. One of the best lessons taught in this book is that doing the right thing isn’t always rewarded. There are three characters in this story that I’d like to tell how they play a part in this small community of Maycomb. These characters are Boo Radley, Scout, and Atticus. First let me talk about Boo Radley, also known as Arthur. Boo is the object of fascination for Jem, Scout, and Dill. He is a recluse who has remained in the house down the street from the Finch house for years. When he was younger he got into some trouble when he became involved with a group of rowdy kids from Old Sarum. One night they resisted arrest by Maycomb County’s beadle and locked him in the courthouse outhouse. After that, Arthur’s father, Mr. Radley, took him home and he wasn’t seen again for fifteen years. But it was said that one day Boo Radley stabbed his father in the leg with a pair of scissors while cutting newspaper clippings for his scrapbook. For this he was locked in the courthouse basement for many years before he came home again. From these stories learned from gossiping neighbors, Jem, Scout, and Dill made ghost stories of Boo Radley, and the other children in town were afraid of him as well. They said that he only came out at night to eat cats and squirrels, and he was the local spook. Boo, however, begins to win Scout and Jem over by leaving gifts for them in the knothole of an oak tree until his brother, Nathan, cements the knothole. Boo even covers Scout with a blanket on a cold night she and Jem spent in front of the Radley house while Miss Maudie’s house burned down. Boo was so quiet that Scout never even realized he’d covered her shoulders with the blanket until after the fact. After all the children’s attempts to drag Boo Radley from his house, he ends up saving them from Bob Ewell. Now let me talk about Scout. Originally named Jean Louise Finch, scout is the narrator. In the story she is looking back as an adult to the two years of her life when she learned courage and kindness and the importance of doing the right thing.

Examine different ways in which ‘good’ is used in Meta Ethics Essay

In the modern degrading society we live in today, people are constantly questioning the highly debatable topic of morals. We would like to think that we are trying our hardest to strive to do what is right in society to make us decent people. However it is hard to do what is ‘good’ when there are so many different ways of defining the meaning of good itself. There are three main types of ethics, Descriptive, Prescriptive and Meta ethics. Descriptive ethics presents the facts in the way people live and how they make moral choices in life. It simply states the facts without making any moral judgement of ‘good’ or ‘bad’. Prescriptive ethics states the norm about what is right or wrong by examining the choices and the reasons behind the issues. It says how we should live or behave setting standards for everyone to live by. This is the most widely used form of ethical language when debating morality. Meta ethics is a philosophical analysis of different words used in ethical language. It closely examines the words themselves and their exact meaning in different contexts. The subject of Meta ethics is to intimately study the moral language to be able to reach a better understanding of its meaning. Without the knowledge and intense understanding of the language we use in moral debates, we cannot argue our points successfully or be able to come to any logical conclusion. Therefore it is vitally necessary that we determine the meaning of the words we use so we can successfully take part in these ethical discussions. The most important ethical term, which unfortunately is so loosely used in society, is the term ‘good’. We frequently hear of a concert being ‘good’ or that person is a ‘good’ person or it is ‘good’ to be peaceful. But when we so casually use the term ‘good’ do we actually know what we are implying? What does the term ‘good’ mean in itself? Surely we should all be able to instantly provide an answer to this question because we all use the term ‘good’ on a regular basis. However we find that when posed with this question, many are not sure themselves of the core meaning of the word. In this essay I shall be examining the intensity of the ethical term ‘good’ and what people mean when they determine something to be ‘good’ of ‘bad’. We need to decide in fact, if it is actually possible to define the word ‘good’ at all or does it depend totally on the situation, having a slightly different meaning in every different context. The meaning of the term ‘good’ is not necessarily something that we all naturally agree on. There are many factors that affect the reasons why we perceive the meaning of ‘good’ to be what it is. Some examples of this include the sources of our values and morals, how we are brought up and the way our conscience plays a part in our every day lives. Naturally everyone may see different situations to be different degrees of ‘good’ or ‘bad’ in their opinion. A key concept leading to the understanding of something being ‘good’ is Definism. This idea is that we need to define accurately what we mean by the term ‘good’ before we can specifically distinguish if something is good or bad. Once we have classified the meaning of ‘good’ we can then accordingly judge every situation or act against it. When we have identified the essence of the term in itself we can grasp the ideas and understandings behind it. However many ask, † can the term ‘good’ universally be defined?† We shall now look at the different ways society tries to identify the word ‘good’. There are two main ways of defining a moral act, these being absolute and relative terms. Absolute moral terms are when something is perceived as always being ‘good’ or ‘right’ regardless of the situation or the facts involved. This is also known as an objective term, it is completely independent of all conditions to determine its moral ‘goodness’. All absolute moral terms are known universally as always being correct regardless. For example, many argue that Peace will always be ‘good’ along with happiness. These terms should apply to everyone in society in every situation because they will always be right and striving to reach them can never be wrong. Relative terms are the direct opposite of absolute terms. When something is relative, it totally depends on the specific situation it is in. It is also dependent on people’s personal opinions. Everyone views situations in their own way, which is slightly different to everyone else. It all relies on what you believe it to be in your own individual opinion. The term ‘good’ therefore can only be determined in its particular context. This is also known as Subjectiveness, for example euthanasia or fighting for a cause you believe in are two examples of relative situations of doing a ‘good’ thing. There are several theories’ we can look at in which the term ‘good’ is used in Meta ethics. The first of these is the utilitarian theory of good. According to this theory, a term is determined as being good pending the results of a specific moral act. For example, if we were in the situation where we had to kill one person to save the lives of thousands of others then this would be seen as ‘good’. This is because although the sacrifice of one life is not ‘good’ in itself alone, because it saves the lives of many more it is seen as the greater ‘good’ because it is the lesser of two evils. The results of killing one person to save many are much greater than the act of killing one in the first place. The ‘evil’ of killing one is cancelled out by the ‘good’ of saving so many others. Therefore the utilitarian theory of good can be measured by what it achieves. Another important theory is that of Natural law. The term ‘good’ is used in this part of Meta ethics according to how well something fulfils its purpose. The key philosopher that brought this idea into ethical recognition was Aristotle in ancient Greece many years ago. He believed that everything existing has a natural purpose in life in which it is aiming towards as its ultimate goal. This means that the level of ‘goodness’ something is, is measured by how much a particular act contributes to the ultimate purpose the object has. If it helps to fulfil this purpose then it is a morally ‘good’ act, however if it makes it harder to fulfil its purpose then it is considered ‘bad’. This idea of Natural law lead on to the development of Christian theology, especially by the greatly admired philosopher St Thomas Aquinas who linked Aristotle’s ideas with Christianity. In religion, the term ‘good’ is related to what God would or wouldn’t approve of. If God saw a certain act as acceptable or if it fulfilled a command from him from a religious Holy Book then it would be seen as ‘good’. For example devoting time to worship him would be seen as ‘good’ but committing adultery would be seen as ‘bad’ in Gods eyes. The ultimate ‘good’ example in Christianity is Jesus whose life was seen to be morally ‘good’ because everything he did was approved of by God. He was perfect and therefore Christians today try to follow in his footsteps and do as he did. ‘Goodness’ is unlike any other quality and the ultimate aim for all living things according to many people. Something can therefore be determined as ‘good’ because it is unique, individual and supreme. We can detect this by the simple skill of human intuition because the ‘goodness’ is self-evident. This approach is known as Intuitionism or Ethical non-naturalism. Because it is a unique feature, it is very dependent on different situations or circumstances. The term ‘good’ will therefore have an individual meaning for different acts that will only apply to that one situation and could have a totally different meaning in another circumstance. We can also determine ‘good’ because intuition tells us the results it has are beneficial to others or ourselves. However, even though the consequences may benefit and be ‘good’, it is impossible to define the word from an intuitional point of view because it is always c hanging depending on the factors involved. G E Moore is the most famous example of an Intuitionist. He claimed the term ‘good’ was ‘incapable of definition because it is simple and has no parts.’ He believed too that the term had a different meaning that changed depending the circumstances or different situations the word is used. He likened this to a horse, they have many properties and qualities that make a horse a horse but if you ‘reduce a horse to its simplest terms, you can not define these terms.’ The phrase ‘good’ will have a certain meaning not only for different situations but also for different people. Many people can observe an act but they may disagree as to whether the act was good or not depending on their conscience and opinion. Intuitionism means it has a distinct meaning for you. G E Moore gave the example of the colour yellow, we cannot define a colour, we may be able to give examples of things that are yellow but to give an actual definition of yellow is quite impossible. He believed that we should judge the goodness of an action based on its results, aiming to maximise ‘good’ in the world. He was a strong intuitionist, which involved the belief that within us we have a â€Å"moral faculty† which reveals â€Å"moral truth† to us, showing us what was morally ‘good’. Another focal area of Meta ethics, which involves language, is Emotivism or ethical non-Cognitivism. Emotivism is sometimes viewed as merely the expression of feelings of the speaker. They can be seen more as commands or rules the speakers wants its audience to follow. These feelings are the opinions of the speaker saying what they believe to be right or wrong and are dependent on a matter of taste. The term ‘good’ is accordingly defined depending on what the speaker believes to be right. They state a moral preference of what they do or do not approve of and not the core meaning itself. The preferences of the speaker therefore, try to influence the opinions of the audience. They are not concerned with the moral statements themselves or their meaning but more focused on the purpose of the statement. The speaker indents on promoting a response from the audience relating to what is right or wrong. This theory is also known as the ‘Boo’ and ‘Hooray’ theory which can be seen as offensive because it is seen to reduce morality to simple cheers or boo’s. It is called this because when listening to a point of view, the audience simply shouts ‘hooray’ to say something is ‘good’ or that they approve of it or ‘boo’ if they disagree and think it is morally ‘bad’. However one problem with this theory is that in a modern society, we do not irrationally act merely on our feelings and emotions alone. We use logical thinking and reasoning too and this therefore must be included. Prescriptivism solved this problem by using reason to determine ‘goodness’. R M Hare who tried to examine what was actually happening when a person was making a moral statement took the best example of this approach. He tried to find out what was it meant to do and if moral statements had a purpose. This type of Meta ethics tries to prescribe a course of action that is recommended. . For example, the speaker may say ‘ To be considered a ‘good’ person, we should try our hardest to help those less fortunate than ourselves’. By saying this he is expressing what a good person is and also is suggesting a course of action we should take, i.e. helping others. As a result of this way of talking, the speaker is very opinionated and thus forcing an action as a result of his beliefs. The speaker is giving advice that applies to all situations at any given time regardless of other factors. It is Universable and therefore applies to all people in every situation. The theory of Universability is a general idea that can be applied to past, present and future and to all other people. In conclusion we can see that there are many different ways in which the term ‘good’ is used in Meta ethics. In Intuitionism it is used to describe moral principles that are self evidently right. In Emotivism, when we say something is ‘good’, it is what we see as being right according to out emotions and feelings. Prescriptivism on the other hand uses reason and logic to determine what is ‘good’. Utilitarianists perceive something to be ‘good’ pending the results that follow the action. How we determine what is ‘good’ or ‘bad’ to ourselves, greatly depends on which ethical view we take to situations as a result of our opinion. There is no one definition for what is ‘good’ and so it is down to us to decide which one we believe to be right and then try to live our lives accordingly.

Financial Management Chapter 8 K

ey Chapter 8 Stocks and Their Valuation LEARNING OBJECTIVES After reading this chapter, students should be able to: †¢ Identify some of the more important rights that come with stock ownership and define the following terms: proxy, proxy fight, takeover, and preemptive right. †¢ Briefly explain why classified stock might be used by a corporation and what founders’ shares are. †¢ Differentiate between closely held and publicly owned corporations and list the three distinct types of stock market transactions. Determine the value of a share of common stock when: (1) dividends are expected to grow at some constant rate, (2) dividends are expected to remain constant, and (3) dividends are expected to grow at some super-normal, or nonconstant, growth rate. †¢ Calculate the expected rate of return on a constant growth stock. †¢ Apply the total company (corporate value) model to value a firm in situations when the firm does not pay dividends or is privately he ld. †¢ Explain why a stock’s intrinsic value might differ between the total company model and the dividend growth model. Explain the following terms: equilibrium, marginal investor, and Efficient Markets Hypothesis (EMH); distinguish among the three levels of market efficiency; briefly explain the implications of the EMH on financial decisions; and discuss the results of empirical studies on market efficiency and the implication of behavioral finance on those results. †¢ Read and understand the stock market page given in the daily newspaper. †¢ Explain the reasons for investing in international stocks and identify the â€Å"bets† an investor is making when he does invest overseas. Define preferred stock, determine the value of a share of preferred stock, or given its value, calculate its expected return. 1. LECTURE SUGGESTIONS This chapter provides important and useful information on common and preferred stocks. Moreover, the valuation of stocks reinforc es the concepts covered in both Chapters 6 and 7, so Chapter 8 extends and reinforces those chapters. We begin our lecture with a discussion of the characteristics of common stocks, after which we discuss how stocks are valued in the market and how stock prices are reported in the press. We conclude the lecture with a discussion of preferred stocks.The details of what we cover, and the way we cover it, can be seen by scanning Blueprints Chapter 8. For other suggestions about the lecture, please see the â€Å"Lecture Suggestions† in Chapter 2, where we describe how we conduct our classes. DAYS ON CHAPTER: 3 OF 58 DAYS (50-minute periods) ANSWERS TO END-OF-CHAPTER QUESTIONS 8-1True. The value of a share of stock is the PV of its expected future dividends. If the two investors expect the same future dividend stream, and they agree on the stock’s riskiness, then they should reach similar conclusions as to the stock’s value. -2A perpetual bond is similar to a no-grow th stock and to a share of preferred stock in the following ways: 1. All three derive their values from a series of cash inflows–coupon payments from the perpetual bond, and dividends from both types of stock. 2. All three are assumed to have indefinite lives with no maturity value (M) for the perpetual bond and no capital gains yield for the stocks. 8-3Yes. If a company decides to increase its payout ratio, then the dividend yield component will rise, but the expected long-term capital gains yield will decline. 8-4No. The correct equation has D1 in the numerator and a minus sign in the denominator. -5a. The average investor in a listed firm is not really interested in maintaining his proportionate share of ownership and control. If he wanted to increase his ownership, he could simply buy more stock on the open market. Consequently, most investors are not concerned with whether new shares are sold directly (at about market prices) or through rights offerings. However, if a ri ghts offering is being used to effect a stock split, or if it is being used to reduce the underwriting cost of an issue (by substantial underpricing), the preemptive right may well be beneficial to the firm and to its stockholders. . The preemptive right is clearly important to the stockholders of closely held firms whose owners are interested in maintaining their relative control positions. SOLUTIONS TO END-OF-CHAPTER PROBLEMS 8-1D0 = $1. 50; g1-3 = 5%; gn = 10%; D1 through D5 = ? D1 = D0(1 + g1) = $1. 50(1. 05) = $1. 5750. D2 = D0(1 + g1)(1 + g2) = $1. 50(1. 05)2 = $1. 6538. D3 = D0(1 + g1)(1 + g2)(1 + g3) = $1. 50(1. 05)3 = $1. 7364. D4 = D0(1 + g1)(1 + g2)(1 + g3)(1 + gn) = $1. 50(1. 05)3(1. 10) = $1. 9101. D5 = D0(1 + g1)(1 + g2)(1 + g3)(1 + gn)2 = $1. 50(1. 05)3(1. 10)2 = $2. 1011. 8-2D1 = $0. 50; g = 7%; ks = 15%; [pic] = ? [pic] -3P0 = $20; D0 = $1. 00; g = 10%; [pic] = ? ; ks = ? [pic] = P0(1 + g) = $20(1. 10) = $22. ks= [pic] + g = [pic] + 0. 10 = [pic] + 0. 10 = 15. 50%. ks = 15. 50%. 8-4Dp = $5. 00; Vp = $60; kp = ? kp = [pic] = [pic] = 8. 33%. 8-5a. The terminal, or horizon, date is the date when the growth rate becomes constant. This occurs at the end of Year 2. b. 0 1 2 3 | | | | 1. 25 1. 50 1. 80 1. 89 37. 80 = [pic] The horizon, or terminal, value is the value at the horizon date of all dividends expected thereafter. In this problem it is calculated as follows: pic] c. The firm’s intrinsic value is calculated as the sum of the present value of all dividends during the supernormal growth period plus the present value of the terminal value. Using your financial calculator, enter the following inputs: CF0 = 0, CF1 = 1. 50, CF2 = 1. 80 + 37. 80 = 39. 60, I = 10, and then solve for NPV = $34. 09. 6. The firm’s free cash flow is expected to grow at a constant rate, hence we can apply a constant growth formula to determine the total value of the firm. Firm Value = FCF1/(WACC – g) Firm Value = $150,000,000/(0. 10 – 0. 05) F irm Value = $3,000,000,000.To find the value of an equity claim upon the company (share of stock), we must subtract out the market value of debt and preferred stock. This firm happens to be entirely equity funded, and this step is unnecessary. Hence, to find the value of a share of stock, we divide equity value (or in this case, firm value) by the number of shares outstanding. Equity Value per share = Equity Value/Shares outstanding Equity Value per share = $3,000,000,000/50,000,000 Equity Value per share = $60. Each share of common stock is worth $60, according to the corporate valuation model. 8-7a. 0 1 2 3 4 | | | | 3,000,000 6,000,000 10,000,000 15,000,000 Using a financial calculator, enter the following inputs: CF0 = 0; CF1 = 3000000; CF2 = 6000000; CF3 = 10000000; CF4 = 15000000; I = 12; and then solve for NPV = $24,112,308. b. The firm’s terminal value is calculated as follows: [pic] c. The firm’s total value is calculated as follows: 0 1 2 3 4 5 | | | | | | 3, 000,000 6,000,000 10,000,000 15,000,000 16,050,000PV = ? 321,000,000 = [pic] Using your financial calculator, enter the following inputs: CF0 = 0; CF1 = 3000000; CF2 = 6000000; CF3 = 10000000; CF4 = 15000000 + 321000000 = 336000000; I = 12; and then solve for NPV = $228,113,612. d. To find Barrett’s stock price, you need to first find the value of its equity. The value of Barrett’s equity is equal to the value of the total firm less the market value of its debt and preferred stock. Total firm value$228,113,612 Market value, debt + preferred 60,000,000 (given in problem) Market value of equity$168,113,612Barrett’s price per share is calculated as: [pic] 8-8FCF = EBIT(1 – T) + Depreciation – [pic] – ([pic] = $500,000,000 + $100,000,000 – $200,000,000 – $0 = $400,000,000. Firm value = [pic] = [pic] = [pic] = $10,000,000,000. This is the total firm value. Now find the market value of its equity. MVTotal= MVEquity + MVDebt $10,000,0 00,000= MVEquity + $3,000,000,000 MVEquity= $7,000,000,000. This is the market value of all the equity. Divide by the number of shares to find the price per share. $7,000,000,000/200,000,000 = $35. 00. 8-9a. Terminal value = [pic] = [pic]= $713. 33 million. . 0 1 2 3 4 | | | | | -20 30 40 42. 80 ($ 17. 70) 23. 49 522. 10 753. 33 $527. 89 Using a financial calculator, enter the following inputs: CF0 = 0; CF1 = -20; CF2 = 30; CF3 = 753. 33; I = 13; and then solve for NPV = $527. 89 million. c. Total valuet=0 = $527. 89 million. Value of common equity = $527. 89 – $100 = $427. 89 million. Price per share = [pic] = $42. 79. 8-10The problem asks you to determine the value of [pic], given the following facts: D1 = $2, b = 0. 9, kRF = 5. %, RPM = 6%, and P0 = $25. Proceed as follows: Step 1:Calculate the required rate of return: ks = kRF + (kM – kRF)b = 5. 6% + (6%)0. 9 = 11%. Step 2:Use the constant growth rate formula to calculate g: [pic] Step 3:Calculate [pic]: [pic] = P0 (1 + g)3 = $25(1. 03)3 = $27. 3182 ( $27. 32. Alternatively, you could calculate D4 and then use the constant growth rate formula to solve for [pic]: D4 = D1(1 + g)3 = $2. 00(1. 03)3 = $2. 1855. [pic] = $2. 1855/(0. 11 – 0. 03) = $27. 3182 ( $27. 32. 8-11Vp = Dp/kp; therefore, kp = Dp/Vp. a. kp = $8/$60 = 13. 3%. b. kp = $8/$80 = 10. 0%. c. p = $8/$100 = 8. 0%. d. kp = $8/$140 = 5. 7%. 8-12[pic] 8-13a. ki = kRF + (kM – kRF)bi. kC = 9% + (13% – 9%)0. 4 = 10. 6%. kD = 9% + (13% – 9%)(-0. 5) = 7%. Note that kD is below the risk-free rate. But since this stock is like an insurance policy because it â€Å"pays off† when something bad happens (the market falls), the low return is not unreasonable. b. In this situation, the expected rate of return is as follows: [pic] = D1/P0 + g = $1. 50/$25 + 4% = 10%. However, the required rate of return is 10. 6 percent. Investors will seek to sell the stock, dropping its price to the following: pic] At this point, [p ic], and the stock will be in equilibrium. 8-14Calculate the dividend cash flows and place them on a time line. Also, calculate the stock price at the end of the supernormal growth period, and include it, along with the dividend to be paid at t = 5, as CF5. Then, enter the cash flows as shown on the time line into the cash flow register, enter the required rate of return as I = 15, and then find the value of the stock using the NPV calculation. Be sure to enter CF0 = 0, or else your answer will be incorrect. D0 = 0; D1 = 0; D2 = 0; D3 = 1. 0; D4 = 1. 00(1. 5) = 1. 5; D5 = 1. 00(1. 5)2 = 2. 25; D6 = 1. 00(1. 5)2(1. 08) = $2. 43. [pic] = ? 0 1 2 3 4 5 6 | | | | | | | 1. 00 1. 50 2. 25 2. 43 0. 658 +34. 71 = 0. 858 18. 378 36. 96 $19. 894 = [pic] [pic] = D6/([pic] – g) = $2. 43/(0. 15 – 0. 08) = $34. 71. This is the stock price at the end of Year 5.CF0 = 0; CF1-2 = 0; CF3 = 1. 0; CF4 = 1. 5; CF5 = 36. 96; I = 15%. With these cash flows in the CFLO register, press NPV to g et the value of the stock today: NPV = $19. 89. 8-15a. The preferred stock pays $8 annually in dividends. Therefore, its nominal rate of return would be: Nominal rate of return = $8/$80 = 10%. Or alternatively, you could determine the security’s periodic return and multiply by 4. Periodic rate of return = $2/$80 = 2. 5%. Nominal rate of return = 2. 5% ( 4 = 10%. b. EAR = (1 + NOM/4)4 – 1 EAR = (1 + 0. 10/4)4 – 1 EAR = 0. 103813 = 10. 3813%. -16The value of any asset is the present value of all future cash flows expected to be generated from the asset. Hence, if we can find the present value of the dividends during the period preceding long-run constant growth and subtract that total from the current stock price, the remaining value would be the present value of the cash flows to be received during the period of long-run constant growth. D1 = $2. 00 ( (1. 25)1 = $2. 50PV(D1) = $2. 50/(1. 12)1= $2. 2321 D2 = $2. 00 ( (1. 25)2 = $3. 125PV(D2) = $3. 125/(1. 12)2= $2 . 4913 D3 = $2. 00 ( (1. 25)3 = $3. 90625PV(D3) = $3. 0625/(1. 12)3= $2. 7804 ( PV(D1 to D3)= $7. 5038 Therefore, the PV of the remaining dividends is: $58. 8800 – $7. 5038 = $51. 3762. Compounding this value forward to Year 3, we find that the value of all dividends received during constant growth is $72. 18. [$51. 3762(1. 12)3 = $72. 18. ] Applying the constant growth formula, we can solve for the constant growth rate: [pic]= D3(1 + g)/(ks – g) $72. 1807= $3. 90625(1 + g)/(0. 12 – g) $8. 6616 – $72. 18g= $3. 90625 + $3. 90625g $4. 7554= $76. 08625g 0. 0625= g 6. 25%= g. 8-17First, solve for the current price. P0 = D1/(ks – g) P0 = $0. 50/(0. 2 – 0. 07) P0 = $10. 00. If the stock is in a constant growth state, the constant dividend growth rate is also the capital gains yield for the stock and the stock price growth rate. Hence, to find the price of the stock four years from today: [pic] = P0(1 + g)4 [pic] = $10. 00(1. 07)4 [pic] = $13. 1079 6 ? $13. 11. [pic] 8-18a. [pic] b. [pic] 8-19 0 1 2 3 4 | | | | | D0 = 2. 00 D1 D2 D3 D4 g = 5% [pic] a. D1 = $2(1. 05) = $2. 10; D2 = $2(1. 05)2 = $2. 21; D3 = $2(1. 5)3 = $2. 32. b. Financial Calculator Solution: Input 0, 2. 10, 2. 21, and 2. 32 into the cash flow register, input I = 12, PV = ? PV = $5. 29. c. Financial Calculator Solution: Input 0, 0, 0, and 34. 73 into the cash flow register, I = 12, PV = ? PV = $24. 72. d. $24. 72 + $5. 29 = $30. 01 = Maximum price you should pay for the stock. e. [pic] f. No. The value of the stock is not dependent upon the holding period. The value calculated in Parts a through d is the value for a 3-year holding period. It is equal to the value calculated in Part e except for a small rounding error.Any other holding period would produce the same value of [pic]; that is, [pic] = $30. 00. 8-20a. 1. [pic] 2. [pic] = $2/0. 15 = $13. 33. 3. [pic] 4. [pic] b. 1. [pic] = $2. 30/0 = Undefined. 2. [pic] = $2. 40/(-0. 05) = -$48, which is nonsense. Th ese results show that the formula does not make sense if the required rate of return is equal to or less than the expected growth rate. c. No. 8-21The answer depends on when one works the problem. We used the February 3, 2003, issue of The Wall Street Journal: a. $16. 81 to $36. 72. b. Current dividend = $0. 75. Dividend yield = $0. 75/$19. 8 ( 3. 9%. You might want to use ($0. 75)(1 + g)/$19. 48, with g estimated somehow. c. The $19. 48 close was up $0. 98 from the previous day’s close. d. The return on the stock consists of a dividend yield of about 3. 9 percent plus some capital gains yield. We would expect the total rate of return on stock to be in the 10 to 12 percent range. 8-22a. End of Year: 02 03 04 05 06 07 08 | | | | | | | D0 = 1. 75 D1 D2 D3 D4 D5 D6 Dt= D0(1 + g)t D2003= $1. 75(1. 15)1 = $2. 01. D2004= $1. 5(1. 15)2 = $1. 75(1. 3225) = $2. 31. D2005= $1. 75(1. 15)3 = $1. 75(1. 5209) = $2. 66. D2006= $1. 75(1. 15)4 = $1. 75(1. 7490) = $3. 06. D2007= $1. 75(1. 15)5 = $1. 75(2. 0114) = $3. 52. b. Step 1: PV of dividends = [pic]. PV D2003 = $2. 01/(1. 12)= $1. 79 PV D2004 = $2. 31/(1. 12)2= $1. 84 PV D2005 = $2. 66/(1. 12)3= $1. 89 PV D2006 = $3. 06/(1. 12)4= $1. 94 PV D2007 = $3. 52/(1. 12)5= $2. 00 PV of dividends= $9. 46 Step 2: [pic] This is the price of the stock 5 years from now. The PV of this price, discounted back 5 years, is as follows: PV of [pic] = $52. 80/(1. 12)5 = $29. 6. Step 3: The price of the stock today is as follows: [pic]= PV dividends Years 2003-2007 + PV of [pic] = $9. 46 + $29. 96 = $39. 42. This problem could also be solved by substituting the proper values into the following equation: [pic]. Calculator solution: Input 0, 2. 01, 2. 31, 2. 66, 3. 06, 56. 32 (3. 52 + 52. 80) into the cash flow register, input I = 12, PV = ? PV = $39. 43. c. 2003 D1/P0 = $2. 01/$39. 43= 5. 10% Capital gains yield= 6. 90* Expected total return= 12. 00% 2008 D6/P5 = $3. 70/$52. 80= 7. 00% Capital gains yield= 5. 00 Expected total return= 12 . 00% We know that ks is 12 percent, and the dividend yield is 5. 10 percent; therefore, the capital gains yield must be 6. 90 percent. The main points to note here are as follows: 1. The total yield is always 12 percent (except for rounding errors). 2. The capital gains yield starts relatively high, then declines as the supernormal growth period approaches its end. The dividend yield rises. 3. After 12/31/07, the stock will grow at a 5 percent rate. The dividend yield will equal 7 percent, the capital gains yield will equal 5 percent, and the total return will be 12 percent. d.People in high income tax brackets will be more inclined to purchase â€Å"growth† stocks to take the capital gains and thus delay the payment of taxes until a later date. The firm’s stock is â€Å"mature† at the end of 2007. e. Since the firm’s supernormal and normal growth rates are lower, the dividends and, hence, the present value of the stock price will be lower. The total ret urn from the stock will still be 12 percent, but the dividend yield will be larger and the capital gains yield will be smaller than they were with the original growth rates. This result occurs because we assume the same last dividend but a much lower current stock price. . As the required return increases, the price of the stock goes down, but both the capital gains and dividend yields increase initially. Of course, the long-term capital gains yield is still 4 percent, so the long-term dividend yield is 10 percent. 8-23a. Part 1: Graphical representation of the problem: Supernormal Normal growth growth 0 1 2 3 ( | | | | †¢Ã¢â‚¬ ¢Ã¢â‚¬ ¢ | D0 D1 (D2 + [pic]) D3 D( PVD1PVD2 [pic] P0 D1 = D0(1 + gs) = $1. 6(1. 20) = $1. 92. D2 = D0(1 + gs)2 = $1. 60(1. 20)2 = $2. 304. [pic] [pic]= PV(D1) + PV(D2) + PV([pic]) = [pic] = $1. 92/1. 10 + $2. 304/(1. 10)2 + $61. 06/(1. 10)2 = $54. 11. Financial Calculator solution: Input 0, 1. 92, 63. 364(2. 304 + 61. 06) into the cash flow register, in put I = 10, PV = ? PV = $54. 11. Part 2: Expected dividend yield: D1/P0 = $1. 92/$54. 11 = 3. 55%. Capital gains yield: First, find [pic], which equals the sum of the present values of D2 and [pic] discounted for one year. [pic] Financial Calculator solution: Input 0, 63. 364(2. 304 + 61. 6) into the cash flow register, input I = 10, PV = ? PV = $57. 60. Second, find the capital gains yield: [pic] Dividend yield = 3. 55% Capital gains yield = 6. 45 10. 00% = ks. b. Due to the longer period of supernormal growth, the value of the stock will be higher for each year. Although the total return will remain the same, ks = 10%, the distribution between dividend yield and capital gains yield will differ: The dividend yield will start off lower and the capital gains yield will start off higher for the 5-year supernormal growth condition, relative to the 2-year supernormal growth state.The dividend yield will increase and the capital gains yield will decline over the 5-year period until divid end yield = 4% and capital gains yield = 6%. c. Throughout the supernormal growth period, the total yield will be 10 percent, but the dividend yield is relatively low during the early years of the supernormal growth period and the capital gains yield is relatively high. As we near the end of the supernormal growth period, the capital gains yield declines and the dividend yield rises. After the supernormal growth period has ended, the capital gains yield will equal gn = 6%.The total yield must equal ks = 10%, so the dividend yield must equal 10% – 6% = 4%. d. Some investors need cash dividends (retired people), while others would prefer growth. Also, investors must pay taxes each year on the dividends received during the year, while taxes on capital gains can be delayed until the gain is actually realized. 8-24a. ks = kRF + (kM – kRF)b = 11% + (14% – 11%)1. 5 = 15. 5%. [pic] = D1/(ks – g) = $2. 25/(0. 155 – 0. 05) = $21. 43. b. ks = 9% + (12% â€⠀œ 9%)1. 5 = 13. 5%. [pic] = $2. 25/(0. 135 – 0. 05) = $26. 47. c. ks = 9% + (11% – 9%)1. 5 = 12. 0%. [pic] = $2. 25/(0. 12 – 0. 5) = $32. 14. d. New data given: kRF = 9%; kM = 11%; g = 6%, b = 1. 3. ks = kRF + (kM – kRF)b = 9% + (11% – 9%)1. 3 = 11. 6%. [pic] = D1/(ks – g) = $2. 27/(0. 116 – 0. 06) = $40. 54. 8-25a. Old ks = kRF + (kM – kRF)b = 9% + (3%)1. 2 = 12. 6%. New ks = 9% + (3%)0. 9 = 11. 7%. Old price: [pic] New price: [pic] Since the new price is lower than the old price, the expansion in consumer products should be rejected. The decrease in risk is not sufficient to offset the decline in profitability and the reduced growth rate. b. POld = $38. 21. PNew = [pic]. Solving for ks we have the following: $38. 1= [pic] $2. 10= $38. 21(ks) – $1. 9105 $4. 0105= $38. 21(ks) ks= 0. 10496. Solving for b: 10. 496% = 9% + 3%(b) 1. 496% = 3%(b) b = 0. 49865. Check: ks = 9% + (3%)0. 49865 = 10. 496%. [pic] = [pic] = $38. 21 . Therefore, only if management’s analysis concludes that risk can be lowered to b = 0. 49865, or approximately 0. 5, should the new policy be put into effect. SPREADSHEET PROBLEM 8-26The detailed solution for the spreadsheet problem is available both on the instructor’s resource CD-ROM and on the instructor’s side of South-Western’s web site, http://brigham. swlearning. com. INTEGRATED CASEMutual of Chicago Insurance Company Stock Valuation 8-27ROBERT BALIK AND CAROL KIEFER ARE SENIOR VICE-PRESIDENTS OF THE MUTUAL OF CHICAGO INSURANCE COMPANY. THEY ARE CO-DIRECTORS OF THE COMPANY’S PENSION FUND MANAGEMENT DIVISION, WITH BALIK HAVING RESPONSIBILITY FOR FIXED INCOME SECURITIES (PRIMARILY BONDS) AND KIEFER BEING RESPONSIBLE FOR EQUITY INVESTMENTS. A MAJOR NEW CLIENT, THE CALIFORNIA LEAGUE OF CITIES, HAS REQUESTED THAT MUTUAL OF CHICAGO PRESENT AN INVESTMENT SEMINAR TO THE MAYORS OF THE REPRESENTED CITIES, AND BALIK AND KIEFER, WHO WILL MAKE THE ACTUA L PRESENTATION, HAVE ASKED YOU TO HELP THEM.TO ILLUSTRATE THE COMMON STOCK VALUATION PROCESS, BALIK AND KIEFER HAVE ASKED YOU TO ANALYZE THE BON TEMPS COMPANY, AN EMPLOYMENT AGENCY THAT SUPPLIES WORD PROCESSOR OPERATORS AND COMPUTER PROGRAMMERS TO BUSINESSES WITH TEMPORARILY HEAVY WORKLOADS. YOU ARE TO ANSWER THE FOLLOWING QUESTIONS. A. DESCRIBE BRIEFLY THE LEGAL RIGHTS AND PRIVILEGES OF COMMON STOCKHOLDERS. ANSWER:[SHOW S8-1 THROUGH S8-5 HERE. ] THE COMMON STOCKHOLDERS ARE THE OWNERS OF A CORPORATION, AND AS SUCH THEY HAVE CERTAIN RIGHTS AND PRIVILEGES AS DESCRIBED BELOW. 1. OWNERSHIP IMPLIES CONTROL.THUS, A FIRM’S COMMON STOCKHOLDERS HAVE THE RIGHT TO ELECT ITS FIRM’S DIRECTORS, WHO IN TURN ELECT THE OFFICERS WHO MANAGE THE BUSINESS. 2. COMMON STOCKHOLDERS OFTEN HAVE THE RIGHT, CALLED THE PREEMPTIVE RIGHT, TO PURCHASE ANY ADDITIONAL SHARES SOLD BY THE FIRM. IN SOME STATES, THE PREEMPTIVE RIGHT IS AUTOMATICALLY INCLUDED IN EVERY CORPORATE CHARTER; IN OTHERS, IT IS NEC ESSARY TO INSERT IT SPECIFICALLY INTO THE CHARTER. B. 1. WRITE OUT A FORMULA THAT CAN BE USED TO VALUE ANY STOCK, REGARDLESS OF ITS DIVIDEND PATTERN. ANSWER:[SHOW S8-6 HERE. ] THE VALUE OF ANY STOCK IS THE PRESENT VALUE OF ITS EXPECTED DIVIDEND STREAM: [pic] = [pic]HOWEVER, SOME STOCKS HAVE DIVIDEND GROWTH PATTERNS THAT ALLOW THEM TO BE VALUED USING SHORT-CUT FORMULAS. B. 2. WHAT IS A CONSTANT GROWTH STOCK? HOW ARE CONSTANT GROWTH STOCKS VALUED? ANSWER:[SHOW S8-7 AND S8-8 HERE. ] A CONSTANT GROWTH STOCK IS ONE WHOSE DIVIDENDS ARE EXPECTED TO GROW AT A CONSTANT RATE FOREVER. â€Å"CONSTANT GROWTH† MEANS THAT THE BEST ESTIMATE OF THE FUTURE GROWTH RATE IS SOME CONSTANT NUMBER, NOT THAT WE REALLY EXPECT GROWTH TO BE THE SAME EACH AND EVERY YEAR. MANY COMPANIES HAVE DIVIDENDS THAT ARE EXPECTED TO GROW STEADILY INTO THE FORESEEABLE FUTURE, AND SUCH COMPANIES ARE VALUED AS CONSTANT GROWTH STOCKS.FOR A CONSTANT GROWTH STOCK: D1 = D0(1 + g), D2 = D1(1 + g) = D0(1 + g)2, AND SO ON. WI TH THIS REGULAR DIVIDEND PATTERN, THE GENERAL STOCK VALUATION MODEL CAN BE SIMPLIFIED TO THE FOLLOWING VERY IMPORTANT EQUATION: [pic] = [pic] = [pic]. THIS IS THE WELL-KNOWN â€Å"GORDON,† OR â€Å"CONSTANT-GROWTH† MODEL FOR VALUING STOCKS. HERE D1 IS THE NEXT EXPECTED DIVIDEND, WHICH IS ASSUMED TO BE PAID 1 YEAR FROM NOW, kS IS THE REQUIRED RATE OF RETURN ON THE STOCK, AND g IS THE CONSTANT GROWTH RATE. B. 3. WHAT HAPPENS IF A COMPANY HAS A CONSTANT g THAT EXCEEDS ITS ks? WILL MANY STOCKS HAVE EXPECTED g > ks IN THE SHORT RUN (THAT IS, FOR THE NEXT FEW YEARS)?IN THE LONG RUN (THAT IS, FOREVER)? ANSWER:[SHOW S8-9 HERE. ] THE MODEL IS DERIVED MATHEMATICALLY, AND THE DERIVATION REQUIRES THAT ks > g. IF g IS GREATER THAN ks, THE MODEL GIVES A NEGATIVE STOCK PRICE, WHICH IS NONSENSICAL. THE MODEL SIMPLY CANNOT BE USED UNLESS (1) ks > g, (2) g IS EXPECTED TO BE CONSTANT, AND (3) g CAN REASONABLY BE EXPECTED TO CONTINUE INDEFINITELY. STOCKS MAY HAVE PERIODS OF SUPERNORMAL GR OWTH, WHERE gS > ks; HOWEVER, THIS GROWTH RATE CANNOT BE SUSTAINED INDEFINITELY. IN THE LONG-RUN, g < ks. C. ASSUME THAT BON TEMPS HAS A BETA COEFFICIENT OF 1. , THAT THE RISK-FREE RATE (THE YIELD ON T-BONDS) IS 7 PERCENT, AND THAT THE REQUIRED RATE OF RETURN ON THE MARKET IS 12 PERCENT. WHAT IS THE REQUIRED RATE OF RETURN ON THE FIRM’S STOCK? ANSWER:[SHOW S8-10 HERE. ] HERE WE USE THE SML TO CALCULATE BON TEMPS’ REQUIRED RATE OF RETURN: ks= kRF + (kM – kRF)bBon Temps = 7% + (12% – 7%)(1. 2) = 7% + (5%)(1. 2) = 7% + 6% = 13%. D. ASSUME THAT BON TEMPS IS A CONSTANT GROWTH COMPANY WHOSE LAST DIVIDEND (D0, WHICH WAS PAID YESTERDAY) WAS $2. 00 AND WHOSE DIVIDEND IS EXPECTED TO GROW INDEFINITELY AT A 6 PERCENT RATE. 1.WHAT IS THE FIRM’S EXPECTED DIVIDEND STREAM OVER THE NEXT 3 YEARS? ANSWER:[SHOW S8-11 HERE. ] BON TEMPS IS A CONSTANT GROWTH STOCK, AND ITS DIVIDEND IS EXPECTED TO GROW AT A CONSTANT RATE OF 6 PERCENT PER YEAR. EXPRESSED AS A TIME LINE, WE HAVE THE FOLLOWING SETUP. JUST ENTER 2 IN YOUR CALCULATOR; THEN KEEP MULTIPLYING BY 1 + g = 1. 06 TO GET D1, D2, AND D3: 0 1 2 3 | | | | D0 = 2. 00 2. 12 2. 247 2. 382 1. 88 1. 76 1. 65 . . . D. 2. WHAT IS THE FIRM’S CURRENT STOCK PRICE? ANSWER:[SHOW S8-12 HERE. WE COULD EXTEND THE TIME LINE ON OUT FOREVER, FIND THE VALUE OF BON TEMPS’ DIVIDENDS FOR EVERY YEAR ON OUT INTO THE FUTURE, AND THEN THE PV OF EACH DIVIDEND DISCOUNTED AT k = 13%. FOR EXAMPLE, THE PV OF D1 IS $1. 8761; THE PV OF D2 IS $1. 7599; AND SO FORTH. NOTE THAT THE DIVIDEND PAYMENTS INCREASE WITH TIME, BUT AS LONG AS ks > g, THE PRESENT VALUES DECREASE WITH TIME. IF WE EXTENDED THE GRAPH ON OUT FOREVER AND THEN SUMMED THE PVs OF THE DIVIDENDS, WE WOULD HAVE THE VALUE OF THE STOCK. HOWEVER, SINCE THE STOCK IS GROWING AT A CONSTANT RATE, ITS VALUE CAN BE ESTIMATED USING THE CONSTANT GROWTH MODEL: pic] = [pic] = [pic] = [pic] = $30. 29. D. 3. WHAT IS THE STOCK’S EXPECTED VALUE ONE YEAR FROM NOW? ANS WER:[SHOW S8-13 HERE. ] AFTER ONE YEAR, D1 WILL HAVE BEEN PAID, SO THE EXPECTED DIVIDEND STREAM WILL THEN BE D2, D3, D4, AND SO ON. THUS, THE EXPECTED VALUE ONE YEAR FROM NOW IS $32. 10: [pic] = [pic] = [pic] = [pic] = $32. 10. D. 4. WHAT ARE THE EXPECTED DIVIDEND YIELD, THE CAPITAL GAINS YIELD, AND THE TOTAL RETURN DURING THE FIRST YEAR? ANSWER:[SHOW S8-14 HERE. ] THE EXPECTED DIVIDEND YIELD IN ANY YEAR n IS DIVIDEND YIELD = [pic], WHILE THE EXPECTED CAPITAL GAINS YIELD ISCAPITAL GAINS YIELD = [pic] = k – [pic]. THUS, THE DIVIDEND YIELD IN THE FIRST YEAR IS 7 PERCENT, WHILE THE CAPITAL GAINS YIELD IS 6 PERCENT: TOTAL RETURN = 13. 0% DIVIDEND YIELD = $2. 12/$30. 29 = 7. 0% CAPITAL GAINS YIELD = 6. 0% E. NOW ASSUME THAT THE STOCK IS CURRENTLY SELLING AT $30. 29. WHAT IS THE EXPECTED RATE OF RETURN ON THE STOCK? ANSWER:THE CONSTANT GROWTH MODEL CAN BE REARRANGED TO THIS FORM: [pic] = [pic]. HERE THE CURRENT PRICE OF THE STOCK IS KNOWN, AND WE SOLVE FOR THE EXPECTED RETURN. FOR BON TEMPS: pic] = $2. 12/$30. 29 + 0. 060 = 0. 070 + 0. 060 = 13%. F. WHAT WOULD THE STOCK PRICE BE IF ITS DIVIDENDS WERE EXPECTED TO HAVE ZERO GROWTH? ANSWER:[SHOW S8-15 HERE. ] IF BON TEMPS’ DIVIDENDS WERE NOT EXPECTED TO GROW AT ALL, THEN ITS DIVIDEND STREAM WOULD BE A PERPETUITY. PERPETUITIES ARE VALUED AS SHOWN BELOW: 0 1 2 3 | | | | 2. 00 2. 00 2. 00 1. 77 1. 57 1. 39 . . . P0 = 15. 38 P0 = D/kS = $2. 00/0. 13 = $15. 38. NOTE THAT IF A PREFERRED STOCK IS A PERPETUITY, IT MAY BE VALUED WITH THIS FORMULA. G.NOW ASSUME THAT BON TEMPS IS EXPECTED TO EXPERIENCE SUPERNORMAL GROWTH OF 30 PERCENT FOR THE NEXT 3 YEARS, THEN TO RETURN TO ITS LONG-RUN CONSTANT GROWTH RATE OF 6 PERCENT. WHAT IS THE STOCK’S VALUE UNDER THESE CONDITIONS? WHAT IS ITS EXPECTED DIVIDEND YIELD AND CAPITAL GAINS YIELD IN YEAR 1? YEAR 4? ANSWER:[SHOW S8-16 THROUGH S8-18 HERE. ] BON TEMPS IS NO LONGER A CONSTANT GROWTH STOCK, SO THE CONSTANT GROWTH MODEL IS NOT APPLICABLE. NOTE, HOWEVER, THAT THE STO CK IS EXPECTED TO BECOME A CONSTANT GROWTH STOCK IN 3 YEARS. THUS, IT HAS A NONCONSTANT GROWTH PERIOD FOLLOWED BY CONSTANT GROWTH.THE EASIEST WAY TO VALUE SUCH NONCONSTANT GROWTH STOCKS IS TO SET THE SITUATION UP ON A TIME LINE AS SHOWN BELOW: 0 1 2 3 4 | | | | | 2. 600 3. 380 4. 394 4. 65764 2. 301 2. 647 3. 045 46. 114 54. 107 SIMPLY ENTER $2 AND MULTIPLY BY (1. 30) TO GET D1 = $2. 60; MULTIPLY THAT RESULT BY 1. 3 TO GET D2 = $3. 38, AND SO FORTH. THEN RECOGNIZE THAT AFTER YEAR 3, BON TEMPS BECOMES A CONSTANT GROWTH STOCK, AND AT THAT POINT [pic] CAN BE FOUND USING THE CONSTANT GROWTH MODEL. pic] IS THE PRESENT VALUE AS OF t = 3 OF THE DIVIDENDS IN YEAR 4 AND BEYOND AND IS ALSO CALLED THE TERMINAL VALUE. WITH THE CASH FLOWS FOR D1, D2, D3, AND [pic] SHOWN ON THE TIME LINE, WE DISCOUNT EACH VALUE BACK TO YEAR 0, AND THE SUM OF THESE FOUR PVs IS THE VALUE OF THE STOCK TODAY, P0 = $54. 107. THE DIVIDEND YIELD IN YEAR 1 IS 4. 80 PERCENT, AND THE CAPITAL GAINS YIELD IS 8. 2 PERCENT: DI VIDEND YIELD = [pic] = 0. 0480 = 4. 8%. CAPITAL GAINS YIELD = 13. 00% – 4. 8% = 8. 2%. DURING THE NONCONSTANT GROWTH PERIOD, THE DIVIDEND YIELDS AND CAPITAL GAINS YIELDS ARE NOT CONSTANT, AND THE CAPITAL GAINS YIELD DOES NOT EQUAL g.HOWEVER, AFTER YEAR 3, THE STOCK BECOMES A CONSTANT GROWTH STOCK, WITH g = CAPITAL GAINS YIELD = 6. 0% AND DIVIDEND YIELD = 13. 0% – 6. 0% = 7. 0%. H. SUPPOSE BON TEMPS IS EXPECTED TO EXPERIENCE ZERO GROWTH DURING THE FIRST 3 YEARS AND THEN TO RESUME ITS STEADY-STATE GROWTH OF 6 PERCENT IN THE FOURTH YEAR. WHAT IS THE STOCK’S VALUE NOW? WHAT IS ITS EXPECTED DIVIDEND YIELD AND ITS CAPITAL GAINS YIELD IN YEAR 1? YEAR 4? ANSWER:[SHOW S8-19 AND S8-20 HERE. ] NOW WE HAVE THIS SITUATION: 0 1 2 3 4 | | | | | 2. 00 2. 0 2. 00 2. 00 2. 12 1. 77 1. 57 1. 39 20. 99 25. 72 = [pic] DURING YEAR 1: DIVIDEND YIELD = [pic] = 0. 0778 = 7. 78%. CAPITAL GAINS YIELD = 13. 00% – 7. 78% = 5. 22%. AGAIN, IN YEAR 4 BON TEMPS BECOMES A CONSTANT GROWTH STOCK; HENCE g = CAPITAL GAINS YIELD = 6. 0% AND DIVIDEND YIELD = 7. 0%. I. FINALLY, ASSUME THAT BON TEMPS’ EARNINGS AND DIVIDENDS ARE EXPECTED TO DECLINE BY A CONSTANT 6 PERCENT PER YEAR, THAT IS, g = -6%. WHY WOULD ANYONE BE WILLING TO BUY SUCH A STOCK, AND AT WHAT PRICE SHOULD IT SELL? WHAT WOULD BE THE DIVIDEND YIELD AND CAPITAL GAINS YIELD IN EACH YEAR?ANSWER:[SHOW S8-21 AND S8-22 HERE. ] THE COMPANY IS EARNING SOMETHING AND PAYING SOME DIVIDENDS, SO IT CLEARLY HAS A VALUE GREATER THAN ZERO. THAT VALUE CAN BE FOUND WITH THE CONSTANT GROWTH FORMULA, BUT WHERE g IS NEGATIVE: [pic] = [pic] = [pic] = [pic] = [pic] = $9. 89. SINCE IT IS A CONSTANT GROWTH STOCK: g = CAPITAL GAINS YIELD = -6. 0%, HENCE: DIVIDEND YIELD = 13. 0% – (-6. 0%) = 19. 0%. AS A CHECK: DIVIDEND YIELD = [pic] = 0. 190 = 19. 0%. THE DIVIDEND AND CAPITAL GAINS YIELDS ARE CONSTANT OVER TIME, BUT A HIGH (19. 0 PERCENT) DIVIDEND YIELD IS NEEDED TO OFFSET THE NEGATIVE CAPITAL GAINS YIELD.J. BON TEMPS EMB ARKS ON AN AGGRESSIVE EXPANSION THAT REQUIRES ADDITIONAL CAPITAL. MANAGEMENT DECIDES TO FINANCE THE EXPANSION BY BORROWING $40 MILLION AND BY HALTING DIVIDEND PAYMENTS TO INCREASE RETAINED EARNINGS. THE PROJECTED FREE CASH FLOWS FOR THE NEXT THREE YEARS ARE -$5 MILLION, $10 MILLION, AND $20 MILLION. AFTER THE THIRD YEAR, FREE CASH FLOW IS PROJECTED TO GROW AT A CONSTANT 6 PERCENT. THE OVERALL COST OF CAPITAL IS 10 PERCENT. WHAT IS BON TEMPS’ TOTAL VALUE? IF IT HAS 10 MILLION SHARES OF STOCK AND $40 MILLION TOTAL DEBT, WHAT IS THE PRICE PER SHARE? ANSWER:[SHOW S8-23 THROUGH S8-28 HERE. 0 1 2 3 4 | | | | | -5 10 20 21. 20 $ -4. 545 8. 264 15. 026 398. 197 $416. 942 = TOTAL VALUE VALUE OF EQUITY = TOTAL VALUE – DEBT = $416. 94 – $40 = $376. 94 MILLION. PRICE PER SHARE = $376. 94/10 = $37. 69. K. WHAT DOES MARKET EQUILIBRIUM MEAN? ANSWER:[SHOW S8-29 AND S8-30 HERE. ] EQUILIBRIUM MEANS STABLE, NO TENDENCY TO CHANGE. MARKET EQUILIBRIUM MEANS THAT PRICES ARE STABLEâ₠¬â€œAT ITS CURRENT PRICE, THERE IS NO GENERAL TENDENCY FOR PEOPLE TO WANT TO BUY OR TO SELL A SECURITY THAT IS IN EQUILIBRIUM.ALSO, WHEN EQUILIBRIUM EXISTS, THE EXPECTED RATE OF RETURN WILL BE EQUAL TO THE REQUIRED RATE OF RETURN: [pic] = D1/P0 + g = k = kRF + (kM – kRF)b. L. IF EQUILIBRIUM DOES NOT EXIST, HOW WILL IT BE ESTABLISHED? ANSWER:[SHOW S8-31 AND S8-32 HERE. ] SECURITIES WILL BE BOUGHT AND SOLD UNTIL THE EQUILIBRIUM PRICE IS ESTABLISHED. M. WHAT IS THE EFFICIENT MARKETS HYPOTHESIS, WHAT ARE ITS THREE FORMS, AND WHAT ARE ITS IMPLICATIONS? ANSWER:[SHOW S8-33 THROUGH S8-37 HERE. ] THE EMH IN GENERAL IS THE HYPOTHESIS THAT SECURITIES ARE NORMALLY IN EQUILIBRIUM AND ARE â€Å"PRICED FAIRLY,† MAKING IT IMPOSSIBLE TO â€Å"BEAT THE MARKET. WEAK-FORM EFFICIENCY SAYS THAT INVESTORS CANNOT PROFIT FROM LOOKING AT PAST MOVEMENTS IN STOCK PRICES–THE FACT THAT STOCKS WENT DOWN FOR THE LAST FEW DAYS IS NO REASON TO THINK THAT THEY WILL GO UP (OR DOWN) IN THE FUTURE. THIS FORM HAS BEEN PROVEN PRETTY WELL BY EMPIRICAL TESTS, EVEN THOUGH PEOPLE STILL EMPLOY â€Å"TECHNICAL ANALYSIS. † SEMISTRONG-FORM EFFICIENCY SAYS THAT ALL PUBLICLY AVAILABLE INFORMATION IS REFLECTED IN STOCK PRICES, HENCE THAT IT WON’T DO MUCH GOOD TO PORE OVER ANNUAL REPORTS TRYING TO FIND UNDERVALUED STOCKS.THIS ONE IS (WE THINK) LARGELY TRUE, BUT SUPERIOR ANALYSTS CAN STILL OBTAIN AND PROCESS NEW INFORMATION FAST ENOUGH TO GAIN A SMALL ADVANTAGE. STRONG-FORM EFFICIENCY SAYS THAT ALL INFORMATION, EVEN INSIDE INFORMATION, IS EMBEDDED IN STOCK PRICES. THIS FORM DOES NOT HOLD–INSIDERS KNOW MORE, AND COULD TAKE ADVANTAGE OF THAT INFORMATION TO MAKE ABNORMAL PROFITS IN THE MARKETS. TRADING ON THE BASIS OF INSIDER INFORMATION IS ILLEGAL. N. PHYFE COMPANY RECENTLY ISSUED PREFERRED STOCK. IT PAYS AN ANNUAL DIVIDEND OF $5, AND THE ISSUE PRICE WAS $50 PER SHARE. WHAT IS THE EXPECTED RETURN TO AN INVESTOR ON THIS PREFERRED STOCK?ANSWER:[SHOW S8-38 AND S8-39 HERE. ] [pic]= [pic] = [pic] = 10%. ———————– ks = 15% gn = 6% ( 1/(1. 15)3 ( 1/(1. 13)3 ( 1/(1. 13)2 ( 1/1. 13 gs = 50% gn = 8% [pic] ks = 12% gs = 15% gn = 5% WACC = 10% [pic] = 30. 29 = [pic] g = 0% g = 0% g = 0% gn = 6% ks = 13% [pic] = $66. 54 = [pic] gs = 30% gs = 30% gs = 30% gn = 6% ks = 13% g = 0% ks = 13% g = 6% ks = 13% ks = 10% gs = 20% gs = 20% gn = 5% WACC = 12% WACC = 12% gn = 7% [pic] WACC = 13% gn = 7% 530 = [pic] ( 1/(1. 15)4 ( 1/(1. 15)5 ks = 12% ( 1/1. 13 ( 1/(1. 13)2 ( 1/(1. 13)3 ( 1/(1. 13)2 ( 1/(1. 13)2 ( 1/1. 13 ( 1/(1. 13)2 ( 1/(1. 13)3 ( 1/(1. 13)3 ( 1/1. 13 ( 1/1. 13 (%89

Odysseus As The Epic Hero Essays - Odyssey, Odysseus, Calypso

Odysseus As The Epic Hero Essays - Odyssey, Odysseus, Calypso Odysseus As The Epic Hero Odysseus's Journey to Becoming The Epic Hero Outline I. Introduction - In Homer's The Odyssey the tale of a man's journey back home after long years at war is also the tale of a man's spiritual journey through his own soul. II. The beginning - Odysseus leaves Troy feeling almost immortal and this pride is what leads to his downfall and second rise. III. The middle - Odysseus undergoes his symbolic death and rebirth. IV. The end - Odysseus has regained power over his household and has restored order to his life. V. Conclusion In Homer's The Odyssey, the tale of a man's journey home after long years at war, is also the tale of a man's spiritual journey through his own soul. Odysseus' role as an epic hero is modified throughout the epic poem. As Odysseus leaves Troy for home, he is the typical bloodthirsty warrior. During the course of his trek, he undergoes a symbolic death and rebirth. Upon his arrival in Ithaka, the wiser man he has become is evident. The Odyssey is Odysseus' story of his journey not only from Troy to Ithaka, but also from bloodthirsty warrior to epic hero. Odysseus begins the tale of his trip from Troy to Phaiakia in Book IX. The beginning of his tale displays the bloodthirsty warrior that left Troy. What of those years of rough adventure, weathered under Zeus? The wind that carried west from Ilion Brought me to Ismaros, on the far shore, A strongpoint on the coast of Kikones. I stormed that place and killed the men who fought. The first lines of Odysseus' story display his warrior side. This passage shows how he and his crew landed and immediately went to battle and plundered. Although Odysseus recalls telling his men to stop afterwards and return to the ship, he never really forcibly tried to make the men return. The lack of effort on Odysseus' part implies that he did not truly care if the men ransacked Ilion. Due to this greed and bloodlust, nearly a third of each ship's crew was lost. This bloodthirsty warrior cared only for battle and blood, instead of his men and his return home. After stopping on the island of Aiaia, the home of Kirke, Odysseus journeys to Hades. This represents a symbolic death for Odysseus. There he must speak with Teirasias to hear the prophet's visions for Odysseus's journey home. Teirasias predicts that the journey can take two paths; either a peaceful journey home, or if the crew and Odysseus can not restrain their desires, death and destruction will befall the crew. Odysseus and his crew do not heed Teirasias's warning, and the entire crew save Odysseus is lost at sea. After nine years on Kalypso's island Odysseus finally continues his journey home. The strong god glittering left her as he spoke, And now her ladyship, having given heed To Zeus's mandate, went to find Odysseus In his stone seat to seaward-tear on tear Brimming his eyes. The sweet days of his life time Were running out in anguish over his exile, For long ago the nymph had ceased to please. Though he fought shy of her and her desire, He lay with her each night, for she compelled him. But when day came he sat on the rocky shore And broke his own heart groaning, with his eyes wet Scanning the bare horizon of the sea. Odysseus had begun to lose hope of ever getting home. Kalypso grudgingly gives in to Zeus' order and aids Odysseus in obtaining wood for a ship. After nineteen days at sea, he is battered in a vicious storm and washes up half-unconscious, bloody, and naked in Phaiakia. This episode represents a symbolic rebirth for Odysseus. His time of incubation on Kalypso's isle is over and he emerges naked and bloody - like the day he was born. Once he has landed on Phaiakia, Odysseus realizes that he can not continue on as a bloodthirsty warrior, but rather must heed the wisdom passed on to him by those he met in Hades and change his outlook. It is at this point that Odysseus begins to fully comprehend the effects his actions have on those around him, as well as on his future. Only now is he truly ready for his tumultuous return to Ithaka. By the time

Free Essays on Representations Of Race And Ethnicity In Film

Introduction The issue of representing race and ethnicity is a controversial one. While ethnicity and race are related concepts, the concept of ethnicity is rooted in the idea of societal groups, marked especially by shared nationality, tribal afilliation, religious faith, shared language, or cultural or traditional origins and backgrounds. Whereas race is rooted in the idea of biological classification of homo sapiens to subspecies according to morphological features such as skin color or facial characteristics. "Ethnicity" is sometimes used as a euphemism for "race". It is a term also used to justify real or imagined historic ties as well. Ethnicity goes far beyond the modern ties of a person to a particular nation (e.g., citizenship), and focuses more upon the connection to a perceived shared past and culture . Many representations of race and ethnicity are created and shaped by popular culture and media. In the film ‘Black Rain’, the concepts of race and ethnicity are represented to show the conflict between two races; namely the Mongoloid race and the Caucasian race. This paper will aim to criticize these representations in light of related readings in order to question these representations. I will start by examining the representations for the Mongoloid race, followed by the Caucasian race. Due to the length limit of this paper, only the most important points will be discussed and even so, in summary. Inferior Mongoloid Race In the film ‘Black Rain’ the Mongoloid race is represented and portrayed as inferior to the Caucasian race. The film is in fact a result of Orientalism; orientalism being the corporate institution for dealing with the Orient (Mongoloid race) – dealing with it by making statements about it, authorizing views of it, describing it, by teaching it, settling it, ruling over it: in short, Orientalism as a Western (Caucasian) style for dominating, restructuring, and having authority over the Or... Free Essays on Representations Of Race And Ethnicity In Film Free Essays on Representations Of Race And Ethnicity In Film Introduction The issue of representing race and ethnicity is a controversial one. While ethnicity and race are related concepts, the concept of ethnicity is rooted in the idea of societal groups, marked especially by shared nationality, tribal afilliation, religious faith, shared language, or cultural or traditional origins and backgrounds. Whereas race is rooted in the idea of biological classification of homo sapiens to subspecies according to morphological features such as skin color or facial characteristics. "Ethnicity" is sometimes used as a euphemism for "race". It is a term also used to justify real or imagined historic ties as well. Ethnicity goes far beyond the modern ties of a person to a particular nation (e.g., citizenship), and focuses more upon the connection to a perceived shared past and culture . Many representations of race and ethnicity are created and shaped by popular culture and media. In the film ‘Black Rain’, the concepts of race and ethnicity are represented to show the conflict between two races; namely the Mongoloid race and the Caucasian race. This paper will aim to criticize these representations in light of related readings in order to question these representations. I will start by examining the representations for the Mongoloid race, followed by the Caucasian race. Due to the length limit of this paper, only the most important points will be discussed and even so, in summary. Inferior Mongoloid Race In the film ‘Black Rain’ the Mongoloid race is represented and portrayed as inferior to the Caucasian race. The film is in fact a result of Orientalism; orientalism being the corporate institution for dealing with the Orient (Mongoloid race) – dealing with it by making statements about it, authorizing views of it, describing it, by teaching it, settling it, ruling over it: in short, Orientalism as a Western (Caucasian) style for dominating, restructuring, and having authority over the Or...

The Diet of Worms 1521, Luther and the Emperor

The Diet of Worms 1521, Luther and the Emperor When Martin Luther fell into disagreement with the Catholic hierarchy in 1517, he wasn’t simply arrested and carted to a stake (as some views of the medieval period might make you believe). There was plenty of theological discussion which soon turned into temporal, political and cultural considerations. One key part of this disagreement, which would become the Reformation and see the western church permanently split, came at the Diet of Worms in 1521. Here, an argument over theology (which still could have resulted in someone’s death), was fully turned into a secular conflict over laws, rights and political power, a vast pan-European milestone in how government and society worked, as well as how the church prayed and worshipped. What’s a Diet? Diet is a Latin term, and you might be more familiar with a different language: Reichstag. The Diet of the Holy Roman Empire was a legislature, a proto-parliament, which had limited powers but which met frequently and did affect law in the empire. When we refer to the Diet of Worms, we don’t mean a Diet that met uniquely in the city of Worms in 1521, but a system of government which was established and which, in 1521, turned its eye to the conflict Luther had begun. Luther Lights the Fire In 1517 many people were unhappy with the way the Latin Christian Church was run in Europe, and one of those was a lecturer and theologian called Martin Luther. Whereas other opponents of the church had made grand claims and rebellions, in 1517 Luther drew up a list of points for discussion, his 95 Theses, and sent them to friends and key figures. Luther wasn’t trying to break the church or start a war, which was what would happen. He was reacting to Dominican friar called Johann Tetzel selling indulgences, meaning someone could pay to have their sins forgiven. The key figures Luther sent his theses too included the Archbishop of Mainz, who Luther asked to stop Tetzel. He might also have nailed them up in public.Luther wanted an academic discussion and he wanted Tetzel stopped. What he got was a revolution. The theses proved popular enough for them to be spread around Germany and beyond by interested and / or angered thinkers, some of whom supported Luther and convinced him to write more in support of them. Some were unhappy, like Archbishop Albert of Mainz, who asked if the papacy would decide if Luther was in the wrong†¦The war of words began, and Luther battled by developing his ideas into a brave new theology at odds with the past, what would be Protestantism. Luther is Defended by Secular Power By mid 1518 the Papacy had summoned Luther to Rome to question him, and probably punish him, and this is where things began to get complex. Elector Frederick III of Saxony, a man who helped choose the Holy Roman Emperor and a figure of great power, felt he had to defend Luther, not because of any agreement with the theology, but because he was a prince, Luther was his subject, and the Pope was claiming clashing powers. Frederick arranged for Luther to avoid Rome, and instead go to the Diet meeting in Augsburg. The papacy, not normally one to concede to secular figures, needed Frederick’s support in picking the next emperor and in helping a military expedition against the Ottomans, and agreed. At Augsburg, Luther was interrogated by Cardinal Cajetan, a Dominican and a clever and well-read supporter of the church.   Luther and Cajetan argued, and after three days Cajetan issued an ultimatum; Luther returned quickly to his home of Wittenberg, because Cajetan had been sent by th e Pope with orders to arrest the trouble maker if necessary. The Papacy weren’t giving an inch, and in November 1518 issued a bull clarifying the rules on indulgences and saying Luther was wrong. Luther agreed to stop it. Luther is Pulled Back The debate was about far more than Luther now, and theologians carried on his arguments, until Luther just had to return and he ended up taking part in a public debate in June 1519 with Andreas Carlstadt against Johann Eck. Driven by Eck’s conclusions, and after several committees analysing Luther’s writings, the Papacy decided to declare Luther heretical and excommunicate him over 41 sentences. Luther has sixty days to recant; instead he wrote more and burned the bull.Normally the secular authorities would arrest and execute Luther. But the timing was perfect for something else to happen, as the new Emperor, Charles V, had pledged all his subjects should have proper legal hearings, while the papal documents were far from ordered and water tight, including blaming Luther for someone else’s writing. 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Germany itself would divide into Lutheran and Catholic provinces, and later in the history of the Reformation Germany would be torn apart by the multi-faceted Thirty Years War, where secular issues would be no less important in complicating what was happening. In one sense Wor ms was a failure, as the Edict failed to stop the church dividing, in others it was a great success that has been said to have led to the modern world.

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Unit Contribution Margin - Essay Example At break-even point, the Cost-Volume-Profit analysis equation is reduced to: PX = xv + FC Where p is the price per unit, x is the number of units, v is the variable cost per unit, and total fixed cost is FC. Solving the equation for Break-even sales units Break-even Sales Units = x = FC à · ( p − v ) Since unit contribution margin (Unit CM) is equal to unit sale price (p) less unit variable cost (v) thus, Unit CM = p − v Hence, Break-even Sales Units = x = FC à · Unit CM Break-even Sales Dollars = Price per Unit Ãâ€" Break-even Sales Units ; or What is contribution margin ratio and when is it most useful? The contribution margin ratio is the measure of sales, facility returns or selling price that residues after all variable costs and variable costs have been enclosed. Contribution margin ratio= (Sales-variables) / sales Contribution margin ratio plays a key role in; †¢ Determining the profits that will rise from several sales levels †¢ Assessing the influenc e on earnings of changes in sales. In particular, it can be used to estimation the decline in profits if sales drop, and so is an standard tool in the making of budgets. How is the breakeven equation modified to take into account the sales required to earn a target profit?

Fresh water of the Continents Essay Example | Topics and Well Written Essays - 750 words

Fresh water of the Continents - Essay Example The rest of water of Earth constitutes the Earth’s fresh water resource (Strahler & Zeeya ch. 11). Typically, fresh water is described as water with a salinity of less than 1% that of oceans. Water with salinity within this level is typically denoted as marginal water because it is a fringe for many uses by living things. The ratio of fresh water to salt water on Earth is approximately 1 to 40. As said, only a small portion of Earth water exists as fresh water (about 2.5%), and even a lesser fraction is available to mankind. Of this percentage, almost three quarters is frozen, and most of the rest is available as soil moisture or located deep in the surface. In the present world, the major sources of fresh water that is accessible to mankind reside in shallow groundwater aquifers, lakes, wetlands, and rivers, all of which constitute to a small fraction of (equivalent to tenths of 1%) of the total volume of Earth’s water. This volume of water is regularly recycled throug h rainfall and snowfall, thus available on a sustainable basis (Strahler & Zeeya ch. 11). However, global averages fail to demonstrate a complete image of the world’s water base. ... Some zone of the world portrays the wide range of sustainable water resources, which varies from significantly zero in many arid and semi-arid regions to thousands of cubic kilometers per annual as chief river corridor flow. Such zonal dissimilarities in the quantity of available fresh water postulate the diverse patterns of water resources across the world (Strahler & Zeeya ch. 11). Fresh water supply is habituated by several additional impacts, which intensify the patterns of abundance and scarcity. These impacts involve the distribution of mankind relative to the supply of water, availability of water engineering to stabilize flows, patterns of demand, water quality, and interannual climate variations and seasonal. These factors are discussed in detail in the following paragraphs. Water scarcity is the foremost factor to be considered when establishing the availability of fresh water on the earth. The research has far shown a growing dependence of mankind society on available fres hwater resources. To assess these provisioning services more deeply, the supply of recycled water must be put into context of interactions with individuals and their use of water (Strahler & Zeeya ch. 11). Approximately one-third of the planet population resides in nations suffering from moderate to high water stress. In such countries, water consumption is more than ten 10% of recyclable water resources. There are three main factors causing increasing water demand, which involves industrial development, population growth, and agricultural. Agriculture has accounted for most fresh water extractions in developing economies in the past two decades. Researchers have often assumed that growing demand of

Free Will and Fate in Sartres No Exit and Sophocles' Oedipus Tyrannus Essay

Free Will and Fate in Sartres No Exit and Sophocles' Oedipus Tyrannus - Essay Example Although they conceded that man had the power to choose and make decisions for himself, they felt that these decisions inevitably ended up playing into the hands of fate. This can be seen clearly in Oedipus Tyrannus. Oedipus learns from the Oracle that it is his fate to murder his biological father and sleep with own mother. Upon learning of his fate, Oedipus flees from the land of his youth in an attempt to escape his fate. After he becomes king, Oedipus seeks to learn the truth behind the murder of his father which caused the land of Thebes to be cursed. He summons the blind prophet Teiresias who hints at the truth which eerily echoes the oracle's prediction: Even though Oedipus tried to escape his fate by attempting to flee, his destiny overrides his free will as he ignorantly winds up fulfilling the oracle's prophecies of patricide and incest. In this play, fate is seen as the master of man's destiny and it shows how man is virtually helpless when it comes to living out his preordained destiny. By contrast, Jean Paul Sartre's No Exit has the major underlying theme of existentialism; that is that man and man alone controls his destiny. Existentialism is the belief that there is no God or fate and therefore man is in charge of his own destiny. Basically, the past is past and has no bearing on today, what is here and now is the reality. Man has the free will to choose to be free or he can be imprisoned by letting other people choose his destiny for him. Also by allowing himself to become imprisoned by the past, man is condemning himself to a life that can't be lived. Of the three main characters in No Exit, two are doomed to an eternity in Hell because of their failure to take responsibility for their actions which got them there in the first place. Besides blaming others for her problems, Estelle even blames her death on fate, "then two years ago I met the man I was fated to love. We knew it the moment we set eyes on each other. He asked me to run away with him, and I refused. Then I got pneumonia and it finished me." Estelle is saying that because she denied her destiny, her punishment was death. In life and in death, Estelle allows others to create her self image rather than take responsibility for her own life, this can be seen when she asks the others repeatedly how she looks and through the use of Inez as her mirror, she shows how she is still letting other people determine who she is. Estelle and Garcin both refuse to give up the past, as they go over and over the events that brought them to Hell. Their inability to live in the present, in effect condemns them to Hell. In Hell as on earth, Garcin continues to leave his existence in the hands of other people. Garcin let other people decide who he was on earth, at one point even declaring, "I've left my fate in their hands." In Hell, he allows Estelle to determine who he really is by allowing her to define if he is a coward. Garcin's inability to leave Hell even when the door is open shows how he lets his fear of being responsible limit his choices and eventually condemns himself.

Fresh water of the Continents Essay Example | Topics and Well Written Essays - 750 words

Fresh water of the Continents - Essay Example The rest of water of Earth constitutes the Earth’s fresh water resource (Strahler & Zeeya ch. 11). Typically, fresh water is described as water with a salinity of less than 1% that of oceans. Water with salinity within this level is typically denoted as marginal water because it is a fringe for many uses by living things. The ratio of fresh water to salt water on Earth is approximately 1 to 40. As said, only a small portion of Earth water exists as fresh water (about 2.5%), and even a lesser fraction is available to mankind. Of this percentage, almost three quarters is frozen, and most of the rest is available as soil moisture or located deep in the surface. In the present world, the major sources of fresh water that is accessible to mankind reside in shallow groundwater aquifers, lakes, wetlands, and rivers, all of which constitute to a small fraction of (equivalent to tenths of 1%) of the total volume of Earth’s water. This volume of water is regularly recycled throug h rainfall and snowfall, thus available on a sustainable basis (Strahler & Zeeya ch. 11). However, global averages fail to demonstrate a complete image of the world’s water base. ... Some zone of the world portrays the wide range of sustainable water resources, which varies from significantly zero in many arid and semi-arid regions to thousands of cubic kilometers per annual as chief river corridor flow. Such zonal dissimilarities in the quantity of available fresh water postulate the diverse patterns of water resources across the world (Strahler & Zeeya ch. 11). Fresh water supply is habituated by several additional impacts, which intensify the patterns of abundance and scarcity. These impacts involve the distribution of mankind relative to the supply of water, availability of water engineering to stabilize flows, patterns of demand, water quality, and interannual climate variations and seasonal. These factors are discussed in detail in the following paragraphs. Water scarcity is the foremost factor to be considered when establishing the availability of fresh water on the earth. The research has far shown a growing dependence of mankind society on available fres hwater resources. To assess these provisioning services more deeply, the supply of recycled water must be put into context of interactions with individuals and their use of water (Strahler & Zeeya ch. 11). Approximately one-third of the planet population resides in nations suffering from moderate to high water stress. In such countries, water consumption is more than ten 10% of recyclable water resources. There are three main factors causing increasing water demand, which involves industrial development, population growth, and agricultural. Agriculture has accounted for most fresh water extractions in developing economies in the past two decades. Researchers have often assumed that growing demand of

Direct marketing. An advertising campaign Essay

Direct marketing. An advertising campaign - Essay Example Direct marketing is perceived by many customers as an undesirable way of marketing products. Direct marketing includes techniques such as telephone sales and unsolicited emails. When companies rely on these techniques their credibility as a firm is downgraded. There are other forms of legit direct marketing techniques that have been used by marketers for years to generate revenues. Some of these good direct marketing techniques include catalogs, leaflets, brochures, and coupons. A company that has been very successful globally using a direct marketing approach to sell its products is Amway. Interactive marketing involves having contact with the customer in order to obtain a reaction and feedback from them. The tool that is utilized the most in the 21st century in the application of interactive marketing is the internet. Social websites such as Facebook provide great interactive mechanisms that can be used by marketers to communicate with the customers. A website that revolutionized t he way people watch programming is Hulu.com. Hulu offers television programs in its website free of charge. The programming has very short commercial breaks. During these commercials many advertisers used interactive marketing by providing short one question questionnaires. 7. Samir - participation I like your response but you failed to mention a direct marketing method that is often by companies which is direct telephone sales calls. This method of marketing is very outdated and his perceived in a negative connotation by the customers of today. Nobody likes being pressure into buying a consumer product they don’t want or need. I think that the government should regulate telemarketers to avoid the invasion of privacy these sales phone calls represent. Most of these companies are obtaining their sales leads number using unethical practices. I think that interactive marketing has a lot of potential for companies doing business the US marketplace as well as abroad. 8. Kelly â₠¬â€œ participation Convenience is one of the attributes customers look for the most in their shopping experience. A company that has revolutionized the supermarket industries is Sainsbury’s. This UK firm has a service that allows shoppers to purchase their groceries through the website. The online order is subsequently delivered to the person’s home. This service saves shoppers a lot of time and it saves them money in commuting expenses. At $4 a gallon customers have to save gasoline any way they can. Other companies such as Walgreens are achieving interactive marketing by offering special offers that can only be redeemed online. For example when the customer completes an online survey at the corporate website they are eligible for coupon savings. DQ1 An advertising campaign that was very successful due to its ingenuity, creativity, and ability to captivate the minds of the viewers was the Geico ads. Geico has been running a series of ads using the Gecko character in o rder to transmit a Geico’s slogan, â€Å"15 minutes could save you 15% or more on car insurance.† The ads are very funny due to the Gecko character. The Gecko has become such a sensation that Geico created an autobiography online video story of the Gecko on its corporate website. This is all great stuff. I believe that this character is the reason Geico has become such a successful auto insurance company. Prior to the start of the Gecko series of commercials Geico was not a household name in the minds of American consumers. An ad campaign that lacks a marketing message due to its simplicity is Corona’s beer advertisements. These commercials consist of a man and woman in the beach in lawn chair, the actors done move while stuff occurs around them at the admiration of the Corona beer. The commercial are poor because they do not send a clear marketing message and they are not emphasizing any of the attributes of the product such as quality, flavor, and price. The c ommercial seem like a low budget project in comparison with the spectacular commercials its competitor

Food Traceability And Safety Business Essay

Food Traceability And Safety Business Essay Food traceability and safety is an up and coming trend. With the slow food, organic, and natural movements more consumers are wanting to know where their food is coming from. Food producers also are making food traceability a trend because each producer wants to know who they can point fingers at when a customer claims that they have become sick from a producers food. For most producers, traceability is just one element of any supply-management or quality/safety control system. Tracking an apple from the tree to your mouth is something that each producer needs to know. They need to know where that apple was to make sure that the apple did not go anywhere it shouldnt have been. So, what exactly is traceability? How does it work, and what can it accomplish with regards to safety? Most important, does the U.S. food supply have enough traceability and therefore, safety? What is traceability and how does it pertain to our food system? The International Organization for Standardization (ISO) defines traceability as the ability to trace the history, application, or location of that which is under consideration (CITE). For this paper, that which is under consideration will be food. The ISO uses a very broad definition for traceability which is necessary for several reasons. First, because food is a complex system and traceability has not been developed for every product. Second, because no traceability system is ever complete. Things change, the purveyor changes, the field changes, the picker changes so each companys food traceability plan must be fluid. For instance, Even a hypothetical system for tracking beef-in which consumers scan their packet of beef at the checkout counter and access the animals date and location of birth, lineage, vaccination records, and use of mammalian protein supplements-is incomplete. This system does not provide traceability with respect to bacterial control in the barn, use of genetically engineered feed or animal welfare attributes like hours at pasture and play time (CITE). Finally, the definition must stay broad because new products are constantly being developed. Each company will have their own definition of food traceabilit y because each company must determine the necessary breadth, depth, and precision of their traceability systems depending on characteristics of their production process and their traceability objectives. (CITE) Food traceability needs to be a fluid system in order to compensate for the constant changes in the food systems. Money has been invested into the food traceability industry since companies first started to realize that food traceability was important in the late nineties. Industry analysts calculate that during 2000, American companies spent $1.6 trillion on supply-related activities, including the movement, storage, and control of products across the supply chain (CITE). However, spending money on food traceability will probably have a return on investment, and often is the difference between a successful company and an unsuccessful one. Food traceability is becoming an important area of concentration for companies. When margins are thin, as they are in the food industry, knowing where your product comes from and the possibility of avoiding a consumer lawsuit in some cases justifies the expense. This means that if a company invests one million dollars into creating a food traceability system, they will probably save more money from avoided lawsuits in the end run. This is not only true for ver y high risk foods but also true of any food product that is at risk. The government is also aware that food traceability is an issue that is going to have to be looked at. There was an increase in the FDA budget in 2009 of $275 million. This increase brings the total budget for the FDA in 2009 to $406.3 million, a 17.9% increase over fiscal year 2008. A large portion of this increase ($125 million) will be used for food safety and will allow FDA to intensify actions to implement the Food Protection Plan (CITE). Many industry analysts believe that every company that deals with food and the supply chain will have to eventually embrace food traceability, if they do not, the consequence may be their business. The facts are uncompromising and pressure continues to mount from consumers, the media, retailers and numerous government regulatory agencies (CITE). With the government endorsing food traceability systems, most companies are realizing that food traceability is important. However, most companies do not know where to start to build a food traceability system. How does a company trace food? Often electronic coding systems are used to help trace food. In some cases the buyer manages the food traceability system; in other cases supply companies manage the system. Retailers such as Wal-Mart have created proprietary supply-chain information systems, which they require their suppliers to adopt (CITE). Companies start with a primary producer, which include the farmer and grower, then the processor, which include the packer, re-packer, processor and, if applicable, the manufacturer. Then the product moves to distribution possibly including the wholesaler or the distributor,a retail store or foodservice operator. For examplie, if you own a small restaurant and need to trace an apple used for apple pie. First, you have the farmer who takes care of the apple trees. The farmer will need to record who came into contact with the tree, and what supplies or chemicals came into contact with the tree. Then the apple will be picked. The farmer will need to record the person who picked the apple. Next, the apple is shipped to the processor who packs the apples. The processor must record everyone who came into contact with the apple or the boxes that the apple is packed in. Next, the apple goes to the distributor. The same thing happens at the distributor, everyone who comes into contact with the apple or anything that comes into contact with the apple is recorded. When you, the purchaser for the small business, order the apple you need to know that the supplier knows where the apple came from so that if one of your customers gets sick because of the apple you can tell the supplier and the supplier can s top all distribution of that apple. Suppliers are adapting to the changing food traceability systems. For instance the ratio of private inventories to final sales of domestic business has fallen by half since the end of WWII. This downward trend reflects growing efficiencies in supply management in the U.S. food industry, including traceability systems. This trend is expected to continue as food manufacturers continue to adopt technologies already in use in other industries (CITE AND EDIT). This is because as a small business owner, you want to rely on a supplier to trace your food rather than your company tracing the food. Also, larger companies, consumers and retailers all realize the need for food traceability so they in turn buy from companies with food traceability-like the apple example, the company needs to know where the apple or product originated and where it has been. Companies have a few objectives when using food traceability systems. First, improve supply management. Supply management improves because when you are using food traceability you will know where a single product is in your supply line. Second, facilitate trace back for food safety and quality. This means that if a consumer becomes sick from a product that came from a producer; the producer can trace the product to make sure no other contaminated products go out and the contaminated products that are circulating are recalled. Another objective is to differentiate and market foods with subtle of undetectable quality attributes. Companies improve supply management when using food traceability because they know which producers are giving them Grade A product and which producers are giving them Grade B product. This allows the supply companies to decide which producers they want to keep and which they want to let go. This also can contribute to a lower cost distribution system and reduce d recall expenses because suppliers know which producer made the mistake so they can pass most of the expense onto the producer. Food traceability also ensures trace back for food safety and quality. Traceability systems help companies isolate the source and extent of the safety or quality control problems. This makes sure if an infected product gets to the shelf it can be removed right away and possibly stop an outbreak. The better and more precise the tracing system, the faster a producer can identify and resolve food safety or quality problems. Companies also have started to enhance food traceability by sending third party safety/quality auditors to the sites to audit the quality of the food traceability system. These auditors provide consumers with verification that traceability systems exist to substantiate credence claims. For example, auditors from Food Alliance, a nonprofit organization, certify foods grown with a specific set of sustainable agricultural practices. Having a representative on site also ensures companies are sending the correct product. For instance, in the United States a farm has to be organic for three years in order to get the organic certification on their product. If a producer claims to be organic, and a consumer finds out that they are not organic, consequences can occur for the company, supplier, and producer. With food traceability there is no danger that producers would try to cheat consumers by selling non-GE (genetically engineered) soybeans as GE soybeans. In cases where markets do not supp ly enough traceability for food safety trace back, a number of industry groups have developed food safety and trace back standards. For example, the California cantaloupe industry has incorporated traceability requirements in their marketing strategy in order to monitor food safety practices. In addition, buyers in every sector are increasingly relying on contracting, vertical integration, or associations to improve product traceability and facilitate the verification of safety and quality attributes. The government may step in to ensure food safety by creating policy aimed at increasing the cost of distributing unsafe (non traceable) foods, such as fines or plant closures, or policies that increase the probability of catching unsafe food producers, such as increased safety testing or foodborne illness surveillance, will also provide firms with incentives to strengthen their traceability systems. Foodborne illness surveillance systems increase the capability of the entire food suppl y chain to respond to food safety problems before they grow and affect more consumers. In the past decade the United States has had many outbreaks. Food can become contaminated at many different steps on the farm, in processing or distribution facilities, during transit, at retail and food service establishments, and in the home. The ability to trace pathways of any food, including tomatoes and other fresh produce, through every point in the supply chain is crucial for limiting foodborne illness in an outbreak, for preventing future outbreaks, and for reducing the impact on the segments of the industry whose products were not associated with the illnesses. The pathways that fresh produce travels from field to consumer have become increasingly complex, with items sometimes changing hands many times in the supply chain. For instance by the time an apple goes from a tree to a consumers mouth it comes into contact with multiple people, the person who checks the apples, the person who picks the apple, the person who transports the apples, and the person who checks the appl e at the distribution plant. In 2007 there was a multi-state outbreak of Salmonella associated with the consumption of peanut butter. In 2006, CDC informed FDA of a multi-state outbreak of illnesses associated with the consumption of fresh spinach contaminated with Escherichia coli O157:H7 (CITE). There are many illnesses associated with fresh produce, which causes food traceability to be a growing concern for the FDA. FDA is the Federal agency that regulates almost everything we eat except for meat, poultry, and processed egg products, which are regulated by the partners at the United States Department of Agriculture (USDA). Fresh produce presents special challenges for the FDA. Addressing the way fresh produce is grown, harvested, and moved from field to fork is crucial to minimizing the risk of microbial contamination. In recent years the FDA have worked with the industry to develop guidance on ways to prevent or minimize potential contamination, conducting educational outreach to consumers on safe food handl ing practices, sampling and analyzing both domestic and imported produce for pathogens, and working with industry and foreign countries to promote the use of good growing, harvesting, packing, transporting, and processing practices. However, education is only one part of better food traceability, research is another critical element. The FDA is currently working on improving the identification and detection of disease-causing bacteria and toxins in a variety of foods. Currently, there are four recognized classes of enterovirulent  E.  coli  that cause gastroenteritis in humans. These are collectively referred to as the EEC group. E. coli  O157:H7 is one of hundreds of strains of the bacterium  in the EEC group. The U.S. Department of Agricultures Food Safety and Inspection Service (FSIS) defines  Escherichia coli  0157:H7  as a bacterium  that lives harmlessly in the intestines of animals such as cattle, reptiles, and birds (CITE). However, in humans the bacterium, which can be transmitted by foods, animal contact, and drinking water- can cause bloody  diarrhea, and may lead to  hemolytic uremic syndrome (HUS), a life threatening disease. Although other generic strains of  E. coli  are thought to be harmless to humans, the O157:H7 strain is particularly virulent and dangerous. E. coli  O157:H7 was first recognized as a cause of illness in 1982 during an outbreak of severe bloody diarrhea; the outbreak was traced to cont aminated hamburgers. Since then, eating undercooked ground beef has caused more infections in the United States. Most people recover without antibiotics or other specific treatment within 5 to 10 days. Antibiotics should not be used to treat this infection. There is no evidence that antibiotics improve the course of disease, and it is thought that treatment with some antibiotics could lead to kidney complications. E. coli O157:H7 can cause death in humans. To prevent E. coli 0157:H7 cook all ground beef and hamburger thoroughly. This is because ground been can turn brown before disease causing bacteria can be killed. Drink only pasteurized milk, juice, or cider. Wash fruits and vegetables under running water, especial those that will not be cooked- doing this will may not remove all contamination because bacteria is sticky but it will remove most. Finally, make sure that persons with diarrhea, especially children, wash their hands carefully with soap after bowel movements to reduce the risk of spreading infection, and that persons wash hands after changing soiled diapers. E. coli 0157:H7 is a major health problem. It is estimated to cause infection in more than 70,000 patients a year in the United States. It has been reported to cause both large outbreaks as well as isolated sporadic infections in small numbers of individuals. In 2006, CDC informed FDA of a multi-state outbreak of illnesses associated with the consumption of fresh spinach contaminated with Escherichia coli O157:H7. Although this outbreak involved a perishable food, the food was sold in a package. The traceback investigation was facilitated because several consumers who had become ill still had packages of fresh spinach in their refrigerators. The information on those packages ultimately led investigators to the spinach processors. By looking at the processors records, the investigators were able to identify the implicated farms associated with the identified production lot of bagged spinach. This is an example of a trace back of medium complexity that took a little longer than the peanut butter outbreak in 2007. In 2007, CDC notified FDA of a multi-state outbreak of Salmonella Tennessee infections. In this case, because it was not a perishable food, consumers who had become ill still had jars of peanut butter available for testing. This enabled investigators to confirm the presence in that food of the contaminant associated with the outbreak. Further, because the food was packaged, the investigators were able to identify the manufacturer through the information on the jars. This is an example of a rapid trace back in which the necessary information was readily available. Salmonella  (S.) is the genus name for a large number (over 2,500) of types of bacteria. Every year, approximately 40,000 cases of salmonellosis are reported in the U.S. Because many milder cases are not diagnosed or reported, the actual number of infections may be 30 or more times greater. Salmonellosis is a rod-shaped, motile bacterium which is more common in the summer than winter. Salmonellosis can be caused by contaminated food processing or handling, especially by handling food with unwashed hands. Salmonella may also be found in the feces of some pets, especially those with diarrhea. You can become infected if you do not wash your hands after contact with these feces. Reptiles, baby chicks and ducklings, and small rodents such as hamsters are particularly likely to carry salmonella. Beef, poultry, milk, and eggs are most often infected with salmonella. But vegetables may also be contaminated. Contaminated foods usually look and smell normal. Symptoms include diarrhea, fever, and abdominal cramps. These symptoms develop 12 to 72 hours after infection, and the illness usually lasts 4 to 7 days.  Most people recover without treatment. But diarrhea and  dehydration  may be so severe that it is necessary to go to the hospital. Older adults, infants, and those with impaired immune systems are at highest risk. Food traceability is becoming an important area for concentration for companies because when margins are thin, knowing where your product comes from and the possibility of avoiding a consumer suing the company is worth the company (in some cases). The government and companies are now seeing the rewards of food traceability and putting money into food traceability. They have realized that spending money on food traceability will probably have a pay off in the end, and often is the difference between a successful company and an unsuccessful one. Food traceability also ensures traceback for food safety and quality. Traceability systems help firms isolate the source and extent of safety or quality control problems. This makes sure if an infected product gets to the shelf it can be removed right away and possibly stop an outbreak. The better and more precise the tracing system, the faster a producer can identify and resolve food safety or quality problems. Escherichia coli O157:H7 and Sal monella  are responsible for a large number of deaths each year, these can in part be avoided with better food tracing systems to ensure that food gets to consumers quicker. The concept of food origin tracing is not new to the industry. The safety and integrity of our food has always been a concern for meat, food and beverage producers. However, the world has become more risky. Increased globalization of supply chain sourcing and distribution, combined with political instability, more rapid spread of contamination and disease, and the growing threat of international terrorism have brought the issues of food supply safety and traceability to the forefront of public concern.