Appraisal of a capital expenditure project Essay

Appraisal of a capital expenditure project - Essay Example The three projects have different implications on the number of people needed to operate the machines, and vary in costs and capacity. Evaluating Capital Expenditures Choosing among capital expenditure projects should not rely solely on financial assessment. It is also important to undertake a subjective evaluation of each of the projects, in terms of its suitability for the macro-environment. An examination of the PEST (political, economic, social, and technological) conditions will determine which of the firms, if any, must be excluded by environmental conditions, or which would prove exceptionally suitable to these conditions. A risk assessment is another pre-requisite to determine which of the projects may pose extraordinary or undue risk for the company or the workers who shall be involved in the installation or operation of the new machinery. Incremental analysis shall be employed in this study, which requires discounting the existing financial data reflected by current operati ons, and instead rendering judgment based on the analysis of changes introduced by each project. Incremental analysis includes only the financial data that would vary in the future as a result of adopting each of the possible alternatives; all current data that are foreseen to remain unchanged are not included in the analysis (Weygandt, Kimmel & Kieso, 2010, p. 299). The accounts that appear in the next tables are the changes expected, based on estimates by the principal owners of the corporation, spouses Bill and Terry Anderson. Alternative projects Project A involves the purchase of a machine, the price and installation of which amount to 110,000 during year 0. This capital expenditure is depreciated over the life of the project, which is 8 years, and since there is no salvage value the annual increase in depreciation expense is 13,750, using the straight line depreciation method. The project mechanises some of the production functions, and as a result of adopting this Project, fe wer people will need to be hired. This results in a corresponding reduction in labour expense that gradually increases through the years as the operation becomes more efficient. Adoption of Project A does not foresee any change in revenues, cost of sales or operating expenses, other than the change in depreciation and labour expenses. The incremental accounts pertaining to Project A are shown in the next two tables. Since the increase in depreciation expense and decrease in labour expense have a cumulative effect on the net taxable income, there is a change in net income after tax after application of the 30% income tax rate. If the depreciation expense, which is a non-cash expense, is added back into the net income after tax, then the cash flow resulting from the adoption of Project A is obtained. The cash flow stream for the duration of Project A shall be used in the non-accounting capital expenditure assessment techniques Similarly, the incremental accounts for Project B are show n in the next two tables. Project B has a much smaller purchase and installation cost of 45,000 which comprises its initial investment. The resulting change in depreciation expense is an increase of 4,500 per year for the 10 years that constitute the life of Project B, using straight-line depreciation method. Project B has an assumed increase in revenues, owing to the fact that the business

Motivation Letter Essay Example for Free

Motivation Letter Essay Motivation Letter Application For Studying In University Paul Cezanne Aix Marseille To whom it may concern: In addition to all my documents provided, I would like to take this great opportunity to write a motivation letter to clarify my main reason that drives me to study in University Paul Cezanne Aix Marseille. After graduation from _____ University major in Industry International Trade, I acquired knowledge in an extensive business area, for example, accounting, finance, international trade, corporate management, law etc. I worked at Credit Control department at Accenture Consulting Company for around 2 years. My responsibility includes providing customer service to UK clients, collecting overdue debt, applying cash payments, making financial adjustments and analyzing credit status for customers. My interpersonal skills improved greatly and English skill was polished as well through daily contact with British customers. Currently I have been worked as assistant product manager at Golden Label 5 International Trade Company. My responsibilities are to communicate with the sales team, the distributors and the promotional girls in order to motivate them and to let them be more and more aware of our brands images to manage efficiently the existing marketing tools to participate in the development of new marketing tools and participate in the development of the promotions for the day market. I believe that my current working experience is the main reason that drives me to study in France. By choosing to study University Paul Cezanne Aix Marseille there are a few advantages that I can achieve my goal: My current job is to assist my French boss (marketing director) to communicate with the sales team, the distributors and the promotional girls in order to motivate them and to let them be more and more aware of our brands images. Meanwhile boost and maintain our brand image. In order to cooperate better with my boss, I started to learn French since last June. Although we still discuss in English during daily life, my French language does help me a lot when I explain some authentic French traditional wines and spirits knowledge to customers. I know more and more about French, French culture, French wine, etc. And I believe that what I will obtain in University Paul Cezanne Aix Marseille give me a global view of International corporate management and have a multi-culture background. France is a multicultural country, and University Paul Cezanne Aix Marseille is a well-known multicultural university. I can learn how to interact within different cultures to improve my interpersonal skills. I also can build up a network that comprises friends from different countries and areas. France has good relationship with China. And now China is becoming certainly the biggest potential market for France. With my multi- culture background and French experience and skills, when I have completed study in France and returns China, I can participate into the development of business cooperation or any other relationship. In short, by choosing to study in University Paul Cezanne Aix Marseille, I will benefit greatly from the extraordinary experience for building up my professional career, and I will help to build China, my motherland, into a well-managed market economy country. I am looking forward that my application can be assessed and approved at your earliest convenience! Kind Regards Li

Feminist Perspective on Eighteenth Century Literature Essay -- feminis

Feminist Perspective on Eighteenth Century Literature Feminism during the eighteenth century has come to be defined by the literature of the time. Women, who did not have as many outlets as they do today, expressed their political opinions through literature itself. Although feminist texts existed before the end of the century, women writers in the final decade were seen as more threatening to the dominant patriarchal system. Following the overthrow of the government in France, women in Britain believed that "a revolution in sentiments, manners, and moral opinions was possible in their own country" (5). Writers such as Mary Wollstonecraft reacted to the conservative patriarchal society by "[drawing] parallels between the domestic and the political, between the private and the public, in their fiction" (155). While all women did not attempt to reconstruct the gender roles of her time, the women who sought to equalize the positions of men and women were labeled as monstrous or "unsexed." Male authors of the late eighteenth century saw the patriarchal hereditary government as tyrannical and viewed Kings as animals. Writers such as Tom Paine, William Godwin, Thomas Holcroft, and Robert Bage believed "reason should decide issues of human affairs, not power based on money, age, rank, sex, or physical strength" (10). Men also saw the possibility of a revolution but only in terms of class structure. Although most male authors were sympathetic to the plight of women, they recognized the need to minimize class distinctions as more important than gender. Nevertheless, male appeals to humanity ironically inspired and became models for revolutionary women writers. Women writers later adopted this emphasis on individual abilities r... ...ewed women as naturally subordinate to men, women writers attempted to challenge this ideology and assert the need for change. The revolution in France, and the belief in the possibility of Britain's own revolution, led some women to adopt inappropriate outspoken tactics. However, these radical women were given derogatory labels which ultimately prevented other writers from directly challenges the system. Nevertheless, women writers during the final decade of the eighteenth century "politicized the domestic or sentimental novel in response to oppression and exclusion." In their fiction they challenged the roles of women in education and in the household. While they were not tremendously successful, the women of this time made recognizable to the public the importance of changing the role of women in society, and provided an impetus for the entire feminist movement.

Inventory and Costs

IIM Lucknow, Noida Campus MANAGEMENT ACCOUNTING –II Assignment – II, Daniel Dobbins Distillery, Inc (Case Analysis) Submitted By: Rahul Srivastava (WMP08034) Vinay Joshi (WMP08045) ANALYSIS Company History * Founded in 1880 in Oakwoods by Daniel Dobbins. * Major product is Old Trailridge Bourbon Whisky * High quality of whisky due to the unusual iron-free spring water used in the distillation process and the specially prepared fire-charred white oak barrels used in the aging process. * David Dobbins takes over in 1973. * Constant demand over the years High demand surge forecasted due to maturity of Baby boom generation. Manufacturing Process * Ingredients controlled by laws. * Barrels can be used only once * Barrels are made through a patented process * Whisky has to mature for at least 4 years after the process. * Stored in 50 gallon barrels for mellowing in warehouse Maturing or Aging Process * The 50-gallon barrels manufactured under a unique patented process at acos t of more than $60 per barrel. The barrels could not be reused foraging future batches of bourbon whiskey but could be sold to used barrel dealers for $1 each at the end of the aging period. The increased production in 1988 necessitated the leasing of an additional warehouse at an annual rental cost of $200,000. The temperature and humidity of the warehouse space had to be controlled since the quality of the whiskey could be ruined by its aging too fast or too slowly. * A small amount of liquid was removed from representative barrels at this time and sent to the sampling laboratory for quality inspection (usually performed by skilled tasters). If the quality of the whiskey was not up to standard, certain measures were taken, such as adjusting the aging process, to bring it up to standard. At this time, each barrel was also checked for leaks or seepage, and the required repairs were made. * On the average, the volume of liquid in a barrel declined by 30% during the aging period becau se of evaporation and leakage. Thus, a barrel originally filled with 50 gallons of new bourbon would, on the whole, produce only 35 gallons of aged bourbon. * The re-gauging operation was supervised by a government liquor tax agent, since it was at this point that federal excise tax of $21 per gallon was levied on the whiskey removed from the warehouse. In 1987 and 1988, the company sold 30,000 re-gauged barrels of whiskey, equivalent to about 43,000 barrels of original production. Excerpts from Board Meeting * Low prospect of obtaining the $3 million loan needed in light of our 1988loss of $814,000. We have shown annual profits since 1974, and our net sales of $42 million this year are the same as last year, and yet we incurred a net loss for the year. * It may appear that we are becoming less efficient in our production operation. * We increased production by 50% this year, and with this increased production our costs are bound to increase.You can't produce something for nothing. * Production costs must rise when production increases, but our inventory account takes care of the increased costs of deferring these product costs until a future period when the product is actually sold. * COGS did not increase in 1988, since the volume of sales was the same in 1988 as in 1987. The largest share of the increase in production costs has-been deferred until future periods, as you can see by looking at the increase in our inventory account of more than $1 million. The real reason for our loss this year was the large increase in other costs, composed chiefly of warehousing costs. The â€Å"Occupancy Costs† category in our P is really the summation of a group of expense accounts, including building depreciation or rent, heat, light, power, building maintenance, labor and supplies, real estate taxes, and insurance. In addition, warehouse labor cost also rose substantially in 1988. * We increased production, and this also means an increase in warehousing costs, sin ce the increased production has to be aged for several years.You just can't age 50% more whiskey for the same amount of money. * The inventory account can only be charged with those costs associated with the direct production of whiskey, and our warehousing costs are handling or carrying costs, certainly not production costs. * The manufacturing process doesn't stop with the newly produced bourbon; why it isn't even marketable in that form. Aging is an absolutely essential part of the manufacturing process, and I think the cost of barrels and part of the warehouse labor should be treated as direct costs of the product. Warehousing and aging costs are an absolutely essential ingredient of our final product. * Direct costs are those costs that are necessary to convert raw materials into the whiskey that goes into the aging barrels. * This is our cost of approximately $1 per gallon and includes the cost of raw materials going into the product such as grain, yeast, and malt; the direct labor necessary to convert these materials into whiskey; and the cost of any other overhead items that are needed to permit the workers to convert grain into whiskey. The Problem The main issue at Daniel Dobbins Distillery, Inc. s a disagreement among the senior management with regards to the allocation of costs. Specifically, it is a question of whether to include Ageing Costs, Cost of Barrels, and Warehouse Expense as a part of inventory (in which case it will be an asset that belongs to the Balance Sheet) or as a part of Occupancy Costs (which will be listed in the Income Statement). Listing the above mentioned costs as part of the balance sheet will overstate the assets and understate the expenses misleading the actual profitability of the company. Alternatives 1. Leave all accounts as they are. . Transfer Cost of Barrel from Other Costs in the Income Statement to the Balance Sheet as a Contra-Asset that is part of Inventory. Transfer Ageing Costs from the Income Statement to th e Balance Sheet and list it under Long Term Contra-Assets. Break up Warehouse Labor into different temporary accounts that are spread out both on the Income Statement as well as the Balance Sheet. Evaluation of Alternatives Alternative 1: Strengths: This alternative improves the Net Profit figure in the Income Statement by increasing the value of Closing Inventory in the Balance Sheet.Weaknesses: Breaking up Warehouse Labor and accurately allocating the costs across the two financial statements may not be feasible. Opportunities: Choosing this alternative immediately improves its chances of securing the $3,000,000 loan from the bank. Threats: Carrying out this alternative poses the risk of the company getting unfavorable press which may have a negative impact on its reputation. Another threat is that this alternative could be misused by senior management as a way of hiding inefficiencies, bad expenses, overstating retained earnings, and understating expenses.Alternative 2: Logically Inventory costs include all the direct costs involved in the production process till the finished goods (ready for sale). As in this process ageing is an essential part of the manufacturing process, the cost of barrels and warehousing should be treated as direct costs otherwise it will affect the Income Statements for the subsequent years thereby misleading the actual profitability of the company. Other costs involved are: Occupancy Costs: Factory Building (Used for warehousing also) which is rented.Warehouse Labor & supervisor cost. Depreciation: Warehouse Equipment. All these costs will remain in COGS and Costs of Barrel used during the year at$63,00 per barrel will be added to (asset) Inventory and hence closing inventory(Effect in balance Sheet: Closing Inventory value increase) will shoot up and hence Net Profit Figure(in P&L statement) will also improve upon by the same amount. At the end of four years of aging process, barrels are removed and dumped into re-gauging tanks.Hen ce, all these costs will be added to (asset) Inventory and hence closing inventory (Effect in balance Sheet: Closing Inventory value increases) will shoot up and hence Net Profit Figure (in P&L statement) will also improve upon by the same amount. Another issue faced is possible difficulty in obtaining a $3 million loan due to reported loss of $814,000 for the year ended 1988. There is a need of urgency to solve the above matters and loan approval due to urgent need of working capital. The reason for such urgency and loss reporting are as follows: a.Increase in production capability: Daniel Dobbins increased its production capacity by 50% in 1988 to meet the expected increase in demand through 1991 to 1995. The production of whiskey takes 4 yrs before its ready for consumption and hence, the planning has to be done 4 yrs ahead to meet the required demand. b. Additional rent on new Warehouse: The increased production capacity in 1988 necessitated Daniel Dobbins to lease out a new sto rage warehouse at an annual rent of $200,000 which led to a sudden increase in expenses. c. Additional expenses related to warehouse Labor and supervisor.The higher the profit the stronger of company`s chance to get approved for the loan/credit by the Bank hence company should adopt the Accounting procedures stated above i. e. charging all direct costs as well as warehousing and ageing costs to Inventory and hence improving upon the Net Profit figures to increase company chances for loan approval. Few important points to be considered are: * Evaporation: A barrel is originally filled with 50 gallons of new bourbon but after aging only 35 gallons of aged bourbon is left. Cost of raw materials is incurred in producing 15 gallons of bourbon which gets lost due to evaporation.So accounting of this cost should also be considered. * Adjustment of aging process: If aged bourbon is not up to the standard, then each barrel needs to be checked for leaks or proliferated barrels and requires re pairs. Some more details: Because of the market forecast that the demand of straight whiskey will be doubled from 1987 to 1995, the board of Daniel Dobbins Whiskey Inc decided to increase the production of whiskey in 1988 by 50% of the 1987 volume to meet the anticipated increase in consumer demand from 1991 through 1995.The manufacturing process of whiskey can be divided into two stages: Under the first stage which consists of several different steps, raw materials are converted into a clear liquid with a sharp, biting taste. The second stage which is also called ‘Maturing or Aging Process’ involves maturing or aging for a minimum of four years under controlled temperature and humidity conditions. Because of the increase in cost of production in 1988, which will generate revenues only in 1991, the income statement of Daniel Dobbins Inc showed a net loss of $814000 which was a significant change from net profit of $1504000 in 1987.In order to get loan of $3 million from Ridgeview National Bank of Nashville, the point of consideration for COO of Daniel Dobbins Distillery is how to present the financial results of 1988 to the bank. This loan is critical for company to remain solvent. One of the key issues in this case is how to divide the increased costs in 1988 between ‘Inventoriable costs’ and ‘Period costs’. According to the case, while preparing the income statement in 1988, the costs of first stage was included under inventoriable costs and costs of second stage was included under Period costs which resulted in net loss in 1988.Increase in cost of production in second stage can be attributed to following increase in costs under second stage of manufacturing. a) Increased costs due to increase in the number of barrels used for aging. $1260,000 b) Increase in occupancy cost: $332,000 c) Increase in warehousing cost: $146,000 d) Increase in Labor and supplies expense: $30,000 e) Increase in Depreciation expense: $8000 f) Increase in cost of government supervision: $8000Each of the above increase in costs of production in 1988 can be transferred from period costs to inventoriable costs and net profits can be increased for year 1988 e. g. if we just transfer increase in costs due to increase in number of barrels ($1260,000) to balance sheet from income statement, the net profit of year 1988 will become ( $1260,000 – $814,000 = $446,000) but as a result the net profit of subsequent years will go down as the cost of goods sold will be increased in coming years.So the decision to transfer different costs to inventoriable costs which gets included as assets in balance sheet instead of expenses in income statement can be left to management depending upon how much profit it want to report in current as well as subsequent years. Since aging is an absolutely essential part of the manufacturing process and the manufacturing process doesn’t stop after the first stage, Costs of barrels and warehous e labor costs should be included under inventoriable costs. This will increase the profits of the company in 1988 and will also help them in getting the loan

A Raisin in the Sun – 5

â€Å" The whole course of human history may depend on a change of heart in one solitary and even humble individual- for it is in the solitary mind and soul of the individual that the battle between good and evil is waged and ultimately won or lost. † This quote speaks of changes in heart. I believe someone who has a change in anyway, whether it’s in heart o anything else, for good has grown and become dynamic. Dynamic is characterized as a constant change in activity or progress. Perhaps the most dynamic character in Hansberry’s A Raisin in the Sun is Beneatha because of her change in identity, career, and love.The first reason why I believe she is the most dynamic character is because of her change in identity. During the beginning of the play Beneatha had straight hair, along with everyone else in her family that was a female. She enjoyed and did not mind her straight hair; until Asagai pointed out that she was conforming to society. He was speaking of the act of imitating the behavior of some situation or some process by means of something suitably analogous, or a simulation. He makes the argument that she should straighten her hair because she should keep her original routes.He begins to speak of being assimilated or, people of different backgrounds come to see themselves as part of a larger national family. Another thing that Beneatha to change her identity was listen to different types of music. She did this in the hopes to prove to her family she did not want to conform. She wanted to prove that she could stay true to her heritage. The next thing that led me to believe that Beneatha is the most dynamic character is her change in career. Although Beneatha has chosen a career path, she is not sure what she would like to do in her spare time.She speaks to mama about learning how to play the guitar. Mama says, â€Å"Why you got to flit so from one thing to another, baby? † (Hansberry 47) Beneatha replies, â€Å"I just want to le arn to play the guitar. Is there anything wrong with that? † (Hansberry 47) â€Å"Ain’t nobody trying to stop you. I just wonders sometimes why you has to flit so from one thing to another all the time. You ain’t never done nothing with all that camera equipment you brought home-â€Å", Mama says (Hansberry 47). She has pursued several different options, but she is like a kid in a candy store and has an extremely difficult time staying, or sticking to one thing.But the thing about her career that changes isn’t what she wants to do, but why she wants to do it. In the beginning of the play she talks about how she wanted to be a doctor because of a tragic accident she witnessed as a child. Her friends face split open before her eyes, and she thought, â€Å"Well that’s the end of him. † But, one day he returned with just a simply scar on his face, and since then she wanted to be that person to help a child live on. But, in the middle of the pla y, she loses faith and finds all dreams pointless, she loses sight of everything that she once stood for.Asagai brings her back to reality, and helps her realize that she can make a difference and change the world, one person at a time. At the end of the play it now becomes clear that she wants to help kids in Africa along side of Asigai. The structure of why is changed because love gets mixed within her dreams. My last reason why I believe that Beneatha is a dynamic character is because of her in heart. George Murchison offers the best opportunities for Beneatha and her family. However, Beneatha comes to a startling discovery after spending an evening with George.He says to her, â€Å"I don’t go out with you to discuss the nature of ‘quiet desperation’ or to hear all about your thoughts – because the world will go on thinking what it thinks regardless – â€Å"(Hansberry 97). After George’s departure, Beneatha is speaking to Mama. She says, â€Å"Mama, George is a fool – honest† (Hansberry 97). Even though George is a wealthy, good-looking man, his shallowness becomes his bitter downfall. Beneatha realizes that she can do much better than him, and that she deserves better than him. George is completely oblivious to her revelation and thinks that his opinion is neither ignorant nor cruel.The irony in George’s statement is that Beneatha can make a difference simply by voicing her opinions and letting her presence made known. Even before George made his brutal comments to Beneatha, she was rethinking her choice of companion. This is when she begins to look further into the enigma that is Asagai. Joseph Asagai, an intellectual from Nigeria. Asagai says that Beneatha seeks out those who understand her hardships, her lack of a definite identity, and her need for an intellectual relationship. As is true with almost any young woman, what she thinks she needs and what she actually needs are two strikingly different things.With two men vying for her heart, Beneatha must make a decision regarding who is best for her. She then, at the end the play, realizes this is the man the she wants and should be with. In conclusion, As Beneatha’s interests change, so does who she is. Her ever-changing identity helps to define her as a diverse individual. This is shown through her change in identity, career, and love. Maybe who we are as a person isn't so much about what we do, but rather what we're capable of when we least expect it. Never doubt oneself and don’t worry about what others think, because sometimes change can be a good thing, and sometimes change is needed.