LATE ADULTHOOD Essay Example | Topics and Well Written Essays - 500 words

LATE ADULTHOOD - Essay Example However, evidence suggests that married persons tend to be happier in late adulthood than single persons, though those who have never married often cope the best with feelings of loneliness in late life. Erik Erikson (1902-1994) proposed a lifespan theory of development. He described the late adult stage of our life as coming to accept one's whole life and reflecting on that life in a positive manner. He calls this stage of development Integrity versus Despair. According to Erikson, achieving a sense of integrity means fully accepting oneself, one's accomplishments, and coming to terms with mortality. Accepting responsibility for your life and being able to undo the past and achieve satisfaction with self is essential. On the other hand, some may look back at their lives with a sense of doubt or gloom over their life's worth. This results in feelings of despair. For Erikson, successful resolution of this stage results in the virtue wisdom. Overweight can contribute to many an illness. The term overweight is generally used to indicate that a human has more body fat than is considered useful for the optimal functioning of the body. Being overweight is a fairly common condition for many people, especially those in developed nations where food supplies are plentiful and lifestyles often do not involve a lot of activities that generate caloric expenditure.

A Critique on Enlightenment philosophy Term Paper

A Critique on Enlightenment philosophy - Term Paper Example In fact the process of enlightenment transforms back into what it tries to separate itself from; the myth. Theodore W. Adorno (1903-1969) was a German philosopher, sociologist and musicologist. He is recognized mostly for his critical theory of society. His work is selected for this paper as the philosopher has published books specifically focusing and critiquing the concept of enlightenment. His notable works include Dialect of Enlightenment (1947) and Negative Dialects (1966). The works of other intellects used to justify the thesis includes names like Jay M. Bernstein. In his book Adorno: Disenchantment and Ethics (2001), he gives a comprehensive view of Adorno’s aesthetics and social theory. His work is used here to understand the Adorno’s critique of enlightenment in depth. Adorno’s critique of enlightenment is not about the European Enlightenment or a specific scientific thinking. It encompasses the generalized idea of enlightenment. This way there are two fields of knowledge (thinking); before enlightenment and after it. The knowledge that existed prior to enlightenment was based on faith, intangible and uncountable aspects like myth and magic. Enlightenment is thus the opposite of mythology; the process of disenchanting and demythologizing. Most of enlightenment theories exist to negate magic and myth. The mythical way in understanding the universe involves unforeseen forces or gods. What cannot be directly comprehended by mind is left to such forces. After all, if humans cannot grasp infinity, it does not mean that it doesn’t exist. Adorno and Horkheimer give extra weightage to transcendent content, which means that what is beyond the immediate thinking (knowledge) MUST be considered. Scientific thinking relies on comprehending everything. Thus there exists an inclination of ruling out what lies beyond the immediate truth. Enlightenment does not encourage imagination for imagination can

The aging problem of China

The aging problem of China Introduction Today, China is a hot item in the media because of its fast growing economy. Some people are even afraid of this because they think it is a threat to our own economy. This because of the differences in the political and economical system of china compared to our political and economical systems. The Peoples Republic of China, also known as China, was established in 1949. Its land covers a large part of centre Asia. In the 1950s, its population was estimated at around 30 percent of the total global population (Naughton, 2007). Because of this huge amount of people, the Chinese government came up with a plan to put a hold to this growing population. They set a law which prohibited each family to have more than one child, the so-called One-Child Policy. The population of China today is relatively young, with a low dependency rate. This is favorable for economic growth (Naughton, 2007). In the future this will lead to an imbalance of the population. This because each working citizen has two elder (parents), this means a working class which is far too small on the total population. Every year, the number of elderly people in China rises with approximately three percent. A way to describe this is calling this a Four-Two-One problem. Which means one child has to take care of two parents and four grand parents (Vandendriessche, 2008). The research question which I will try to answer is the following: How is china going to handle the aging problem of the population? To answer this question, I divided this question into several sub-question, namely: How has this aging problem risen? What are the difficulties which china is facing because of this problem? How do the Chinese old people deal with their longevity financially? Motivation of the subject: The subject of Chinese economy is interesting to me because I have little faith in the current economic system of the western society. I believe this economic system based on debts, is not what we would like in the future. And China is one of the few economies which is growing at the moment, despite the current Financial Crisis. Chinas economy will expand 7.2 percent in 2009 from a year earlier. (Bloomberg.com, 2009) But because many economists say capitalism is the best economic system at the moment, I am surprised to see that China does not apply this system. The reason the subject of the aging of Chinas population is important to the economy, is that will one of the greatest pitfalls in Chinas economic and societies future. A disproportionate ration of the population will retire in the future, therefore a much smaller group of working people will have to keep the society up and running. Is this possible, or are there many problems which China will have to face in the future? And if there will be problems, is China able to prevent or solve them? This is interesting because of the large number of citizens of China. This cannot be compared with any other country in the world, because it will happen on a much larger scale as for instance in the Netherlands. Methodology: First I will try to adumbrate an image of how the situation has developed to the state in which it is at this moment. With this image, certain problems will arise from this. I will try to give a broader view on these problems. These problems, when not solved, will have an impact on the economic environment of China. This I would like to formulate in the third chapter. Finally I am going to investigate whether these, in the future, elder people still have the means to survive on their own, or how the Chinese government is going to assist them with this. This with some kind of pension fund or will the Chinese government terugvallen on the social responsibility of family. With these sub-answers I would like to give an answer to the main question. How China is going to handle the problem of the aging of the population. The data which I need I will get from articles from the Chinese Economic Review, data from the Chinese Bureau of Statistics, Chinese Data Centre and the Chinese Statistical Yearbook. Furthermore I will search for books on the Chinese economy and the history of the Chinese economy and society. Structure The first chapter is about the introduction of the problem and each factor contributing will be explained. In chapter two I am going to give a literature review on five of the interesting papers I have found. Then I will try to find answers to the sub question of my problem statement. These will each cover a chapter. Chapter three: How has this aging problem risen? Chapter four: What are the difficulties which china is facing because of this problem? Chapter five: How do the Chinese old people deal with their longevity financially? After this I will draw a conclusion based on the previous chapters. With this I will try to give an answer to the main question. Chapter 2 Literature Review Population and economic development Gale Johnson tries to answer the question, what would happen to fertility and population growth if the present population policy were changed to one that emphasized family planning and permitted families to have the number of children that they wished? It seems reasonable to project that there would be an increase in fertility. This would be very small in urban areas and relatively small in higher income rural areas. There would be increased fertility in the lower income rural areas, but it seems unlikely that after two decades or so it could be more than ten percent. There is evidence to support the following changes in social and economic policies: Significantly improve the quality of rural secondary schools and increase the percentage of girls attending. Create an attractive pension program for rural areas. Give farm people the ownership or permanent rights to the use of the land they farm or, failing that, enforce the policy of no reallocation of farm land on the basis of demographic changes. Change policies and institutions so that families could migrate from rural to urban areas. Which would lead to adaption of the fertility patterns of urban areas, leading to decline in fertility. I believe the largest impact on the fertility rate, when present policy towards this is changed, will be in the poorer regions of the rural areas. But I do not think all changes give will work. The improvement of educational quality and increasing the percentage of girls will be the one of the most important measures to be taken. This will give an re-allocation of human capital. With this re-allocation, people will get other jobs and therefore a need for many children to work on the farms will decrease. Pension funds are in my opinion essential in order for elderly citizens of China to get by financially. This because the life expectancy rate is increasing. The right of ownership is a viewpoint which will be very sensitive. This because China still has a communistic government. But when pension funds are not one of the future measures which will be taken, this is one of the other options for Chinese citizens to make enough money in order to cope with their longevity financially. Sources of Chinas economic growth 1952-1999: incorporating human capital accumulation Wang and Yao, find that first, the accumulation of human capital in China, as measured by the average years of schooling in population aged 15-64 years, was quite rapid and it contributed significantly to growth and welfare. However, the rate of growth of human capital declined in the reform period in 1978-1999 and its contribution to GDP growth was smaller compared to the pre-reform period. In the industrial countries, the contributions to growth by the factor input have declined and the growth of TFP has become the driving force. In China, the potential to further increase factor inputs is limited especially after one considers the rapidly aging population, a decling labor force in the future, and the constraints in natural resources. China has to rely more on productivity growth. Futher productivity growth would depend very much on two factors: First whether or not China can improve allocative efficiency by continuing reforms in the state and financial sectors and by increasing regional integration, allowing freer factor mobility across sectoral devides, such as rural-urban and state- nonstate, and second whether or not China is able to transform itself from an imitation based economy to an innovation based knowledge economy and continue its progress in industrial upgrading. I agree with Wang and Yao on the fact that productivity has to grow in China. But in order to do this China has to open up more to other countries. Otherwise this would take too long. China is in need for knowledge, this can be seen in the imitation based economy. When China would have the knowledge, they would invent these products themselves. Chinas economic environment has its limitations to grow, this because of their ownership laws. China does not have to change into a Capitalistic society, but I think it does have to loosen up in order to cope with the problems it faces. Pension reform in China: preparing for the future According to Loraine West, a combination of pension plans, including defined benefit and defined contribution, are replacing the former single defined benefit plan. The specifics of each plan, including indexation for inflation, and the combination of plans available to workers vary across regions. By focusing only on the urban labor force, which presently comprises just 27 percent of Chinas total labor force, the reformed old age security system is unlikely to address the issue of growing rural-urban inequality. The proliferation of regional and industry-based pools diminishes the potential benefits of pooling, such as risk sharing, lower administrative costs, and enhanced labor mobility, and also makes it more difficult to achieve the goal of a national level pool. The key objectives of the new pension system is to move away from a pay-as-you-go system to partial funding in preparation of the aging of the population. However, to have a successful pension system in the future, the financing burden has to be shared by employees, employers and the government rather than being borne exclusively by the individual work unit. In the short run, it is critical that regulations and supervision catch up with the new system. In the long term, expansion of coverage and benefit adjustments need to be considered. I agree it will be hard to implement a new old age security system in China. However, I believe it will be key to implement a system which is the same in every part of China. Otherwise the differences between rural and urban areas will only expand, and thus create an even higher burden on the economy than it is at this moment. This will be difficult to fulfill because which groups have to contribute the most. This might even call for a similar system as in the Netherlands, where the government guarantees a minimal pension wage and where the rest is contributed by the companies and working force. How can China solve its old age security problem? The interaction between pension, soe and financial market reform. According to Estelle James, she suggests a plan which sets up individual accounts for each worker, with funds that are productively invested. This is similar to reforms that have been sweeping Latin America, Eastern Europe and are now being considered in the United States. Besides making the system more fiscally sustainable and avoiding peak contribution rates, prefunding can be used to increase saving that is committed for long term investments and pension funds can be used as engines to financial market development and corporate governance. This can be done with two mandatory pillars; one publically managed and tax or pay-as-you-go financed, the other privately managed, with the object of building and managing retirement savings. This to avoid high payroll taxes as the populations age, thereby making the system more sustainable, and to increase national savings that are committed to the long term. However, the part of the economy that is growing most rapidly, in part because it faces low taxes, liabilities and regulations, would suddenly be hit with a heavy legacy of the past. The challenge for China is to find a way to implement a more funded system, that includes decentralized competitive management of the funds, quickly, before coverage increases become a social necessity and makes the transition more difficult. Here I have the same critique as on the previous literature, namely about the rural and urban separation. When the pension system first only reforms the urban part and later expands its coverage towards the rural area, the cost will only increase more and more. But it will be complicated to implement a new system immediately for the entire country, this because it will give a huge burden on the current working class. Chapter 3: The history of China. The year 1949 can be viewed as the First major divide in Chinese history. Before this year, no rapid growth ever occurred in Chinese economy. This was completely different after 1949, when rapid growth was considerably normal. The government is also drastically different after 1949. In 1950 a new law was introduced which stated that: Parents have the duty to raise their children well and the children in their turn have the duty to support their parents. This was a good way for the Chinese government at that time, to not be directly responsible for the attendance of the elder citizens. This was an indication of the change from a harmonious civilization towards a more individualistic civilization. During the fifties, a five-guarantee program had launched for the rural areas. This program mend support from the government for elder who had no offspring or other people who took care of them in the form of food, clothing, shelter, medical care and a funeral. (Naughton, 2007) in 1951, the Chinese government came up with the act Labour Insurance Regulations of the Peoples Republic of China. These first pension regulations where only for citizens working at state enterprises. This mend that all employees of such enterprise have to give three percent of their salary to a mutual fund within this company, and when they reached the age of sixty and they had worked for more than twenty years they would receive a pension. (Frazier, 2004) This reality, this resulted in a relatively low percentage of people who received a pension, because until 1971 nobody could reach this twenty years of work experience. At the end of the seventies, two major new regulations were introduced. First in 1978 where China opened their borders a tiny bit for foreign companies to do business with Chinese companies, but still under heavy oversight by the Chinese government. This also led towards a higher independency of the state enterprises. These where allowed to keep their profit. But also the responsibility of pensions was now entirely for these companies. It was now also allowed for Chinese citizens to start up their own company. (KNAG, 2007) However, these new private owned companies were not able to give the same pension security as these former state enterprises. Therefore the Chinese government came up with a new experiment of pension funding in 1982. They tried to create pension funds not just per company, but pension funds for an entire city to create a higher safety net. These funds were filled by employees working in this city on a pay-as-you-go (PAYG) basis. This means the pensions which are cu rrently paid, are funded by the taxes and contributions from the working people at the same moment. That means there are no assets being set aside. The rural area did not benefit from all these regulations. Because of this new kind of economy, the rural areas decentralized. This took a lot of security away for the elder in these areas, because they were still dependant on the help of family. The second regulation introduced in the late seventies was the One-Child Policy. This because the government of China began to see the great threat of the exponentially growing population. This phenomena I will explain in the next chapter. In the years 1991 and 1995 the government tried to reform the current PAYG system by creating a multi pillar system. (Vandendriessche, 2008) This system contained three pillars which all contributed to one overall pension fund. The first pillar was the basic pension for every employee of a company funded by the state. The second pillar was a individual fund which was filled during the years of work of each person. Frazier calls this Defined Contribution. The third pillar is optional, and is an additional payment made to the pension fund to increase the pension received later in the employees lives. But even with this new reformed pension funding, it is far from ideal. Chapter 4: How has this aging problem risen? Aging of population (also known as demographic aging, and population aging) is a summary term for shifts in the age distribution of a population toward older ages. Which is a direct consequence of the ongoing global fertility transition (decline) and of mortality decline at older ages. (Gavrilov and Heuveline,2003) These two factors can both be seen in the statistical yearbook of China. (Appendix 1) One of the factors, the mortality rate decline at older ages (See Appendix 1F), can be explained mainly by a better health care; more knowledge of the human body and better medicine (especially anti biotic). The New Rural Co-operative Medical Care System (NRCMCS) is an new project set up in the year two-thousand-five to improve the health care sector in China, especially to make it affordable for the rural area. (China daily, 2005) This NRCMCS covers around eighty percent of the total cost of the hospitals. Under the new policy, the central government, local governments, and individual farmers each invest 10 yuan (US$1.23) per year to establish a medical insurance account. The money accumulated is then used to fund hospital treatment. (China daily, 2005) Thought this initiative, many Chinese citizens are now covered for their medical insurance. Around eighty percent of all Chinese citizens living in the rural areas have signed up, which are approximately 685 million people. The second factor, the fertility rate is harder to explain. Deliberately decreasing the fertility rate has been an issue of the Chinese government since 1971. In 1970, the total fertility rate was 5.8. At the time of 1978, the fertility rate has decreased with fifty percent to 2.7. This due to the policy known as wan-xi-shao, meaning later marriages, longer spacing between children, and fewer children in total. Through 1979 the probability of a couple having a second child, given that they had already given birth to a first child, was 95 percent (Feeney and Yu, 1987). Chinas leaders where still worried because chinas baby-boomers where now reaching marriage age. These baby boomers where born in the years before this wan-xi-shao policy because of the Great Leap Forward. Chinas leaders thought these group of people would have to many children and this would outgrow the population carrying capacity. The One-Child policy was established as a law in 1980 by the former Chinese leader Deng Xiaoping. He implemented this law to limit the birth rate of China. This policy was instantly controversial because of it was strictly enhanced in the first years. There was for example a policy for mandatory insertion of intrauterine devices for women with one child and sterilization for couples with two or more children. At 1984, resistance (both nationally and internationally) has risen to a crucial level. The Chinese government relinquished these strict policies and the overall law loosened up. This mend for example that regional governments, especially in rural areas, a policy which allowed couples to have a second child when their first child was a girl. In more urban areas the One-Child Policy was maintained more strictly. But not only due to the one-child policy fertility rates has gone down. There are significant similarities between China and other surrounding Asian countries in their fertility rates. (See Appendix 1E) However, this has not the same reason is these countries. In some countries, notably Japan and Korea, the low birth rate may be partly attributable to rising job opportunities and earning power for women. But that is not the case in Taiwan, Singapore or Hong Kong, where women have excellent work opportunities and access to low-paid domestic help from Southeast Asia. There is a reluctance to marry, particularly among the better educated women, as well as a preference for few, if any, children. (Bowring, 2007) But because the Great Leap Forward in China, their fertility rate has risen in the years between 1955 and 1970. This in contrast with the other Asian countries shown in this graph (See Appendix 1E). Chapter 5: What are the difficulties which china is facing because of this problem? The most obvious problem China will face is the increasing group of elder people. According to Estelle James, In 1990 only nine percent of Chinas population was over the age of 65, bu by 2030 this proportion will more than double, to twenty-two percent. This means that more than a quarter of the elder people of the entire world will live in China by 2030. As you can see in Appendix the dependency ratio of elderly people in rural areas will be approximately 0.34 in 2030, and 0.18 in urban areas. Zeng et al. (2008) suggest that, if urbanization reaches 75%, the dependency ratio is likely to continue to rise rapidly in rural areas and may exceed 0.6 by 2050, versus just over 0.3 in urban areas. With such a high dependency ratio, a high contribution rate is required from working people to cover the current bill. The second problem is the gender imbalance in China. There is a huge surplus of men. At this moment there is are thirty-two million more Chinese boys than girls under the age of twenty. (NYTimes, 2009) These surplus of boys are known in China as guang guan. Together with the fact that not everyone will marry or have a child when the sex-ratio is normal, there will be a lot of elderly in the future who do not have children to support them and must rely on some sort of pension. Lin Jiang believes there will be almost four million elderly citizens in the rural area by 2030 who do not have a single child. The third problem is that the growth of the working age population will drop off quickly and reach zero growth after 2015. (see appendix) He calculated this because of The persistence of fertility and mortality rates combines with the existing structure of the population to produce predictable patterns of change of the labor force. Also According to Naughton, The labor market is just now absorbing the last huge birth cohort (the baby boom echo born in the late 1980s) The GDP rate per capita (appendix 2) is still increasing. However the rate of increasing is declining in the last two years. This in accordance with the future growth/ decline of the working age population a conclusion can be drawn that the growth of GDP rate per capita will also decline, not taken into account the growth of the economy. Therefore it is important to stimulate this growth of economy. This has to be reacted on in order to stop the rising burden on the currently employed after 2015, because of the change in population structure. Chapter 6: How do the Chinese old people deal with their longevity financially? It is difficult to ascertain exactly how other countries have financed the transition because of the fungibility of money and the ambiguity of the counterfactual. Most reforming countries in Latin America and Eastern Europe have utilized parametric changes that downsized bloated benefit obligations, to reduce the IPD and the financing gap. Beyond that, the following revenue sources appear to be common: Keeping part of the system PAYG, so contributions continue flowing into the PAYG pillaras in Poland, Hungary, Uruguay and Sweden; Raising revenues from contributions by increasing the payroll tax or the compliance rate-an add-on was used in OECD countries and most other countries are trying to decrease evasion; Using other special revenue sources such as a lottery or a value added tax (Argentina); Using general revenues or social security surpluses that are available at the municipal, provincial or state level (Chile); Applying proceeds from the sale of SOE assets to cover pension liabilities (assetdebt swaps)-SOE and pension reform were linked in Peru, Bolivia and Poland; Borrowing in the short run and repaying with the surplus that the system would run in the longer run, as the individual accounts take on a greater portion of the total pension responsibility (most countries have used this method to smooth the burden of transition costs over many cohorts). Most of these methods would be appropriate for China. China is now using proceeds from a national lottery, a tax on interest income and, as already discussed, direct allocations from the MOF. We concentrate here on a source that has just been tapped proceeds from the sale of state assets-and another source that is essential but has yet to be seriously addressedbenefit reduction. These two sources, between them, could cover much of the transition costs. References: Homan, T. R. (2009, June 18). World Bank Raises China 2009 Growth Forecast to 7.2%. Retrieved from http://www.bloomberg.com/apps/news?pid=20601087sid=aoNG311GdSSk Naughton, B. (2007). The Chinese Economy: Transitions and growth. Cambridge, Massachusetts and London, England Vandendriessche, A. (2008) Hoe worden ouderen verzorgd in China? The Netherlands Frazier, M.W., After Pension Reform: Navigating the Third Rail in China, Studies in Comparative International Development 39:2 (2004), p. 48. Feeney, G., and Jingyuan Yu (1987) Period Parity Progression Measures of Fertility in China. Population Studies, 41(1): 77-102 Statistical yearbook of china Bureau of statistics Zeng, Y., Z. Wang, J. Leiwen and D. Gu (2008), Projection of Family Households and Elderly Living Arrangement in the Context of Rapid Population Aging in China, GENUS. Wang Feng (2005). Can China Afford to Continue Its One-Child Policy? AsiaPacific Issues, No. 77, March. Honolulu: East-West Center. Bowring, P. (2007) How Asians can have more babies. Retrieved from: http://www.nytimes.com/2007/05/18/opinion/18iht-edbowring.1.5768104.html?_r=1 http://en.wikipedia.org/wiki/Public_health_in_the_People%27s_Republic_of_China http://www.chinadaily.com.cn/english/doc/2005-11/02/content_489869.htm Knag, 2007 : http://www.geografie.nl/index.php?id=640tx_ttnews[swords]=giscHash=2f4cd4ee67tx_ttnews[tt_news]=611tx_ttnews[backPid]=502 King, Frank H. (1911). Farmers of Forty Centuries. Emmaus, PA: Rodale Press. Maddison, Angus (1998). Chinese Economic Performance in the Long Run. Paris: Development Centre of the Organisation for Economic Co-operation and Development. Perkins, Dwight (1967). Government as an Obstacle to Industrialization: The Case of Nineteenth-Century China. Journal of Economic History, 27(4):478-92. Riskin, Carl (1975). Surplus and Stagnation in Modern China. In Dwight Perkins, ed., Chinas Modern Economy in Historical Perspective, 49-84. Stanford: Stanford University Press. Wang, Gabe T. (1999). Chinas Population: Problems, Thoughts and Policies, 6, 28-29, 38-39. Aldershot: Ashgate. http://www.chinability.com/GDP.htm ONeill, B. and S. Scherbov (2006), Interpreting UN Urbanization Projections Using a Multi-state Model, Interim Report IR-06-012. (NYTIMES, 2009) http://www.nytimes.com/2009/04/11/world/asia/11china.html

Motivating Students Essay -- essays papers

Motivating Students The purpose of this research paper is to present research findings that show motivational teaching strategies to encourage the academic performance and achievement of students. Motivation is the drive on one’s thoughts and actions. Motivation is key to arouse the brain and to activate your senses. Motivation to learn is defined as, â€Å"The meaningfulness, value, and benefits of academic tasks to the learner.† (Lumsden, 1994). Students use motivation in the classroom to stimulate their learning capabilities. â€Å" Some students seem naturally enthusiastic about learning, but many need-or expect-their instructors to inspire, challenge, and stimulate them.† (Gross Davis 1993). To properly motivate one must understand a student’s behaviors. Behaviors that include the logical and illogical, the rational and irrational (Ames, 1984). Types of Motivation There are two different types of motivation in human behavior. The first is intrinsic. In this type of motivation a person does things because he or she wants to do them. â€Å"A student who is intrinsically motivated undertakes an activity ‘for its own sake, for the enjoyment it provides, the learning it permits, or the feelings of accomplishment it evokes† (Lumsden 1994). To make a student intrinsically motivated you must make the class relevant to them (Coolidge 1996). When a student realizes the benefits they will have in their lives by doing well in the class, they will be more eager to learn. The second type of motivation is extrinsic. This type of motivation is based on outside things. When a person does something in order to get something physical it is an extrinsic motivator. â€Å"An extrinsically motivated student performs ‘in order to obtain s... ...phies to motivate students. Seifert, K. (1999). Constructing a Psychology of Teaching & Learning. Boston, MA: Houghton Mifflin Company. This book explores how to reinforce motivation. Motivation that brings about success and failure. How to manage misbehavior. Tauber, R. (1998). Good or Bad, What Teachers Expect from Students They Generally Get. Retrieved November 16, 2003 from ERIC database. This article explains how not to let a child’s past or history affect your judgment of them, and how to teach equally to those who misbehave. Twenty Tips on Motivating Students. University of Nebraska Lincoln. Retrieved November 16, 2003 from http://www.unl.edu/gradstud/GSAP/motivstdnts.html Gives many tips for being an effective motivator. Wolk, R. (2003). Worlds Apart. Teacher Magazine, 14(5), pp.5. Retrieved September 24, 2003 from EBSCO database.

Managerial Finance Essay

ASSIGNMENT BMMF5103 MANAGERIAL FINANCE 15 July 2013 QUESTION 1 a) Maximizing shareholder wealth is a â€Å"moral imperative† for financial manager means managers are supposed to work for shareholders who are the actual owners of a company or corporation. Shareholders elect company directors who in turn hire managers to run the company on day to day basis with the view to make profit for the company. Managers are paid for their services rendered to the company whereas the shareholders own the company. As such morally managers should pursue policies that enhance shareholder value with the primary objective focused on stockholder wealth maximization. b) Managers make key day-to-day decisions to maximize shareholder value. But how do the owners of a business know that managers are operating to maximize shareholder value? This lack of information is known as the principal-agent problems. The agent performs the tasks on shareholders’ behalf yet the shareholders cannot ensure that the agent performs precisely the way the shareholders would like. Agency costs as related to a corporation refers to the costs of preventing agents (e.g. managers) pursuing their own interests at the expense of shareholders. There might be conflicts between shareholders and the company managers. Shareholders who are owners want the managers to make decisions which will increase the share value. Managers who receive salaries prefer to expand the business with the view to increase their salaries which may not necessarily increase the share value. Thus, agency costs tend to decrease the value of a corporation because the rising costs make the share price low when there is substantial debt involved. Costs of monitoring will increase and thus reduce wealth maximization of shareholders. c) Business ethics is the acceptable set of moral values and corporate standards of conduct in running a business organization. It includes proper business policies and practices such as corporate governance, as a check against insider trading, bribery, discrimination and covers corporate social responsibility and fiduciary responsibilities. Business ethics is a basic framework providing proper conduct, it may be guided by law or put in placeso as to gain public confidence and acceptance. An example of business ethics is when an employee lie to a potential client to get him to sign for services or purchase the product offered. Business ethics is important to a corporation because it will determine its reputation. It will give public confidence towards the corporation. It is essential for the long-term survival and success of the corporation in business. Implementing an ethical program will foster a successful corporation culture, values and enhanced profitability. Business ethics will also influence the way the corporations conduct its business and affect all including customers, employees, suppliers, competitors, etc. d) Advantages i) There is no maturity period in common stock. Thus, eliminating future repayment obligation and enhances the desirability of common stock financing. ii) There is no obligation for repayment of the funds. Instead, there are others to share the risk of the business investment with. Since there is no debt obligation, there is no finance fee. iii) Issuing common stock can increase firm’s borrowing power.The more common stock is sold, the larger the firm’s equity base. Therefore, the more easily and cheaply long-term debt financing can be obtained. iv) Once capital is raised through stock, the corporation is free to use the proceeds in any way it pleases. Disadvantages i) Involves high cost.It may be the most expensive form of long-term financing. Dividends are not tax-deductible and common stock is a riskier  security than either debt or preferred stock. ii) Potential effects of dilution on earnings and voting power. When a company or corporation issues more shares, its financial results must be divided by a larger number of shares, causing dilution. This is because selling of shares of the company means giving each investor a piece of ownership. Because they own the share of the company, the investors have the right to demand explanations and justifications for business decisions. iii) Market perception that management think. Management issues involve examining perceptions about management and perceptions by management. It includes various judgments regarding the competence of current and future management team as well as issues related to insider buying such as future strategies to increase operations and market share.When management makes large purchases of their own stock with private funds, investors may feel that the company is undervalued or that a favorable company event will occur soon. e) The three main users of ratio analysis i) Owners: The owners of a firm are mainly interested in the firm’s profitability, liquidity and hence survival. Therefore, they need financial ratios to test the performance of their company such as profitability ratios to find outwhether management is able to convert sales dollars into profits and cash flow. The common ratios are gross margin, operating margin and net income margin. The gross margin is the ratio of gross profits to sales. The operating margin is the ratio of operating profits to sales and net income margin is the ratio of net income to sales. The return-on-asset ratio, which is the ratio of net income to total assets, measures a company’s effectiveness in deploying its assets to generate profits. The return-on-investment ratio, which is the ratio of net income to shareholders’ equity, indicates a company’s ability to generate a return for its owners. These ratios are useful to owners of companies. ii) Creditors Creditors are interested in a firm’s ability to pay their debts over a short period of time.The ratio analysis will evaluate the firm’s liquidity  position. Creditors use liquidity ratio, which is the ratio of current assets to current liabilitiestogauge the ability of the company to pay its short-term bills. A ratio of greater than one is usually a minimum because anything less than one means the company has more liabilities than assets. iii) Management Management team comprising financial managers regularly use ratio analysis to evaluate financial policies and decisions they have made. It is the overall responsibilities of the management team to make sure available resources are used most effectively and efficiently and that the financial positions of the company is sound.Management uses profitability ratios to analyze the company’s ability to convert sales dollars into profits and cash flow. For example, the return-on-investment ratio, which is the ratio of net income to shareholders’ equity, indicates a company’s ability to generate a return for its owners. Examples of ratio formula: Example 1: Gross margin ratio Gross Margin = Gross Profit Revenue Gross profit and revenue figures are obtained from the income statement of a business. Alternatively, gross profit can be calculated by subtracting cost of goods sold from revenue. Thus gross margin formula may be restated as: Gross Margin = Revenue − Cost of Goods Sold Revenue Example 2: Operating margin ratio Operating income is same as earnings before interest and tax. Operating income and revenue figures is available from the income statement of a company. Operating Margin = Operating Income Revenue QUESTION 2 a) There are five different categories of financial ratios. They are: i) Liquidity ratio is used to measurecompany’s ability to pay its short-term debt obligations. As such, they focus on the firm’s current assets and current liabilities on the balance sheet.The most common liquidity ratios used is the current ratio mainly to give an idea of the company’s ability to pay back its short-term liabilities such as debt and payables with its short-term assets such as cash, inventory and receivables. ii) Debt ratio is used to measure company’s ability to meet its long-term debt obligations. The ratio indicates what proportion of debt a company has relative to its assets. The measure gives an idea to the leverage of the company along with the potential risks the company faces in terms of its debt-load. iii) Financial leverage ratio measure the extent to which a business or investor is using the borrowed money. A company having high leverage is considered to be at risk of bankruptcy in the event the company is unable to repay the debts. The most common financial leverage ratio is the debt-to-equity ratio calculated as total debt divided by shareholders equity iv) Asset efficiency or turnover ratios measure the efficiency a company uses its assets to produce sales. The most common asset efficiency ratios are the inventory turnover ratio, the receivables turnover ratio, the days’ sales in inventory ratio, the days’ sales in receivables ratio, the net working capital ratio, the fixed asset turnover ratio, and the total asset turnover ratio. v) The profitability ratios measure the company’s ability to generate a profit and an adequate return on assets and equity. The ratios measure how efficiently the firm uses its assets and how effectively it manages its operations. An example is the Net profit margin ratio is a ratio of profitability calculated as after-tax net income (net profits) divided by sales (revenue). It shows the amount of each sales dollar left over after all expenses have been paid. Limitations of financial ratios i) Although financial ratios can be effective tools for gauging financial performance and managerial effectiveness, they rarely provide answers. Ratios will not say why something is going wrong and what to do about a particular situation; they only pinpoint where a problem is. ii) There is no international standards on the use of financial ratios. Limitation of ratios interpretation emerges when a particular set of ratios of a company is compared to other company or business. For example, for calculating the inventory turnover one company may use the cost of goods sold as the numerator, while another may use its sales figures. A company may use the operating profit to calculate its total assets turnover, while another may use the net income after taxes. iii) Benchmark for assessing company’s financial position is needed. Different operating methodologies may be employed to run a company may render the comparison of financial ratios irrelevant. Example, a company prefers to lease most of its assets while another company may own them. Thus, some of the ratios, such as debt to total assets, fixed-charge coverage, total assets turnover, and return on total assets, would be unrelated. iv) The inflation factor can make the ratio of a particular company look good or bad. Inventory turnover may have deteriorated over a three-year period; the problem may not due to the increase in physical inventory, but rather, to increase in the cost of the goods. b) Effect of an increase in a company’s debt ratio to its return on equity. An increase on debt-ratio will be increase in the return of equity. If a company finances itself through debt, the creditors shoulder the risk. If the debt results in increased earnings, the return on shareholder investment is exponential. Total liabilities include both the current and non-current liabilities. The formula to calculate the debt ratio is: Debt Ratio = Total Liabilities Total Assets Return on Equity is expressed as a percentage and calculated as: ROE = Net Income/Common Equity c) Long-term interest rate = (RM13,000,000) (8/100) = RM1,040,000 Short-term interest rate = RM1,300,000 – RM1,040,000 = RM260,000 Short-term interest rate = RM260,000/RM1,546,000 = 0.168 Rate of interest on notes payable is 16.8% d) Changes in value of equity (in millions) (RM in millions) Shareholders’ beginning equity 537 Shareholders’ ending equity 485 Difference beginning & ending equity 52 Net income 128 Less: Paid dividends 57 Difference 71 Stock/shares purchased in the year (52+71) 123 Shares purchased throughout the year is RM123 million e) If the current ratio of corporation is 5.65 when industry average is 1.42, this disparity means that the corporation is having: i) an excess build-up in inventory. When the corporation holds a high level of inventory, it ties up business funds that could have been used in other areas such as in development or marketing. The cost of the inventory is not recovered by the corporation until it sells the inventory. ii) aged account receivables which is the amounts owed to the company by its customers. The corporation’s account receivables reports will identify problems with receivables management process and identify accounts that require collection action. QUESTION 3 a) Although ownership of stock represents ownership in a company, not all stock is created equal. Therefore there are two basic types of stock: common stock and preferred stock. Preferred stock is sometimes referred to as a hybrid security because it has features of common stocks and bonds. A company’s preferred stock trades independently of its common stock and offers preferred stockholders a different set of benefits. Preferred stocks paid amount of dividends just as fixed interest bond. It is not debt but equity like common stocks. b) Preferred stock par value of RM100 with annual dividend 10%. Annual rate of return is 11.5%. i) RM100 X10/100% = RM10. Yield of 11.5% 11.5%/100 = 0.115 = RM86.96 ii) As the risk-free rate increases, the required rate of return will increase and the price will drop. When rates increase, the price of the preferred stock will likely fall. If price falls, the issuer will likely call the preferred stock and replace it with a new preferred stock issue at a lower rate, conventional debt, or perhaps even common stock c) RM4.63(1+0.05)/(0.12-0.05) = 4.8615/0.07 = 69.46 The value of the company’s stock if the required rate of return is 12% is RM69.46 d) Before change in price per share, r =5% + (8% -5%) beta 1.3 = 8.9% After change in price per share, r = 4% + (10% – 4%) 1.5 = 13% Therefore, the change in price per share is RM4.87 e) Formula for constant growth is rs = r RE + (rm – rRE)b = 6% + 5% (1.4) = 13% 2013 = RM0 dividen 2015 = RM1.00 2016 = RM1.00 (1.2) = RM1.20 2017 = RM1.00 RM1.44 2018 = RM1.00 RM1.728 2019 = RM1.00 RM1.849 Calculate growth between constant rate = The price of the stock is RM20.16 QUESTION 4 a) Needs RM40,000/year during retirement period n = 10 yrs, i = 9 % PVA = PMT (PVIFA) = RM40,000 (9.129) = RM365,160 PV = RM365,160 (0.422) = RM154,097.52 The Mirians should deposit RM154,097.52 b) Model A: PV = PMT (PVIFA) = RM5,000 (3.993) = RM19,965 Model B: Year Payment (RM) PVIF PV 1 7,000 0.926 6,482 2 6,000 0.857 5,142 3 5,000 0.794 3,970 4 4,000 0.735 2,940 5 3,000 0.681 2,043 Total: 20,577 I would purchase/buy model A because it is cheaper by RM612 compared to model B. c) Which option to be chosen? Option 1 PMT = RM3,500/2.487 = RM1,407,318.05 Option 2 PMT = RM3,500/3.102 = RM1,128,304.32 Option 3 PMT = RM3,500/3.605 = RM970,873.79 The company should choose option 3 because lower by RM157,430.53 compared to option 2 which is second lowest d) Present value is exact invest of the compound interest calculations. Applying compound interest calculation is to find the future value of a present amount. Using the present value calculation a present value amount is found to be received in future. e) Over certain period the principle amount increases as a result of the installment payments resulting in lower amount of interest that is charged by the bank. QUESTION 5 a) When an investor buys a bond, the investor is lending money to the bond issuer, which could be a government, corporation, etc. The issuer promises to pay a specified rate of interest during the life of the bond and to repay the principal, also known as face value or par value of the bond, when it â€Å"matures,† or comes due after a set period of time. Thus bonds provide interest payment and principal payment. Payment of interest is done annually or semi-annually. Coupon payments are paid periodically. When bond matures a principal sum is paid which is a lump sum payment. b) Bond prices and interest rates are related. Interest rates and bond prices have â€Å"inverse relationship†, when one goes up, the other goes down. If interest rates is high enough, bond prices would fall. If interest rates is low, bond prices would rise. Prices of short-term bonds do not fluctuate  more often compared to long-term bond. Premium bond is sold when the stated rate of interests exceed the required rate of return. Example, if rates dropped to below original coupon rate of 7% for RM1,000 bond, it would be priced at a premium since it would be carrying a higher interest rate than what was currently available in the market. A bond will sell at a discount when the stated rate of interest is less than the required return. Bond is sold equal to the par value when the stated rate of interest is equal to the required return. c) Param does not have enough money to buy 10 bonds if the required rate of return is 9%. This is because the required rate of return which is 9% is less than the coupon rate of the bond which is 10%. The price of the bond is greater than the par value of RM1,000. Considering there are 10 bonds, the total price is greater than RM10,000. That is the reason why Param would not have enough money to buy the 10 bonds. d) FV = RM1,000 PMT =150 N = 10 PV = RM1,250 1/YR = 10.79% e) Interest rate risk is the risk of decline in bond values due to the increase in interest whereas reinvestment risk is the risk of an income decline due to a drop in interest rates. Bond holders who bought long-term bond is greatly at risk to the interest rate risk. QUESTION 6 a) [(RM18+RM4+RM3+RM2-RM24)/24] X 100% = 12.5%. Therefore, Billie jean’s realized rate of return during the three years holding period is 12.5% b) (i) Stock 1 8 + 0.8 (12 – 8) = 11.2% Stock 2 8 + 1.2 (12 – 8) = 12.8% Stock 3 8 + 0.6 (12 – 8) = 10.4% (ii) Stock 3 is undervalued due since E (R) ≠¥ RR c) Beta is the measurement for market risk which is non-diversifiable. The risk must be dealt with by the portfolio manager. Diversifiable risk should be diversified away by portfolio manager so that it would not pose a problem to the investment. As such all market risks is all relevant to the portfolio manager since it is his job and responsibility in balancing the likely risk and return. d) The situation suggest that investors are more risk adverse compared to before the shift taking place. On the portfolio, a risk premium of 11% (16% – 5%) is required whereas previously 10% (15% – 5%). If slope were to change downward, it means investors are less aversion to risk. e) Expected return: 0.9(12%) + 0.1 (20%) = 12.8% Beta: 0.9(1.2) + 0.1(2.0) = 1.28%

Palmers Limited Case Study

Cost's they overlook the quality. While BC tries to look pretty to their customer, Cost pay less attention to their look and more to provide the lowest prices for their members. From 1997 to 2001, Wall-Mart store numbers were increased by 53, Bi's stores went up by 50, but Cost went up by 91 . Cost's business strategy Is very simple, â€Å"To generate high sales volumes and rapid Inventory turnover by offering members very low prices on a limited selection of nationally branded and select private-label products In a wide range of merchandise categories† (Thompson, 2008) .They have able to implement this strategy very successfully. They have also been very successful in making their customer believe that product is a better quality than their competitors, interestingly their competitors in most cases don't carry the same kind of product. Cost's marketing strategy is simple yet effective, the idea of providing the lowest price and good quality product is a strategy to be reckon with. Plus there marketing idea of â€Å"Treasure Hunt† has allowed them to saved tons of money from broad advertisement.After a membership base Is established In an area, most new memberships came from word of mouth. This simple marketing and advertisement strategy has allowed Cost to keep Its marketing expenses low relative to those at typical retailers, discounter, and supermarkets. Cost is also known for its price strategy. They have become a master in providing top quality products even including some brand products at the lowest price possible to their customers.Instead of marking up their cap to 20 or 50 percent like their competitors they decided to cap their mark up to only 14 percent, which itself a key element in Cost's pricing strategy. This also indicates that Cost is trying to do what it takes to please their customer to increase their profits so they can make their shareholders happy at same time. It's this price strategy that has allows Cost to only only make profit over the year, but Increase their member to $110. Cost's product selection strategy Is also very Impressive. Unlike their competitor who carry from where from 40000 to 1 50000 SKU items , Cost decided to selecting Ana prove only auto mess I en last Includes everyday Items sun as kitchen supplies, Electronics, health and beauty products, automotive supplies, gasoline, games, cleaning supplies, canned goods, Food. They categories their product in commercial and professional use. Plus, Cost's treasure hunt merchandising strategy is also an attention grabber. Out of the 4000 items on the floor about 1000 were the treasure hunt product, meaning their prices with constantly changing.In most cases these were higher end products like furniture and TV. Cost's growth strategy is also quite remarkable. On average they have been opening about 20 to 25 new stores each year. Most of them in American but some internationally as well including; Canada, Korea, I-J, Japan, Canada, and Mexico. In recent year they experimented by opening independent Furniture store to sell high end bigger furniture items which resulted in good success. Later rather than opening more stores they instead added extra space about 45000 square feet to the Cost it self and called it Cost Home.Now the furniture category has become on of the tope 5 selling items on Cost's website. They are very innovative when it comes to their warehouse and management strategy. Cost's CEO, Jim Senegal, quoted, â€Å"Cost is able to offer lower prices and deter values by eliminating virtually all the frills and costs historically associated with conventional wholesalers and retailers, including salespeople, fancy buildings, delivery, billing, and accounts receivable. We run a tight operation with extremely low overhead which enables us to pass on dramatic savings to our members†. They stored the inventory on racks above the items being sold in the warehouse. That reduced their labor cost and saved them a lo t time on handling and stocking. They treat their manager as entrepreneur and allows them to decide what item should be sold in their store. They adored most of the inventory directly from the manufactures. It either came directly to the store or went to their distribution center called crosschecking depots. The point of these depots were to reduce the transportation cost by making sure all truck are full when they come the store.As an investor I wouldn't would want to invest in a company that has a good reputation, consistently growing, good sustainable growth, and good future plans. Let's talk about sustainable growth rate, which basically means that a firm can grow while keeping its profitability and financial policies unchanged. Sustainable growth model allows us to segregate reasons or changes that have led as a company to substantial growth so at the same time we can segregate the causes for those change. It is represented in four steps.