Personal Statement Example | Topics and Well Written Essays - 750 words - 25

Individual Statement Example Furthermore, data is the beginning, however not the completion point for basic reasoning. Information makes inspiration, without which individual can't think basically. To produce a mind boggling thought, you have to adjust a ton of realities, thoughts, messages, hypotheses, ideas. The capacity to think fundamentally has anybody at any age, understudies, however even first-graders aggregate enough understanding and information. Obviously, the kids 's capacity to think will in any case be improved with preparing, however even children can think fundamentally and freely. Talking about the commonsense side of this issue, I might want to refer to as the model driving a vehicle. Indeed it is a perplexing expertise that isn't yelling, similar to the capacity to ride a bicycle. Before I got in the driver's seat, I needed to pass a specific hypothetical preparing. It didn't required to retain certain standards, however it was desirable over see precisely how they work, where and why they are applied. The apprentice, who is driving the first run through, makes many superfluous developments, since he has no important abilities. During preparing I got them, however it was illegal to overlook the guidelines teacher. From the perspective of experienced driver every circumstance out and about is one of a kind in some degree and requires the driver to take brisk and ideal arrangements. Regularly the contention might be tackled not in one manner, however two, three or more, beginning from the choice of the course, speed, and heading of the alternate route. It requ ires to time to assess the traffic circumstance in entire with every one of its results. In each degree of concentrating there is a mind boggling territory of aptitudes dependent on basic activities. You should go to the large scale level to accomplish genuine outcomes. So also, in basic reasoning we once in a while make just a single basic thing. In this manner we need to consolidate or utilize a great deal of the essential abilities of basic reasoning. In any event, perusing can be called a movement on full scale level. At the point when we read, we

The Influence and Artistic Intent of Caravaggio Essay Example for Free

The Influence and Artistic Intent of Caravaggio Essay Michelangelo Merisi da Caravaggio, an Italian painter, known to be one of the most persuasive painters of the Baroque time frame. Known for his practical depiction of the human state, alongside the utilization of emotional lighting and exceptional utilization of tenebrism. While Caravaggio’s emotional lighting is notable, he was generally famous for his naturalistic and crude way to deal with depicting his subjects. With Caravaggio’s desperate propensities aside, this crude and uncensored methodology that he took drove him to turn into a scandalous painter of 89 pieces during his lifetime. Proof can be seen from future painters and even in photography, that Caravaggio is one of, if not the most persuasive painter to have come out of the Baroque time frame. Caravaggio didn't obtain this status effectively and, in actuality, carried on with a fairly stormy life. Conceived in Milan to Fermo Merisi and Lucia Aratori, Caravaggio carried on with a terrible life at an opportune time. He was stranded at a youthful age, and thus, wound up as a student to Simone Peterzano, to had been a previous understudy of Titian. This inevitably driven him to turn into an aide to different specialists in Rome, before setting out all alone. Caravaggio’s first principle commission was a progression of three momentous canvases gave to St. Matthew that he painted for the Contarelli Chapel in San Luigi dei Francesi. The most outstanding bit of workmanship in this arrangement is The Calling of St. Matthew. Caravaggio’s naturalistic style truly made its mark in this piece. Caravaggio painted the world how he knew it, and his pieces mirrored that. The subjects in his specialty were not admired, for example, the figures in High Renaissance workmanship. Nor were they mutilated, prolonged, or unmistakably exquisite like the figures ordinarily found in Mannerism workmanship. This naturalistic delineation of individuals was stunning and seen as radical. In particular, in The Calling of St. Matthew, Caravaggio took a strict scene and transformed it into a piece delineating normal looking individuals. Up until this point, individuals had never observed a holy subject delineated with regards to contemporary miscreant. This piece had components of sort scenes in it, which means it resembled a scene from regular daily existence. In any case, what is extraordinary about this gem is that it doesn't handily get mixed up as common or a basic classification scene. Keenly, this is a result of the signal that Jesus is providing for Matthew. The casual hand is suggestive of God’s deliver Michelangelo’s piece The Creation of Adam. Each part of this piece is done in such a wonderful way, that it overcomes any barrier between the exceptionally glorified and strict work of art of the High Renaissance and the normal heels of the contemporary time frame. This execution makes this masterpiece open and increased in value by the regular man. Not exclusively was Caravaggio’s naturalistic style getting obvious in this work, yet in addition so was his emotional and tenebristic style. Caravaggio sets up a specific measure of power and dramatization because of his dim and high-differentiate style. In addition to the fact that he establishes a specific air, yet this style likewise incorporates inside it. Through his Caravaggio’s utilization of tenebrism, Christ’s face becomes enlightens in obscurity scene to permit the watcher to see the second that He calls Matthew. In the event that Caravaggio did exclude this sensational utilization of lighting, it would lose its feeling of divineness. His objective was to make the Christian riddles open to each individual. While Caravaggio’s unconventional way to deal with hallowed stories was commonly generally welcomed, not all works of his were acknowledged during his time. An eminent masterpiece that was not increased in value by numerous individuals during his time was â€Å"The Death of the Virgin†. Laerzio Alberti dispatched Caravaggio to paint this piece for his family sanctuary in Sta. Maria della Scale, the recently developed church of the Discalced Carmelites. He was given a year to complete it, however at long last, it was dismissed. Current researchers with respect to why the image was dismissed. One explanation was that the Virgin was ill-advised. Her legs were uncovered, her lower legs and gut were swollen, and furthermore, she was concentrated from the enlarged body of a whore whom Caravaggio had relations with. This agonizingly naturalistic methodology raised him ruckus with clerical specialists. Different types of hypothesis clarify that, remarkably, the Virgin was appeared as dead as opposed to kicking the bucket, with not change of going to paradise. This conflicted with Caravaggio’s contract, which necessitated that he incorporate the traditional interpretation of Mary’s section from her passing to her Assumption. Different theories are given as a clarification with regards to why Caravaggio adopted the strategy that he did, yet all are just hypothesis and nothing has been affirmed. The general supposition a be made that Caravaggio adopted this strategy since it is simply the way wherein he moved toward the entirety of his pieces. He didn't want to admire anybody or anything and decided to introduce all scenes in such a naturalistic way, that it was receptive from all degrees of society. Caravaggio’s naturalistic and emotional style roused many, and his impact can w ithout much of a stretch be seen in numerous future artists’ works. After Caravaggio’s inconvenient demise, numerous specialists came to be viewed as his â€Å"followers† despite the fact that they never met or worked nearby the craftsman. While a few craftsmen imitated Caravaggio for a short time, others stayed focused on Caravaggio’s style for the span of their lives. These painters, marked as the Caravaggisti, imitated parts of Caravaggio’s style and strategy. These supporters were interested via Caravaggio’s lumpy authenticity and extraordinary utilization of lighting. An outstanding Caravaggisti would be Artemisia Gentileschi. Gentileschi by and by knew Caravaggio, and proof can be found in her work that he impacted her in a specific way. One of her increasingly popular pieces, Judith and Her Maidservant With the Head of Holofernes, has impacts of Caravaggio’s style in it. Most prominently is the solid utilization of tenebrism to make an emotional environment to the piece. Also, the figures are not admired and the subjects show up as normal scoundrels. Gentileschi was not by any means the only craftsman to show impacts of Caravaggio. Specialists, for example, Rubens and Rembrandt can likewise observe slight impacts of Caravaggio’s style in their work. It tends to be seen that Rubens received the strict topics and rawness of figures in his work. Alongside that, it tends to be seen that Rubens likewise embraced Caravaggio’s tenebristic style in a specific way. This can most remarkably be found in his piece, The Descent from the Cross. Rubens utilizes sensational lighting to concentrate on Christ to make a striking point of convergence. Rembrandt utilizes this procedure along these lines too. A prominent piece where impacts of Caravaggio can be seen in Rembrandt’s work is in the piece, The Blinding of Samson and The Nightwatch. The two pieces can be seen using types of tenebrism to make emotional climates. Not exclusively are these environments sensational, however Rembrandt additionally utilizes the light in a way where he makes a solid point of convergence, likewise to Rubens. Caravaggio didn't just impact the painters that came after him, yet in addition in photography of future hundreds of years. Notwithstanding assuming a key job in characterizing the seventeenth century, Caravaggio was to a great extent overlooked until enthusiasm for him recharged in the twentieth century while rising specialists were receiving methods and copying his style. The best purpose behind this was the well known development of the camera. In light of the immediacy and unequivocal quality of photos, individuals started to understand the best of Caravaggio’s craftsmanship once more. Likewise, Caravaggio had such a naturalistic way to deal with his works of art that the authenticity thus spoke to numerous picture takers. Alongside this, craftsmanship pundit Roberto Longhi brought Caravaggio’s name to the closer view, adulating him and saying, â€Å"With the special case of Michelangelo, no other Italian painter practiced so incredible an impact. † These two variables restored Caravaggio’s name in the mid 1900’s and caused individuals to understand his enormity. Additionally, there has been a lot of theory with antiquarians that Caravaggio even fused early photographic methods into his works of art. They state that he lit up models through a gap in the roof and the picture was anticipated on a canvas utilizing a focal point and a mirror; an early type of camera obscura. Alongside that, Caravaggio as far as anyone knows â€Å"fixed† the picture, utilizing light-touchy substances for around thirty minutes, during which he utilized white lead blended in with synthetic compounds and minerals that were obvious in obscurity, which he used to paint the pictures. Additionally, one of the components that were utilized in these blends was mercury, which delayed presentation to it can influence the focal sensory system, which can possibly cause crabbiness. Antiquarians follow this back to conceivably figuring into Caravaggio’s temper. While this is profoundly doubtful to be the reason for Caravaggio’s temper, it very well may be contended that it could have been an immediate factor. In any case, these developments of Caravaggio show the undeniable ability that he had and why he had such a great amount of impact of future craftsmen. Based on what was clarified, ends can be drawn that Caravaggio was one of the, if not the most persuasive craftsman of the Baroque time frame. With Caravaggio’s strong mix of naturalism and exceptional tenebrism, he made a style of dirty authenticity that intrigue to numerous individuals and enlivened crafted by future specialists. While Caravaggio’s irregular way to deal with his work was somewhat stunning, it likewise enlivened similarly the same number of. Proof can be drawn from future painters that Caravaggio’s style roused numerous masterpieces. Indeed, even in today?

First-Year Fellowship Consideration COLUMBIA UNIVERSITY - SIPA Admissions Blog

First-Year Fellowship Consideration COLUMBIA UNIVERSITY - SIPA Admissions Blog At SIPA all first-year applicants for the two-year, full-time MIA and MPA programs are considered for institutional fellowships. All that is required to apply for first-year fellowship is to submit an admission application. We do not require a separate application to apply for first-year fellowship. Due to the fact that we receive admission applications from citizens of over 100 countries each year we do not conduct admission interviews. We rely upon the information in each application to make both admission and fellowship decisions. The Admissions Committee awards institutional fellowships to approximately 10% of the incoming class each year. Every student who is admitted to SIPA is eligible to apply for second-year fellowship. In the spring of 2008 approximately 75% of second-year students chose to apply for funding through SIPA. Of that 75%, approximately 70% received funding and the average award was just over $18,000. Some students choose not to apply for SIPA funding because they have outside awards that cover their educational costs. Many students are able to combine external fellowships with institutional funds from SIPA. We highly encourage all applicants to pursue external funding opportunities and the sooner you begin the process, the more likely you are to find out about opportunities that fit your profile. If you have not already, we highly encourage all applicants to explore our external fellowship database.

Was Obama An Imperial President. . . . . Emma Hopkins.

Was Obama an Imperial President? Emma Hopkins Williams Economics (2) 10 February 2017 Despite having a democracy or republic as the foundation of the country, America’s most prominent leaders including the president can still undermine the idea of reasonability, fairness, and democracy right under their noses. Former President Barack Obama was elected on November 4, 2008, sworn in on January 20, 2009, re-elected on November 6, 2012, and sworn in for his second term on January 20, 2013. His last day in office was January 20, 2017. Obama’s presidency was full of many firsts: he is the first sitting president to publicly declare his support for same-sex marriage, †¦ However, Obama’s presidency was not†¦show more content†¦Not following a clear budget law is an example of Obama not faithfully executing the law. One of these budget laws is the Congressional Budget and Impoundment Control Act of 1974 which requires the president to submit a budget of the American Government â€Å"On or after the first Monday in January but not later than the first Monday in February of each year [†¦] for the following fiscal year.† Obama displayed his unconstitutional ways when he submitted his budgets after the specific deadlines given. He illegally missed his first budget proposal for 2010 by 98 days, he illegally missed it again for 2012 by a week, he illegally missed the budget submission again for 2013 by a week, he illegally missed the submission for 2014 by two months and six days, and he illegally missed the budget proposal for 2015 by a month and one day. The Congressional Budget and Impoundment Control Act of 1974 also requires the president to submit an additional summary of the budget before July 16 of each year for the same fiscal year as the ones previously mentioned. Obama again decided to not follow the clearly-worded law and displayed his unlawful behaviors by missing these deadlines as well as the January or February deadline: he unlawfully missed his first mid-session review for 2010

The Key to Successful Ivey Mba Essay Samples

The Key to Successful Ivey Mba Essay Samples Ivey Mba Essay Samples Options Authenticity is the secret to a great response Be technology ready. Make sure you record the answers on the complete screen. It's very valuable to take writing apart as a way to see just the way that it accomplishes its objectives. Such questions need deep introspection for you to get to the core of your nature and influences. It's far simpler to start the writing process when you've got a sample to inspire you. Practice the questions in a genuine recording atmosphere. Career goal is something which everyone ought to be setting no matter what career everybody is choosing. In general, you wish to follow all the tips we've provided above and one of these mistakes can be readily avoided! It's excellent to get that sort of approach when coming in the EMBA. Enjoy his helpful ideas and suggestions! This is a good example of a great career goals essay. Such essays could also consist of failure essays or essays that ask you to speak about an ethical dilemma that you may have faced. Stephen's essay is rather effective. Composing an appropriate career goals essay can be difficult should you not actually have any ambitions. Or conversely you can obtain an awful essay but still get in. The essays are supposed to present a distinctive picture of you. Before starting preparing your essays, you're requested to conduct an exhaustive self-assessment. Your MBA essays are your very best opportunity to sell the individual behind the resume. Ivey has the absolute most important scholarship fund in Canada, therefore it would be a mistake to self-select from the process before we've got an opportunity to review an application. I believe that if I become a cardiologist I would delight in these tasks and might not feel that my occupation is an enormous responsibility. Please don't hesitate to supply any extra information which you believe would be of help to the Admissions Committee in making the last decision on your application. The trouble is the fact that it's tough to articulate yourself to the MBA admissions committees in a manner that avoids the cliches and sets you far besides the crowd. Admissions officers would like to know about YOU. They want to know what excites you. Don't forget, in addition, there are discounts available when purchasing all 3 e-books and free shipping when purchasing all three text books. All you will need is things happening at and superior superior support. Whichever website you decide on, bear in mind that you pay for what you get. Discovering and picking a university that fulfills all my needs was a rigorous yet exciting endeavor. In the remainder of the essay, the author demonstrates how he becomes an observer. Stories are an essential part of the human experience. The author starts with a rather in depth story of an event or description of an individual or place. So consider your story. Therefore, to put it short, this essay on career goals can definitely determine your future once since if you don't persuade the possible employer they should hire you or the admissions board to provide you an opportunity to study at their college, you're losing a fantastic chance. Furthermore, education is the very best investment an individual can possibly make. You're a true individual, and it's fine to show it! Replace a number of the cliched language.

Three Strategies or Practices Identified in the Chapter Free Essays

Discuss three strategies or practices identified in the chapter that you feel are most important in planning, composing, and revising professional documents. Which of these do you use? Which part of the process do you spend more time on: revising, editing, or proofreading? Why? The three most important practices in planning, composing, and revising professional documents are: -Analyzing the problem, defining the purpose of the document, and analyzing my audience. -Provide accurate, concise, and complete information. We will write a custom essay sample on Three Strategies or Practices Identified in the Chapter or any similar topic only for you Order Now Getting feedback from someone else. Before beginning a document you must assess the purpose of your writing, and who your audience is. Once you know what you are writing about, and whom you are writing it to, then begins the formulation of ideas. I personally first review documents that relate to the topic and create key points to include in my writing. After you begin creating a thought process aligned with your writing, start free writing. During your free writing process, try not to deviate from your points. Provide accurate information, be concise and to the point, and complete your thoughts. Now that you feel you have drafted all the appropriate key points, and all the information you wanted to include, begin reviewing. During this review process, check for grammatical errors, conciseness, and that your thoughts are delivered for clear comprehension. Now that you feel you have created a professional document, put it to the test. Most important for me, is letting someone else read it. You may get some criticism, but better by one person than a large number of readers. At this time you can make the appropriate adjustments, and feel more confident in the message you are relaying. All the techniques I mentioned is the process I use to compose writing documents. These steps were helpful in my success as a proficient writer. Proofreading is the most important aspect, and what I spend most of my time on. This is your last chance to impress your reader and make sure your writing represents you, and shows your commitment to your work. Locker, K. O. , Kienzler, D. S. (2010). Business and Administrative Communication. New York, NY: McGraw-Hill/Irwin. How to cite Three Strategies or Practices Identified in the Chapter, Essay examples

Tangible or Intangible Essay Example

Tangible or Intangible Essay On his interview with Alex Bennet, Karl-Eric Sveiby, Professor of Knowledge Management at Hanken Business School in Helsinki, and principal of the Sveiby Knowledge Associates organization of consultants, gave some in interesting insights into his view of KM. The purpose of this paper is to study the major points that were discussed during this interview and their relevance to how KM can be improved.Knowledge Management has variously been described as a) the ability to collect, sort and store knowledge and thus make it accessible to other members of the business and b) a concept performs the same tasks as a with an organizations human skills, documents and other skills.Svieby emphasized that his understanding of knowledge management differed from other views, in that he saw is as a way of gaining business success by taking advantage of the collective people’s skills and knowledge available to the organization, both of employees and customers. He calls these the intangible asset s. This differs from the other held view of KM, which is more attuned to the collection and storage of information and knowledge. Svieby (2004) calls this â€Å"information management† and reveals that its usage has not been without its pitfalls, as has been seen in the IT sector of industry, for which he cited the Dot.com IT slump in 2002. The more people-based concept of KM suggests that it is not only the collection of information and knowledge that is important, but also the ways in which those who gain knowledge use it.The other important factor regarding KM was the transfer of knowledge and how to achieve this. In this regard computers and their standard programs have little use other than their ability to store and sort information. Svieby promotes the idea of computerized tools being developed to achieve these ends for business purposes. These would have a similar effect to flight and driving simulators, where knowledge gained from other people’s previous exper iences, together with information gathered and data on the subject, can be transferred to others who lack the experience and knowledge.Svieby also mentioned within the interview, the three-point strategy or concept that he has developed. This concept promotes the strategy that there are three type of areas from which knowledge can be sourced and where knowledge capital can be gained. Consumer knowledge, or Consumer capital, gained from customers provide information that will affect and influence the directions taken by the business marketers. Next comes knowledge from the internal structure of the business, which Svieby has named as â€Å"Structural Capital† and the final part of the triangle relates to human, or employee capital. With an amalgamation of these three areas, the business should be able to capitalize by introducing a business plan, which will lead to increased business success whilst at the same time addressing the needs and requirements of all of the business s takeholders.The major criticism that comes through in the interview is the way that others have tended to have utilized the term â€Å"Knowledge Management† for purposes that it is not specifically designed for, setting strict parameters for knowledge acquisition, rather than its core function, which is the transfer and subsequent use of knowledge.In conclusion the author’s opinion is that more understanding and research needs to be undertaken into the subject of Knowledge Management to ensure that businesses can address the root functions of the strategies that can be built upon this area of the business. Managed correctly, knowledge can add significant value to the success of a business.

How the Internet Has Changed The Traditional Home Buyer †Business Paper

How the Internet Has Changed The Traditional Home Buyer – Business Paper Free Online Research Papers How the Internet Has Changed The Traditional Home Buyer Business Paper In today’s day and age it is becoming much more accepted to explore and complete nearly every aspect of the real estate process online. From researching, to touring the house, to figuring out how much and what type of mortgage is best, the consumer can undergo nearly all of the steps to purchasing a house without ever leaving their computer. Many commonly performed tasks such as driving to various neighborhoods, scouring the phone book for realtors, and going to various lending institutions for assistance with a loan are not nearly as stressful and time consuming. All of this has opened the door for a new type of â€Å"ambitious consumer† when it comes to buying real estate online. The internet has vastly transformed the average home-buyer. There are many characteristics that online real estate buyers have in common. A study was released by the California Association of Realtors titled â€Å"Internet versus Traditional Buyer Study† that gave interesting insight into who exactly is the â€Å"average internet real estate consumer?†. A few highlights of the study concluded that the online consumer was more self-motivated, wealthier, younger, and more likely to be married (housebloggers, 2005). Some of the key comparisons are as follows: The average age of Internet buyers was 39 compared to 46 for traditional buyers. 9 out of 10 internet buyers were married compared to 8 out of 10 non-internet. 85% of internet buyers had a 4-year degree, 11% completed post-graduate work, whereas only 78% of non-internet buyers had a bachelors, 4% had completed any post-graduate work. Internet buyers had an average income of $185,088.00 and non-internet buyers had an average of $151, 190.00. Internet buyers spend three times as much (5.8 weeks) time considering buying a home before contacting a realtor than non-internet buyers (2.1 weeks). Internet buyers took only two weeks to select a house instead of the seven weeks the traditional buyer took. Due to the use of virtual tours, internet buyers only looked at an average of 6.2 homes with a realtor compared to the 14.5 homes a traditional buyer looks at. This study shows the obvious changes that are taking place in the real estate world. Buyers are getting younger, smarter, and much more ambitious. They are spending more time researching on their own, and needing less assistance from a realtor. What is it exactly that attracts these younger, smarter, educated buyers to the internet instead of dealing directly with a real estate expert? It’s simple, there is literally an encyclopedia of information on how to handle every step of the process all over the internet. Every major realtor’s web site has sections that you can learn all about the real estate buying process without even talking to a representative (century 21). You can investigate neighborhoods, find information on exactly how much a mortgage would cost you, and even get in touch with a representative when you are ready to make that final leap. Site’s such as Century 21’s homepage has a complete First-time Homebuyer’s Guide that you can read to inform yourself on some of the less-known or confusing factors that go into purchasing real estate. Other web site’s such as the home loan learning center provide a step by step checklist to walk you through the rigors of determin ing the right type of loan for you (MBA, 2004). Not only does can you use the internet to educate yourself on the ins-and-outs of buying real estate, but it is also a valuable tool to direct you to the places you need to go when you’re ready. You can get in touch with a realtor, mortgage counselor, loan officer or a host of other individuals that can help answer any questions you still may have. This can save a lot of time searching through the phone book trying to distinguish what services each realtor can provide, or who really knows what it is you are looking for. When it comes to buying a house, there’s one word that causes more confusion, frustration, fear and anguish. That word is â€Å"mortgage†. For almost every individual out there, a mortgage is an essential part of the home-buying process. However, it may be one of the most confusing parts as well. With all the different types of mortgages, how does one know what is right for them? In the pre-internet days, a person would have to sit down with a mortgage consultant or loan officer or whoever, and be educated on how the whole loan process works. With the advent of internet real estate a whole new breed of sites have been born. Not only can you find tons of information about mortgages on any real estate company’s web site, but there are many sites dedicated solely to helping consumers understand mortgages and how they work. Fixed Rate Mortgage The most common mortgage in use today is what’s known as a fixed rate mortgage. A fixed rate mortgage is defined as a mortgage in which the interest rate and payments remain the same for the life of the loan (MBA 2004). The fixed rate mortgage is one of the oldest lending tools and still one of the most widely used. A fixed rate mortgage is comprised of the principal and the interest. When you set up your repayment schedule you will have a set amount that you must pay every month until the balance is paid off. Your monthly payment will be paying off only part of the amount you borrowed and part of the interest, or what you are being charged to borrow the original loan amount. This predetermined monthly payment is locked in or â€Å"fixed† for the entire life of the loan, regardless of changing interest rates, or how much you are willing to pay every month. The most common fixed rate mortgage issued is the 30-year mortgage (MBA 2004). You can, however, set up a m ultitude of fixed rate mortgages such as a 15 or 20 year fixed rate mortgage. The main reason that the 30 year fixed rate mortgage is the most common is because it offers the lowest monthly payments. This allows for a higher likelihood of being approved and is geared toward borrowers that will be remaining in the house for a long time and would also like to keep their housing expenses consistent (MBA 2004). Another fixed rate mortgage that can be obtained is a 15-year fixed rate mortgage. This is almost exactly like a 30-year mortgage except that you will have significantly less interest to pay. The drawback of the 15 year mortgage is that it does require a higher credit rating and a much larger monthly payment (MBA 2004). One more uncommon fixed-rate mortgage is the Bi-weekly mortgage. This type of loan is great if you have the budgeting skills to make a half-payment on your monthly loan amount every paycheck. By making a bi-monthly payment every two weeks, you are actually making the equivalent of 13 full monthly payments (MBA 2004). This loan is also typically a 30 year term, but allows you to have it paid off long before the 30 years are up. The example below illustrates the potential savings one can have by using a bi-weekly payment as opposed to a typical monthly payment. Example: You have a mortgage with a monthly payment of $997.00 Total interest paid over the 30 year life of the loan: $209,263.00 Half payments of $498.00 ($997.00/2) every two weeks would result in 26 equal payments per month. This extra month allows you to pay off the 30-year loan in 22-23 years. Total interest paid over the 22-23 year life of the loan: $155,938.00. Total savings over the traditional loan: $53,325.00! Adjustable Rate Mortgage A far less common and more complicated lending tool is an adjustable rate mortgage. An adjustable rate mortgage is defined as a mortgage loan or deed of trust, which allows the lender to adjust the interest rate in accordance with a specified index periodically, and as agreed to at the inception of the loan. Also called variable rate mortgages (VRM) (MBA 2004). ARM’s can be a bit more confusing because they require an understanding of a few more terms that dictate exactly how and how much the monthly payments of the mortgage can change. Some of the key terms to understand before getting into an ARM are as follows: The adjustment period: The length of time which dictates interest rate adjustments on an adjustable rate mortgage. A six-month ARM would have an adjustment every six months. The index: A published interest rate, such as the prime rate, LIBOR, T-Bill rate, or the 11th District COFI. Lenders use indexes to establish interest rates charged on mortgages or to compare investment returns. On ARMs, a predetermined margin is added to the index to compute the interest rate adjustment. The margin: In an adjustable rate mortgage, the spread between the index and the mortgage interest rate. Index rate + Margin = Your ARM Annual Percentage Rate (APR): A term defined in section 106 of the federal Truth in Lending Act (15 USC 1606), which expresses on an annualized basis the charges imposed on the borrower to obtain a loan (defined in the Act as finance charges), including interest, discount and other costs. Interest Rate Cap: A limit on interest rate increases and/or decreases during each interest rate adjustment (adjustment period cap) or over the term (life cap) of the mortgage. *Definitions come from the home loan learning center web site ARM’s come with many different adjustment periods, margin rates and caps. It is important to consider each of these variables when selecting the right type of ARM for you. Hybrid and convertible ARM A hybrid and convertible mortgage is a mortgage that interchanges between a fixed-rate and adjustable-rate mortgage. One convertible is a mortgage that starts with a fixed rate for a period of time (2,5,10 yrs) and then converts to an annual adjustable-rate mortgage for its remaining life. Conversely there is the convertible mortgage that begin as an adjustable rate mortgage and can be converted into a fixed rate after an agreed payment period. You typically have to pay a fee when you convert the mortgage and most of the time the fixed rate you pay is slightly higher than the going rate for fixed loans (MBA 2004). To sum it all up, here is a list of the most common mortgages used today. Below the type of mortgage is some pro’s and con’s for each. Fixed-rate mortgages 30-Year Fixed Pros: Lower monthly payment Most affordable More cash/savings because payment is lower; easier to bear if the homeowner has repairs to make or comes upon hard times; extra cash allows homeowner to make other investments since cash isn’t tied up in the mortgage Cons: Longer term Pay more interest Costs more than shorter term mortgages over the life of the loan 15-year fixed Pros: Shorter term, own your home in half the time (allows you to own your home before your children start college or before you reach retirement) Often the total interest paid over the life of the loan is lower, less than half the total interest of a 30 yr Cons: Bigger monthly payment Qualification may be difficult because the income requirement is higher Bi-weekly Pros: Loan is paid off much more quickly Interest savings is significant Often automatically deducted from your checking account Cons: Must be able to budget and make the half-mortgage payment every two weeks Adjustable Rate (ARM) Pros: When interest rates go down, payment goes down Initial interest rate can be as much as 2 to 3 percent lower than a comparable fixed rate mortgage Homeownership is more affordable Qualifying is easier Lower initial interest rate compared to fixed-rate mortgages, which can make homeownership more affordable and make qualifying for a mortgage easier. And if interest rates decline, your mortgage payments decline as well. Cons: When interest rates go up, payments go up The potential for higher monthly payments if interest rates increase Requires more budgeting discipline Convertible Mortgages Hybrid and convertible ARMs Pros: Advantages of an ARM with the ability to convert to a fixed-rate mortgage If you don’t convert, it’s a regular ARM Cons: If interest rates are at a higher level, when its time to convert, you may not want to go with it *Info from home loan learning center Research Papers on How the Internet Has Changed The Traditional Home Buyer - Business PaperAnalysis of Ebay Expanding into AsiaPETSTEL analysis of IndiaThe Relationship Between Delinquency and Drug UseThe Project Managment Office SystemHarry Potter and the Deathly Hallows EssayIncorporating Risk and Uncertainty Factor in CapitalOpen Architechture a white paperRiordan Manufacturing Production PlanStandardized TestingResearch Process Part One

Treat Self-Publishing as a Business †Interviewing Elise Kova

Treat Self-Publishing as a Business – Interviewing Elise Kova "Treat Self-Publishing as a Business" – Interviewing Elise Kova We often hear that "the golden age of self-publishing is gone", so we like to use our blog to remind authors that, no, that's not true. There are many more indie success stories than the ones you repeatedly hear about out there, and Elise Kova's is one of them. She started writing in 2013, as a hobby, on Fictionpress. She now has 5 books out in her Air Awakens Series and the first one has over 500 reviews on Goodreads. In this interview, she shares  more about her writing process, why she self-published, and some advice for newer authors.Hi Elise! It’s such a pleasure to have you join us for the Reedsy blog. I want to start off by talking a bit about how you came to write the Air Awakens series. YA fiction has captured the heart of the public in the last few years  Ã¢â‚¬â€œÃ‚  what is it about the YA fantasy genre that really appeals to you as an author?I love talking about books, so thank you for reaching out to me for this interview!I honestly didn't set out thinking tha t I was going to be a "YA Author". I've always loved writing, but I stopped doing it avidly for about four or so years during college and my MBA. When I sat down to write Air Awakens I didn't do so with the intention of being published, I just wanted to enjoy writing a story that I would want to read myself.When I began looking into publication later I toiled over if Air Awakens was "Adult" or "Young Adult" and the young adult age bracket fit better. I think there is something timeless about the "coming of age" story that we see in so much young adult fiction and many, myself included, are drawn to that. So I'm not surprised Air Awakens developed in that direction.Young adult readers can, and hopefully do, sympathize with and recognize the struggles of the protagonists. Whereas older readers remember going through those times themselves. Even more than that, I think people are constantly evolving and the questions of "Who am I?" and "What do I want?" may be more apparent during the transition into adulthood, but never really go away no matter how old we get.One of the things the series is most commonly praised for is its worldbuilding. The Solaris Empire, the Bond, the elemental magic – all of it is so well-developed! Was this a world you thought up quickly when you started actually writing Air Awakens, or had it been living and growing in your mind before that?I'm awful at planning, it's actually something I'm working on doing more in the future: pre-drafting. So much of the Air Awakens world was built as I went. As a result, there were a lot of things that didn't make sense when all was said and done; directions I thought I may take but never explored, or elements that didn't add anything.The series has gone through extensive rewrites before publication and at that point I really sat down and investigated the world and its mechanics. I cut a lot and refined the rest. 50 Book Marketing Ideas Every Author Needs to Know Read post Most indie authors struggle with getting their books discovered. What is the most important thing that you have done in terms of marketing that you think is responsible for your success?Oh, questions like this are so difficult to answer, as it's all speculation. But I think, for me, I've tried really hard to be both genuine and available to my readers. I'm constantly on my social media outlets and I'm not really shy on them when it comes to saying what I think, what I'm geeking out about, or what I'm up to. The bookish community on Twitter, Instagram, blogs, etc, is full of such amazing people that I've been so so lucky to meet.Follow Elise Kova and Reedsy on Twitter:  @EliseKova  and @ReedsyHQWhy did  you choose to self-publish? What would be  your advice for newer  authors looking to become the next "indie success story"? Do share your thoughts, or ask Elise any question, in the comments below!

Options for Organization Assignment Example | Topics and Well Written Essays - 500 words

Options for Organization - Assignment Example Even though there are many advantages in implementing security systems in organizations there are some problems also. Therefore, the implementation of security should be done in an efficient manner, taking into consideration of all relevant factors relating to the business and the flew of information therein. Even though it is difficult to implement security, it is an inevitable part in any organization. Security enables an organization to manage the risks within the organization. The problems in an organization can be reduced to a great extent with the help of proper security measures. A company’s data can be kept confidential only if it has good security policies. The development and implementation of security policies helps an organization to meet the international standards. â€Å"Security touches so many different areas of business," says Allan Carey, program manager of security services and identity management research at Framingham, Mass.-based IDC. "With any type of new initiative or initiatives being driven by lines of business, security needs to be involved" (Kaplan). The analysis of security is done to recognize the exposure of security in a systematic way. Organizations should also be capable of evaluating the security methods adopted by their partners. The growing nu mber of threats has increased the importance of security in an organization. There can be both internal and external threats to any organization. Many organizations have suffered major losses due to the lack of security and leakage of information into unauthorized hands. Hackers, internal spying etc have become common in organizations. Proper security measures are needed to tackle these threats. The awareness about security requirements is thus very essential for every organization. There are some difficulties in setting and implementing a proper security system in an existing organization. It necessitates more funds to be invested for the implementation of

Strategic Management for Dell Case Study Example | Topics and Well Written Essays - 2500 words

Strategic Management for Dell - Case Study Example This will help to come up with new production and operation mode that will take the company back to the top. In its earlier operation, the success of the company has been based on the two aspects that helped it to gain competitive advantage in the market. The first aspect was in its product model. While most of its competitors remain with the earlier production model where they would manufacture computers ready for sale, Dell utilized the post-fordism model of production in which products were tailored to the needs of the consumers. The end of the production process for other competitors acted as the starting point of production for Dell. This was an important process that helped it to keep track of the manufacturing process and ensured that the company had the control of the process right from the start to the time the product was delivered to the consumer. It was a production process that is lead by the descriptions of the consumers. However this had an effect on lowering the innovative part of the company. While other companies worked to develop computers that assumed new features, Dell remained to wait to the customer description in order to tailor made the products. (Darlin, 2006) The other aspect of growth for the company was the price advantage that it had over the other competitors. In this case the production model which ensured that the company had less expenses when it came to inventory control and therefore was able to market its product less. The marketing strategy for the company also helped to eliminate middle men in the process and delivered the product right from the company to the customer. This also reduced the price of its product. These are two of the strategies that the company should be working on in the new strategy. They are strategies which helped it to grow and which can also help it to acquire a large segment of the market again. Which are the specific areas that the companies need to address in its new strategy There are number of areas that the company will need to emphasize on in order to reclaim its market and to prosper in growth. These areas include the production process, marketing and meant penetration and diversification. Production process There are minor changes that need to be made in the production process. While the production process has helped the company to cut a competitive edge in the market, it has not been effective in helping it to address the various changes that arise in the operation environment. The production strategy was useful in the beginning when the level of completion was low but it has been losing its effectiveness with time owing to changes taking place in the environment. The production process was sensitive to the market the production cost and it helped to deliver production on time to the consumers. This shows that it helped to meet the demands of the consumer in having products made to their demand and to suit their tastes. But the competitors have been working on new strategies to beat this model while not copying the Dell production model. They have been banking on production of styled computers with many enhancement with are new to the consumers. Rather than going to ask from the consumer what they want so that they can tailor made computer for them, they have been

Pressure on Development Land in the South East of England

Pressure on Development Land in the South East of England The need for sustainable architecture. Abstract The purpose of this dissertation is to discuss and evaluate the pressure on development land in the South- East of England, and how that pressure relates to the need for sustainable architecture. The reasons for there being pressure on development land in the South-East of England will be described and analysed, as will any differences with the other regions of Britain. The reasons for setting aside or using the available development land and why sustainable architecture should be adopted in the South-East of England will be fully evaluated. As will be demonstrated there are various and competing factors that apparently increase the pressure to make full use of all available development land in the South-East of England. The available development land in the South-East of England is in high demand to be used for the construction of domestic housing, as well as for commercial, leisure, and industrial building programmes. To a large extent central government and local authorities have attempted to control the construction of such new building programmes through systems of urban planning, as well as building regulations that have applied across the whole of Britain. The reasons why the South-East of England should have a need for sustainable architecture will also be examined in depth. The case for making all the new construction projects designed around the concepts of sustainable architecture shall also be examined, to discuss whether more environmentally focused building designs will lessen the impact of new construction programmes, as well as reducing long-term pollution. Introduction Sustainable architecture and the use of development land are closely linked with the practices and theories of what form the basis of urban and rural planning, as well as ideas concerning the necessity for long-term environmental sustainability. Urban, and to a lesser extent rural planning, became more widespread in their application throughout Britain after 1945, when increased levels of central government intervention were experienced in many social and economic fields. Planning was deemed to be the best way of solving Britains housing problems (Taylor, 1998 p. 3). Increased levels of urban and rural planning were justified at the end of the Second World War due to the need for extensive post-war reconstruction. The South-East of England in general, and London in particular had suffered from widespread bomb damage, which meant that fully or partially destroyed houses, factories, and retail units had to be replaced by well planned buildings which would be an improvement upon the pre vious buildings. In the immediate post-war period it was believed that a systematic use of town and country planning would be essential for the reconstruction of Britain, with a much higher standard of building to match higher employment, the welfare state, and the National Health Service. The purpose of these policies and institutions was to prolong life and promote good health throughout the whole population (Meller, 1997 p67). The increased use of urban and rural planning was not intended to protect the environment in an ecological way, or indeed to promote sustainable architecture, rather it was greatly expanded in scope to make the most rational use of scarce development land. However, there would be measures adopted which would conserve large areas of countryside, and give protection despite the need to re-house millions of families in 1945 (Southall, 2000 p. 336). There were groups that wished to conserve specific areas that supported rare forms of animal and plant life, and even groups that wished to preserve old historical buildings, as well as buildings distinguished by their architectural styles (Meller, 1997 p67). When added together such groups did not equate to an ecological lobby that intended to change agricultural, architectural, or industrial practices to protect the environment. These groups however, were able to heavily influence the decision to restrict urbanisation taking over the countr yside. Post-war reconstruction was the catalyst for the largest programmes of publicly funded construction in Britain. Public expenditure was needed due to the sheer scale of reconstruction required, with London and the South-East of England being a major beneficiary of those programmes. Architecture and planning were used for these large-scale programmes rather than just for individual buildings. The involvement of central government in the promoting and funding of large-scale public building programmes and the use of development land was high until the early part of the 1970s (Greed, 1996 p. 35). Such wide-ranging building programmes were not only intended to replace the buildings destroyed during the Second World War. The post-war building programmes were also intended to replace the slums in the inner cities of London, Birmingham, Liverpool, as well as elsewhere. The construction programmes were intended to make the South-East of England a much more hospitable place to live in, just as the rest of Britain was also intended to be like (Sheail, 2002 p. 62). New construction and renovation of existing houses was an imperative, as ‘2 million of them condemned and another 3 million lacking in essentials (Southall, 2000 p. 337). The South-East of England also benefited from the construction of new towns such as Milton Keynes and Stevenage that were planned as entire towns with purpose built domestic housing and business premises. The Atlee government was so keen upon the creation of new towns to solve the post-war housing shortages that it regulated such construction throug h the New Town Act of 1946 (Sheail, 2002 p. 62). The construction of the New Towns was considered to be essential for both high economic growth and for solving the national post-war housing shortage. The Atlee government regarded the new towns as being highly beneficial to peoples health as they moved away from major cities and industrial areas to places with cleaner air (Meller, 1997 p67). In ecological terms such construction was harmful to the environment as more land was built upon and it meant a greater amount of pollution from traffic emissions, though of course nobody understood such implications at that time. Improvements in transport infrastructure and increasing levels of car ownership meant that the new towns were economically viable, as well as allowing their inhabitants to commute to the major cities to work in them (Daniels, Bradshaw, Shaw, Sidaway, 2005 p. 147). Urban planning was thus considered to be very useful for the progress and development of London and the South-East of England, which traditionally has been the most populous and prosperous region of Britain. Urban planning was also intended to increase the prosperity levels of the other regions in Britain to be as high as possible to match the levels achieved in the South-East of England (Southall, 2000 p. 337). Controlled expansion of urban areas into the new towns was intended to solve the imme diate post-war housing shortage and revive the British economy, whilst leaving the great bulk of the countryside untouched by new housing construction (Taylor, 1998 p.3). Previous improvements in agricultural techniques meant that farming became more efficient nationally which had quickened the pace of urbanisation in Britain as a whole. Urbanisation in Britain had already had a strong impact upon the environment that went beyond the replacement of the countryside with polluting factories and unhealthy slum housing (Southall, 2000, p. 335). Higher crop yields from less land had the consequence that more land in rural areas became available to be used as development land. The greater availability of former agricultural land meant that is was easier to find enough land to construct new towns or expand existing cities across Britain. Urbanisation was a process that was accelerated by the need of industrial towns and cities to find workers to continue their expansion (Goudie Viles, 1997 p. 5). To begin with, the majority of new homes were traditional style houses that formed large council house estates right across the country, in architectural terms there was very little innovation or thought given to making the new housing stock architecturally sustainable or environmentally friendly. More attention was instead devoted to making all new houses comfortable, clean, and ensuring they were being built to last (Greed, 1996 p. 35). The new homes were intended to be better and larger than the ones that they had replaced. The majority of large cities and the new towns in Britain had millions of council houses built in their areas between 1945 and the early 1970s. However, it was much harder to find adequate amounts of development land in inner city areas which led to the building of high rise tower blocks which allowed a greater number of people to be housed without increasing the total area of the development land required (Sheail, 2002 p. 62). Unfortunately, high rise tower bl ocks constructed during the 1960s and the 1970s in the South-East of England, as well as nationally failed to be an adequate form of long- term and sustainable architecture that allowed people to be housed in safety or comfort. The failure of many high rise tower blocks to be sustainable forms of housing had the affect of increasing the pressure on development land. It has also meant that tower blocks have had to be refurbished or more frequently demolished (Meller, 1997 p. 63). As the picture below shows the 1950s and the 1960s also witnessed the construction of low-rise apartment blocks which have proved to be longer lasting than tower blocks built during the same period of time. The picture is of apartment flats constructed in Ham Common in Richmond between 1955 and 1958 (Frampton,1997 p. 266). Although the amount of new housing construction was considerable not all the available land had been developed or built upon. Land remained set aside for agricultural purposes, whilst other land was left un-built upon and not always used for farming. The land that was left alone and was set aside and thus not allowed to be used for domestic housing or industrial sites were referred to as the green belt. The green belt was created to act as a buffer zone between urban and rural areas as a means to limit urbanisation (Greed, 1996 p. 82). Central government set aside areas that were designated as green belt zones to preserve the countryside nationally as well as solely in the South-East of England. Although, it was possible to build on green belt land the process of gaining planning permission from central government and the relevant local authority was a long drawn out one which deterred most property developers and construction firms from doing so. Local interest groups have often bei ng highly vocal in their opposition to any schemes that have been suggested (Clapp, 1994 p. 138). Clapp estimated that with national parks and designated green belt zones that in England and Wales ‘more than a fifth of the countryside now has stringent protection against development (Clapp, 1994 p. 140). Therefore, the bulk of available development land was concentrated in urban areas, often referred to as brown field sites (Greed, 1996 p. 82). For central government there are advantages for using brown field sites (Kim Rigdon, December 1998 p. 5). For instance, using such sites allows for economic regeneration, employment creation as well as less pressure to build on green belt land. Recycling land on brown field sites is a method of preserving rural areas being used as development land (Clapp, 1994 p.139). The pressure to use greater amounts of development land has arguably increased significantly in recent years throughout Britain as a whole. The pressure to use development land has risen due to a combination of social, economic, and political factors. For instance, in social terms the demographic changes to the British population have had significant, and it could even be argued,profound effects upon the demand for development for new construction programmes. These demographic changes have occurred as a consequence of the British population ageing, the increasing number of adults who live on their own, as well as the major increase in the number of immigrants who have settled in Britain in the past decade or so. These changes have meant that more people within Britain are seeking a higher number of places to live in. Another reason for the raised levels of pressure upon development land is caused by the potential financial gains from building new houses, as well as new retail or indu strial complexes. The level of financial gains that could be made has been boosted since 1979 by the shifting away from the publicly funded housing programmes to a market led approach to determining the rates of new housing construction and the ownership of existing housing (Allmendinger and Thomas, 1998 p. 5). Of course even greater numbers of domestic homes and retail premises has a knock on effect on the amount of infrastructure such as schools, hospitals, and roads which are required in Britain as a whole. The building of new forms of infrastructure will only increase the environmental impact of new construction programmes (Kim Rigdon, December 1998 p. 5). A fuller explanation and a more comprehensive examination of the increased pressures on the development land in Britain in general will be presented in the specific chapter on development land. The more detailed evaluation of the pressures upon development in the South-East of England will be presented in the specific chapter about the South-East of England. Not only has there been pressure to use more development land in Britain generally and in the South-East of England in particular, there has been more pressure for new construction programmes to use building techniques and technology linked with sustainable architecture. Sustainable architecture may have been a concept, which started in the United States, yet it could be very important to put its ideas into action across the globe (Kim Rigdon, December 1998 p. 5). The notion of sustainable architecture is in itself influenced by ideas about making or enabling architecture maximise the utility and the subsequent life span of all new construction, whilst minimising the amount of resources needed in the initial construction and the maintenance of buildings. Sustainable architecture, when possible, uses resources that is renewable, recyclable, and biodegradable. There are various motivations for adopting sustainable architecture when it comes down to the construction and the completion of all new building programmes. Motivations that include the minimising of development land used, as well as making use of new technology to conserve energy, the conservation or recycling of finite resources, as well as reducing the levels of water consumption. Reducing the level of pollution and attempting to slow down the consequences of global warming are also factors in the promotion and implementation of sustainable architecture (Kim, Rigdon, Graves, Augus t 1998 p. 5). Of course, there is the influence of legislation upon the use of sustainable architecture techniques to reduce the environmental and ecological impact of new construction programmes. Property developers and construction firms have to comply with measures to protect theenvironment introduced by the British government and the European Union (Hough, 2004 p. 190). As will be shown in the specific chapter about sustainable architecture the majority of methods used to improve environmental sustainability are relatively straightforward to incorporate into the designs of new building programmes, and in some cases into existing buildings. Sustainable architecture could be achieved by using construction materials that are less damaging to the environment, or materials that have been obtained from recycled and renewable resources. Making buildings as environmentally sustainable as possible during new construction projects (as will be examined in greater depth) will achieve the over all objectives of those that practice and argue for the implementation of sustainable architecture. It is most practical to install features or equipment which enhances environmental sustainability during new construction projects rather than afterwards. The pressures to adopt sustainable architecture in many ways are contradictory, yet are also connected with the pressure s to raise the levels of development land used up for new building programmes. Other motivations for adopting sustainable architecture include applying measures that are requirements for gaining planning permission, as well as ensuring that all new buildings comply with all the minimum standards for safeguarding the environment set by the British government and also by the European Union. The British government has set standards for domestic and retail buildings since the 1950s. For instance, to rid London of its previously renowned smog and fog by reducing smoke emissions from domestic homes and factories alike under the auspices of the Clean Air Act. The European Union has taken a greater interest in promoting environmental sustainability since the 1980s, believing that such actions to protect the natural environment on a regional rather than a national basis would be far more effective in doing so (Hough, 2004 p. 190). Chapter One Literature Review ‘Urban Planning and the British New Right, by Allmendinger and Thomas was primarily used as a source of reference for the ways in which the Conservative governments between 1979 and 1997 altered housing and economic policies in Britain. This book also contained information about the introduction of more extensive government environmental protection policies, which were started during that period of Conservative administration. The book demonstrates the contradictions between the strong Conservative support for free market economics and the increasing understanding that central government needed to act to protect the environment. Brian Clapps ‘An Environmental History of Britain from the Industrial Revolution is a good source of information with regard to development land and the impact of the green belt zones on limiting building programmes to already urbanised areas. The book provides a useful insight into the establishment and the continued maintenance of green belt zon es in modern Britain. ‘An introduction to Human Geography – Issues for the 21st century by Daniels, Bradshaw, Shaw, and Sidaway proved a useful source of information about development and the environmental impacts of human activity such as constructing buildings and using fossil fuel in buildings. The book assists in explaining why such impacts on the environment would provide a catalyst for sustainable architecture. ‘Modern architecture – a critical history by Kenneth Frampton was used as a source of pictures and reference for information about architectural styles and building materials. There was also a brief section concerning the planning of the new town constructed at Milton Keynes during the early 1970s. ‘The Earth Transformed – an introduction to Human Impacts on the Environment by Goudie and Viles was used to obtain information about development land and the impact of unsustainable architecture and building techniques upon pollution levels and global warming. The book contained information about the harmful consequences of global urbanisation and industrialisation. ‘Cities Natural Process – A basis for sustainability, by Michael Hough was a useful reference book for discussing development land and issues that relate to enhancing environmental sustainability. This book was also useful because there was a greater focus upon Britain within it. The book contained suggestions and examples of how sustainability could be achieved with the help of sustainable architecture. ‘Sustainable Architecture: Introduction to Sustainable Design by Kim and Rigdon is an article which explores the theoretical and practical background to sustainable architecture. It was used to gain information for the chapter, which dealt with sustainable architecture specifically. That information was also for the chapter concerning the need for any new construction programmes in the South-East of England to embrace sustainable architecture. ‘Pollution Prevention in Architecture – Introductory Module by Kim, Rigdon, and Graves provides further theoretical and practical insights into the ideas contained within the notion of sustainable architecture. This article contained strong arguments as to why sustainable architecture should be implemented across the world and not just in a single specific region of one particular country. This article proved a sound reference for the chapters concerning sustainable architecture and the necessity of its use in the South-East of England. ‘Towns, plans, and society in modern Britain by Helen Meller was used to gain background knowledge of the establishment of a more vigorous and restrictive planning regulatory framework brought into operation after the end of the Second World War. That information was then included within the introduction and the specific chapter dealing with the pressures upon the use of development land. ‘Urban and Environmental Planning in the UK, by Yvonne Rydin provides useful information concerning the protection of the environment through planning regulations and restrictions. Provides good reference material as to how the British government and the European Union have attempted to reduce environmental damage through restrictions on development land and building or other regulations to cut pollution and enhance sustainability. ‘A History of Britain 3, End of Empire 1776 – 2000, by Simon Schama was used to gain information as to why the Conservative party did not overturn the extended provision of council houses introduced by the Atlee government until after 1979. The book also had information about the ideological changes that Margaret Thatcher brought into Britain and the consequences of such changes. ‘An Environmental History of Twentieth Century Britain by John Sheail was a book, which discussed the developments within the environment of Britain between 1900 and 2000. Sheail examines how the understanding of environmental issues in Britain developed in the latter part of the twentieth century. The book was informative in relation to the development of policies that were intended to protect the environment and promote sustainability. ‘The City – In time and space by Aidan Southall was a book used to assist with the description and evaluation of the use as well as the restrictions placed upon the availability of development land within Britain. Southalls account in particular provided information concerning the effective regeneration of brown field sites within the immediate vicinity of London besides providing an insight into the construction of the new towns in the aftermath of the Second World War. ‘Ecological Architecture: A critical history by Steele provided some useful practical and theoretical information about the concepts and the designs of sustainable architecture. ‘Life Cycle Analysis for Automobiles, by Sulivan and Hu was used solely for the data concerning the amount of energy needed to produce aluminium, polyethene, PVC and steel, comparing the consumption to produce the materials new with when those products are recycled. ‘Urban Planning Since 1945 by Nigel Taylor was a highly useful source of information with regard to the development and the continuation of planning restrictions as well as building regulations. The information about the uses of town and country planning besides the motivations for the establishment and the continuation of green belt land areas was of great use. Taylor also included some succinct information about environmental sustainability within this book. Brenda Vales ‘Green Architecture: Design for a Sustainable Future is a good introduction to the concepts and the designs most strongly linked with sustainable development. Chapter Two Development Land Prior to the start of the twentieth century there was very little formal or legal regulation or planning undertaken when it came down to the use of development land. There was in effect little to prevent the construction of new building programmes, let alone notions about limiting the size and the scope of such programmes to protect the environment or promote ecological sustainability (Taylor, 1998 p. 3). Central government by and large did not intervene to prevent individuals, businesses of various sizes, or indeed local authorities from using development land in any way that they wished to do so. The central government was willing to permit any parties to construct new buildings upon such development land, especially if the party responsible for constructing such buildings already owned the land, which was been built upon (Greed, 1996 p. 2). The freedom with which new buildings could be built was demonstrated by the ability of the majority of landowners to choose the style of architecture in the construction of their homes, factories, or shops. Landowners had the option of making their buildings as grand as possible or as cheap to construct as possible (Kim Rigdon, December 1998 p. 5). They did not have to consider that their right to build on their land would be restricted by the location of that land in relation to the nearest city or its place in the countryside. Landowners and their architects did not believe that there was any profound need to change what they built or how they built it in order to protect the environment and promote sustainability (Sheail, 2003 p. 2). Those building regulations that did exist were generally very minimalist in their actual nature, and were usually introduced on an ad hoc basis. Architecture and the development of land were more likely to be influenced by changes in technology or improvements in economic development, as well as change in fashion and styles (Meller, 1997 p. 63). For instance, these houses started to have gas, electricity, and water supplies installed. These supplies of utility services were regulated by the central government (Daniels, Bradshaw, Shaw, Sidaway, 2005 p.115). Those services were also supplied to factories and shops, which were increasingly subject to health, and safety standards that were intended to prevent accidents, yet paid no attention to the land that they happened to be constructed on (Sheail, 2003 p. 2). The nineteenth century witnessed a quantum leap forward in the amount of land, which was built upon due to a raising population as well as increased levels of industrialisation . These factors happened to coincide with the development of improved infrastructure such as roads, railways, sewage systems, public hospitals, and schools. The development of such infrastructure required large quantities of land, labour, and resources to be successfully completed, whilst in turn promoting higher levels of industrialisation and the migration of people from the countryside to the expanding cities. Some cities and regions benefited economically from such industrialisation more than others did. In Britain, industrialisation benefited the regions surrounding Birmingham, Manchester, Liverpool, and Glasgow. Over all though London and the South-East of England retained their position as the most prosperous region within Britain. Industrialisationcame at a cost, namely pollution and greater levels of social inequality (Southall, 2000 p. 335) . The development of gas, electricity, and water supplies alongside sewage systems made domestic houses more comfortable to live in and factories more productive due to having greater efficiency (Daniels, Bradshaw, Shaw, Sidaway, 2005 p.115). Before a system of urban and rural planning were introduced there was no specifically set aside development land. Market forces determined the use of land and what if anything was built upon it. If landowners found that their land was most profitably used for agricultural purposes then it would remain as agricultural land (Taylor, 1998 p. 3). If, however more money could be made from building houses, shops, or factories on their land, then that is what usually happened to that land. Landowners could also be tempted to sell their land to property developers, construction firms, or industrial enterprises if they were lucky enough to own land that those other parties felt in urgent need of developing (Meller, 1997 p. 62). It was market forces that drove the industrial revolution in Britain as well as also promoting the process of urbanisation. The processes of industrialisation and urbanisation meant that cities such as London, Birmingham, Manchester, and Glasgow greatly expanded in ter ms of both their geographical areas and their total population levels, which led to shrinkage in the size of rural areas in Britain as a whole (Southall, 2000 p. 335). It was also market forces that determined the location, size, and scope of housing, factories, and commercial buildings. There were no limitations to the size, location or scope of such buildings, and absolutely no attention was given to the environmental consequences of these building programmes (Sheail, 2003 p 2). The absence of building regulations and restrictions on the use of land meant that there was a great deal of unhealthy and substandard slum housing, which caused widespread illness. Illness occurred besides reflecting the poverty of those people that were unfortunate enough to have to live in such areas (Daniels, Bradshaw, Shaw, Sidaway, 2005 p.115). Planning regulations would have undoubtedly improved conditions, for instance introducing proper sanitation into the slums or having substandard housing replaced by higher quality houses for people to move into (Southall, 2000 p. 335). In rural areas fears that heavy industry and unsightly slums would eventually over take all the land within their close proximity prompted the foundation of organisations dedicated to the physical preservation of the countryside, the rural way of life, and its wildlife (Clapp, 1994 p. 138). The countryside preservation organisations would eventually have a strong influence on the establishment of the gree n belt zones and the restricted availability of development land in the more predominantly rural areas of Britain (Allmendinger and Thomas, 1998 p. 55). It was after the end of the First World War that the central government and local authorities took a greater interest in the construction of housing and how land was actually being used in domestic housing and industrial or commercial construction programmes. The role of the market in deciding how many houses were built and the location of where those houses were constructed was reduced with the development of council houses (Taylor, 1998 p. 3). The provision of affordable housing built by local authorities and subsidised by central government funding meant that there was increased public involvement in the determination of land usage. The use, abuse, or the non-use of land was no longer solely determined by market forces. The involvement of central government and local authorities was intended to reduce poverty, ill health, and social exclusion. At no point in the inter-war period were measures taken to introduce town and country planning with the intention of protecting the environ ment or promoting sustainability as nobody considered such steps were necessary. The First World War had only witnessed very minimal levels of property damage caused by German naval attacks and bombing raids on Britain, so there was no widespread need for urgent reconstruction programmes as there would be at the end of the Second World War (Clapp, 1994 p. 138). The central government first took legislative measures to restrict the use of development land within the remit of the Town and Country Planning Act of 1925, although planning decisions were usually left to individual local authorities to be e

Foreign exchange risk Essay

Toyota Motor Corporation is the world’s third largest automaker. It was established in Japan on 28 August 1937. Apart from its 12 plants in Japan, Toyota has 54 manufacturing companies in 27 countries, employs 246700 people and markets vehicles in more than 160 countries. Its capital as at March 2002 was 397 billion yen. Toyota is exposed to the fluctuation in foreign currency exchange as it operates mainly in America, Continental Europe and Britain. It is therefore affected by the fluctuation in the value of the US dollar, the Euro and to a lesser extent the British pound. Toyota’s consolidated financial statements, which are presented in the Japanese yen, are affected by the foreign exchange fluctuation, as all the amounts in the various countries’ currencies have to be translated into yen. Toyota’s primary markets based on unit sales for vehicles for financial year ended March 31 2002 were Japan (40%), North America (32%) and Europe (13%). Toyota is listed on the London, New York and Tokyo stock exchanges. In the normal course of doing business, Toyota employs derivatives financial instruments, including forward contracts and foreign currency options to manage its exposure to fluctuation in foreign currency exchange rates. Toyota does not use derivatives for speculation and trading. (http://www.toyota.co.jp/en/ir.html accessed on 14th November 2002) The profitability of Toyota’s operations is affected by many factors including the changes in the value of the Japanese yen against other currencies which Toyota does business. The financial year for Toyota is from 1 April to 31 March. IMPACT OF FOREIGN EXCHANGE RISK ON OPERATION The value of the Japanese yen has fallen generally for the past three years against the dollar and the Euro though there had been periods of  fluctuations. (http://pacific.commerce.ubc.ca/xr/data.html accessed on 14th November 2002). Changes in foreign exchange rate affect Toyota’s revenue, gross margins, operating costs, operating income, net income and retained earnings. Toyota’s cost and liabilities are affected by transaction exposure which relates primarily to sales proceed from Toyota’s non domestic sales produced in Japan. It is also affected to a lesser extent sales proceed from Toyota’s continental Europe sales produced in UK. Toyota’s use of forward exchange rate contracts and currency options is to hedge foreign exchange risk associated with trade receivables denominated primarily in U.S. dollars. Toyota also engages in foreign currency settlements with domestic counter parties. The company enters into forward contracts and purchases currency options (principally euro and dollar) to hedge certain portions of forecasted cash flows denominated in foreign currencies. Additionally, the Company enters into forward exchange contracts to offset the earnings impact relating to exchange rate fluctuations on certain monetary assets and liabilities. The Company enters into forward exchange contracts as hedges of net investments in international operations. This reduces foreign exchange risk and transaction costs in those settlements by handling receipts in the foreign currencies in which they are denominated. Toyota buys supplies from Peugeot in France and is therefore exposed to the Euro exchange rate. It also manufactures engines in Japan for BMW. These inflows and outflows as a result of dealing with these European companies expose Toyota to foreign exchange risks. Cars produced in Japan and other production sites are shipped to Europe and America, which are the major market for Toyota. Toyota has to make a decision as to which currency to price the cars. If the cars are priced in yen in order to avoid foreign exchange risk, Toyota will not be competitive in those markets, as it would have shifted the risk to its customers. If the price is in the domestic currencies Toyota will be exposed to foreign exchange risk. When there is a depreciation or appreciation of the currencies in relation to the yen, Toyota will be torn between changing the price to reflect the change in the exchange rate. This decision will depend on the price elasticity of demand  for cars among other factors. Toyota manages these risks by using forward contracts, money market hedging and option market hedging. Toyota also enters into currency borrowing to address a portion of its transaction risk. Foreign exchange forward contracts are used to limit exposure to losses, resulting from changes in foreign currency exchange rates on accounts receivable and transactions denominated in foreign currencies. Foreign exchange forward contracts, which are designated and effective as hedges of currency, risk on existing assets and liabilities are included as an offset to foreign exchange gain or loss and recorded on the existing assets and liabilities. Foreign currency option is to reduce the risks that are likely to be incurred on account receivable and anticipated transactions denominated in foreign currencies. This has reduced, but not eliminated, the effects of foreign exchange fluctuation. The preparation of Toyota’s consolidated financial statements is in conformity with accounting principles accepted in the United States of America. All assets and liabilities of foreign subsidiaries are translated into Japanese yen at the appropriate year end current rates and all income and expense accounts are translated at rates that approximate those prevailing at the time of the transaction. Toyota therefore uses the temporal method of translation. The resulting translation adjustments are included as a component of accumulated income. Toyota is exposed to translation risk when the results of subsidiaries are translated into yen. The value in yen may not reflect the true value of the subsidiary, as it will also depend on the exchange rate between the two countries at the time of the translation. This can distort significantly when results of different periods are being compared and among various geographical markets. The yen has been stronger in fiscal year 2000 as against 1999. According to Toyota’s Annual Reports, net revenue increased by 6.1% in 1999 and decrease by 0.4% in 2000. If the difference in yen used for translation purposes are eliminated, net revenue would have increased by 5.9% in 1999 and increased by 11.2% in 2000 (http://www.toyota.co.jp/en/ir.html accessed on 14th November 2002). Thus, even though the consolidation figure showed a decrease in net revenue in 2000, it was mainly due to the strengthening of the yen in 2000, which made dollar values smaller after translation. The value of the yen against the Euro and the dollar fell generally for the past three years. The fall of the yen for the past three years has made Toyota reported profit when it is translated into yen though in actual fact it may not have been so. Toyota’s net revenue for fiscal year 2002 showed a 9% increase over the previous year. This is because of the weakening yen and the translation effect. If the difference in yen value used for translation purposes is eliminated, Toyota showed only 2.8% increase. Net revenue increased by 15.5% in North America, 24.8% in Europe and 0.4% in Japan, for fiscal 2002 compared to 2001 after consolidation. If translation effect is eliminated, the net revenue in North America increases by only 2.2% and 12.9% in Europe (http://www.toyota.co.jp/en/ir.html accessed on 14th November 2002). There was a double digit devaluation of the yen to the dollar in the business year ended March 31 2002. Toyota gained 70 billion yen from favourable exchange rate. The US dollar rose to about 127 yen from about 123 yen a year ago. A strong dollar helps the earning of Toyota by boosting the value of overseas revenue when converted into yen. However, translation effect is a reporting consideration and does not affect Toyota’s underlying operation. Toyota does not hedge against translation risk. Toyota manages its operating exposure by diversifying its operation and financing. It has localised much of its production by constructing production units in most of the countries in which it operates. Local operation allows Toyota to purchase most of its supplies and resources used in the production process in currencies that matches the currencies of local revenue with local expenses. Toyota has asked its UK suppliers to settle all bills using Europe’s single currency, the euro (http://news.bbc.co.uk/1/hi/business/873840.stm accessed on 16th November 2002). This reduces its exposure to changes in the value of the pound. Toyota has diversify its finance base by being able to raise funds in more than one place and thereby take advantage in interest rate differentials. Toyota can therefore borrow in Japan, United States of America or Europe to take advantage of interest rate differentials. With the expected fall in the American Interest rate as against the Japanese interest rate, Toyota can borrow in dollars so as to take advantage of the fall in interest rates. The  expected fall in American interest will lead to a fall in the value of dollars in relation to the yen. This fall will make loans and other commitments denominated in dollars less expensive in yen terms. Toyota will therefore gain from the expected depreciation of the dollar. The most obvious source or determinant of economic currency exposure comes from firms having revenues or costs denominated in foreign currencies. These direct or transaction effects are relatively easy to identify and manage. In addition, firms that also have foreign-based operations will have translation exposures that arise from consolidation. At the same time, there are also a number of indirect effects, which can be just as important and apply both to firms engaged in international business and to domestic firms, but which are substantially more difficult to recognise. This indirect economic currency exposure arises from unexpected movements in foreign exchange rates changing the competitive situation of the firm and which affect the firm’s future cash flows (and hence value). GLOBAL ECONOMIC FORECAST INFLATION DIFFERENTIALS The exchange rate stated simply is the price of one currency in terms of another currency. Exchange rate can therefore be expressed in terms of the law of one price which states that â€Å"in the presence of a competitive market structure and the absence of transportation cost and other barriers to trade, identical products which are sold in different markets will sell at the same price in terms of a common currency† (Pilbeam, K. (1992) International Finance, Macmillan). Relative purchasing power parity says that the change in the price level of commodities in one country relative to the rate of change in price levels in another country determines the exchange rate between the two countries. This in other words means that the rate of inflation in one country relative to another determines the rate of change in their respective currencies. (Ross et al, 1999). Thus if there is higher inflation in one country in relation to others, prices of goods and services will increase in th at country in relation with others and exchange  rates have to change accordingly in response to inflation differentials. According to the World Economic Outlook of the International Monetary Fund (http://www.imf.org/external/pubs/ft/weo/2002/02/pdf/appendix.pdf accessed on 14th November 2002), inflation is expected to move from -1.40% in 2002 to -1.2% in 2003 in Japan. This is 14.3% rise in inflation in Japan. Inflation in United States of America is expected to move from 1.2% in 2002 to 1.9% in 2003. American inflation is expected to increase by 58.3% whereas inflation in the Euro area is expected to decrease by 17.4%. This means that prices of goods and services in America will increase more than prices in Japan whiles prices in Europe is expected to decrease. The expected increase in the prices in America will lead to the depreciation of the dollar against the yen in order to maintain the purchasing power parity. The relative decrease in the level of inflation in Europe as against Japan will lead to the appreciation of the Euro against the yen. The yen is therefore expected to appreciate against the dollar but depreciate against the Euro. This will affect Toyota’s revenues and profits, as whatever amount is translated from dollar to yen will be lower comparatively. However, it will gain when the Euro is translated, as values will be higher after translation. BALANCE OF PAYMENT Balance of Payment measures the flow of economic transactions between the residents of a given country and the residents of other countries during a certain period of time. The use of balance of payment data to forecast foreign exchange rates assumes a fixed exchange rate regime. The balance of payment suggests that the current account get worse as national income rises. This is because the increased income will lead to increased income will lead to increased demand for goods and services including foreign products. This will lead to an increased demand for foreign currencies and a decrease in the value of the domestic currency. The basic tendency is for domestic currency to weaken to pay for the increased imports. In a fixed exchange regime, when this falls below certain limits the domestic government will have to intervene by selling resaves of foreign currencies in the foreign exchange market (Buckley, A. 2000). The same is with surplus where instead of selling foreign currencies, the government will buy foreign  currencies. This will increase demand or supply of foreign currencies and therefore affect the price i.e. the exchange rate. Thus if domestic income levels were to rise, the increase will lead to transaction demand for money which means that if the money stock and interest rates are held constant, the increased demand can only come about through a fall in domestic prices. The fall in domestic prices will then requires a depreciation of the currency to maintain purchasing power parity. However, an increase in foreign income levels leads to a fall in foreign prices level and therefore a depreciation of the home currency to maintain purchasing power parity (Pilbeam 1993). If there is increased demand for Japanese goods and services by Americans and Europeans then the yen is likely to appreciate, as the demand for yen will increase. However, under a floating exchange system, the government has no responsibility to peg the exchange rate. The fact that the overall balance does not sum to zero will automatically alter the exchange rate in the direction necessary to obtain a Balance of Payment close to zero (Eitman et al). If the country is running a substantial current account deficit whilst the capital and financial account balance is zero, it will have a deficit Balance of Payment. There will be excess supply of domestic currency and the market will rid itself of the imbalance by lowering the price through the depreciation of the currency. INTEREST RATE DIFFERNTIALS The interest rate parity theorem implies that if interest rates are higher domestically than in a particular foreign country, the foreign country’s currency will be selling at a premium in the forward market; and if interest rates are lower domestically, the foreign currency will be selling at a discount in the forward market (Ross et al 1999). The link between interest rate and exchange rate is explained by the International Fisher Effect, which holds that the interest rate differential is an unbiased predictor of future changes in the spot exchange rate (Rugman et al 2000). This differential is also important in determing forward exchange rates because this rate would be that which neutralises the difference in interest rates between the two countries. If the interest rate of one country is expected to fall in relation to another country, this will make the demand for  financial instruments denominated in that currency to fall. This fall in demand for financial instruments will lead to a fall in demand of that currency and therefore a depreciation of that currency. However, if interest rates are expected to rise in relation to other countries, there will be an increase in demand for financial instruments denominated in that currency and an appreciation of the currency. In practical terms, the international fisher effect implies that while an investor in a low interest country can convert his funds into the currency of a high interest country and get paid a higher rate, his gain (the interest rate differential) will be offset by the expected loss because of foreign exchange rate changes. The recent announcement of a fall in the American interest rate whilst the Japanese interest rate remain constant will lead to a fall in the demand for dollar denominated instruments and therefore a fall in the value of the dollar in relation to the yen. The Euro interest rate is not expected to change and therefore the exchange rate between the yen and the Euro may not change on the basis of interest rates. RISK MANAGEMENT STRATEGIES â€Å"Toyota uses a value-at-risk analysis (â€Å"VAR†) to evaluate its exposure to changes in foreign currency exchange rates. The value-at-risk of the combined foreign exchange position represents a potential loss in pre-tax earnings that are estimated to be  ¥25.2 billion as of March 31, 2001 and  ¥24.0 billion as of March 31, 2002. Based on Toyota’s overall currency exposure (including derivative positions), the risk during the year ended March 31, 2002 to pre-tax cash flow from currency movements was on average  ¥25.0 billion, with a high of  ¥26.7 billion and a low of  ¥22.9 billion. The value-at-risk was estimated by using a variance/ covariance model and assumed a 95% confidence level on the realization date and a 10-day holding period. Toyota changed the model used for calculation of value-at-risk from â€Å"variance/covariance† method to â€Å"Monte Carlo Simulation† method because Toyota introduced a new system, which Toyota considers more effective for risk management purposes. The prior year amounts have been restated to the fiscal 2002 presentation.† (Toyota Annual Report 2002) LEADING AND LAGGING. Larger, more centralized corporations have additional options that may be employed to help control the foreign exchange risk of inter company transactions. One effective and potentially profitable approach involves leading (prepaying) payments when the payer’s currency is devaluing against the payment currency and lagging those payments if the payer’s currency is appreciating. Lagging is when a company pays its financial commitments late so as to take advantage of a devaluing currency. Leading on the other hand is paying early before a currency devalues. It serves as a means of shifting liquidity between subsidiaries to avoid bid – ask spreads and take advantage of interest rate differentials (Clark E. et al 1993). Toyota should take advantage of the fall in the interest rates in United States and subsequent expected fall in the value of the dollar. The American subsidiary should pay early all monies owned to the parent company in Japan. This will give a higher value than waiting for the dollar to devalue before paying. From a company wide standpoint, the treasurer can direct leading and lagging policy in order to take advantage of the favourable effects of exchange rate fluctuations. Additionally, leading and lagging policies may be used to shift funds from cash-rich to cash-poor affiliates, thereby improving short-term liquidity. However, leading and lagging is only possibly when the company has 100% ownership of the subsidiary. This is because the effect of an extended or reduced payment date alters the relative rate of return of each subsidiary. This is unfair to minority shareholders, as they do not necessarily benefit from such a practise that benefits the multinational as a whole. (Eiteman et al 2001). Toyota’s subsidiary in the US has minority shareholders like General Motors and these will be at a disadvantage if Toyota should use leading and lagging to manage its exposure. Inequality may arise unless the adjustment is made to reflect a subsidiary’s sacrifice. NETTING. Netting inter company transfers is another form of international cash management strategy that Toyota can employ. It requires a high degree of centralization. The basis of netting is that, within a closed group of related companies, total payables will always equal total receivables. Netting is useful primarily when a large number of separate foreign exchange  transaction occur between subsidiaries (Eiteman et al 2001). Thus instead of Toyota paying monies owed to and by each subsidiary, the subsidiaries can net off each others debt and thereby not deal in the foreign exchange market. In order to reduce the bank transaction cost, such as spread between foreign exchange bid and ask quotations and transfer fees, Toyota should establish an in house netting centre. The exposure that remains–net payments to payees–can then be hedged in the forward market if desired. The advantages of netting are  · A reduction in foreign exchange conversion fees and funds transfer fees as commissions on foreign exchange transactions and funds transfer are drastically reduced.  · A quicker settlement of obligations reducing the group’s overall exposure. REINVOICING. Reinvoicing goes one step beyond the centralized approach of multilateral netting by way of a clearing centre. A reinvoicing centre buys goods from the manufacturing subsidiary or parent, without taking possession, and reinvoices other company affiliates or third parties when it sells the goods. By conducting all transactions in the affiliate’s functional currency, the reinvoicing centre bears all currency risks. This prevents the FC exposures from distorting the subsidiary’s operating profit (loss). In addition, the reinvoicing centre allows for centralized cash flow management, increase international business expertise and opportunities for arbitrage. The centre also improves and centralizes banking relationships and acts as a central purchasing agent for subsidiaries. Most important, the reinvoicing centre can assess its net position on all inter company transactions and hedge in the forward market accordingly. Problems with reinvoicing centres are * Some countries prohibit reinvoicing centres, as well as any third-party billing (for example, France, Spain,). * They are very expensive to set up because sophisticated information systems and legal and tax expertise are required. BACK TO BACK LOANS Back to back loans is when two firms arrange to borrow money in each others currency so as to avoid the risk associated with exchange rate fluctuation. Toyota can enter into an agreement with an American company that has a subsidiary in Japan. Toyota can then lend yen to the Japanese subsidiary of the American company and the American company in turn lends Toyota’s American subsidiary money in dollars. This will reduce the risk that Toyota will have had if it had lend the money to its American subsidiary as the expected fall in the value of the dollar will have reduced the amount of yen to be received. The advantage with back to back loan is there will not be the need to change currencies as loans will have been contracted in the functional currency of the subsidiary and therefore there will be no risk. However it is very difficult to get a partner who will be prepared to enter into such an arrangement. NATURAL HEDGING Natural hedging is to manage an anticipated exposure to a particular currency by acquiring a debt denominated in that currency. Thus if a firm has a long term inflow in one currency, the firm can acquire an outflow in the form of a loan in the same currency and use the inflow to service the debt. Since Toyota’s main markets are the USA and Europe, it can take out loans in Euro or dollars and use the proceeds from its operations to pay for the loan. Toyota will then not have to bother about the exchange rate fluctuation, as it will be paying the loan from proceeds generated from local operations. Toyota is also asking its British suppliers to bill them in the Euro so as to reduce the risk. This is effective in eliminating currency exposed when the exposure cash flow is relatively constant and predictable over time (Eiteman et al 2001) FORWARD CONTRACT Forward contract is an agreement to exchange currencies of different countries at a specific future date and at a specific forward rate (Eiteman et al 2001). If Toyota has receivables denominated in US dollars in the form of loans owed to the parent company, it can enter into a forward contract to hedge against the expected fall in the value of the dollar. When the value of the dollar depreciates, Toyota will therefore not be at risk. However, should the predictions not come true and the dollar rather appreciates, Toyota would have lost the opportunity of earning more on the spot market. REFERENCES 1. BUCKLEY, A. (2000) multinational finance. 4th ed., Harlow : Financial Times Prentice Hall. 2 CLARK, E. LEVASSEUR, M. ROUSSEAU, P. (1993) international finance, London : Chapman and Hall. 3 PILBEAM, K. (1992) international finance, Basingstoke : Macmillan Education. 4 RUGMAN, A. M. (2000) international business: a strategic management approach, 2nd ed., Harlow: Financial Times/Prentice Hall. 5. EITEMAN, D.K., STONEHILL, A.I., MOFFETT, M. H. (2001) Multinational business finance, 9th ed., 6.ROSS, S.A., WESTERFIELD, R., JAFFE, J. (1999) corporate finance, 5th ed., London: McGraw Hill. 6. (http://www.imf.org/external/pubs/ft/weo/2002/02/pdf/appendix.pdf accessed on 14th November 2002), 7. (http://www.toyota.co.jp/en/ir.html accessed on 14th November 2002) 8. (http://pacific.commerce.ubc.ca/xr/data.html accessed on 14th November 2002) 9. (http://news.bbc.co.uk/1/hi/business/873840.stm accessed on 16th November 2002)