Kaylee's Idea Dump

Stupid Idioms

2009-06-02T11:46:00.000-07:00

I'm sick of hearing people say "aim for the sky cuz if you fall you'll be amonst the stars". There are so many things wrong with that statement from a scientific and cool-person standpoint. First of all, since when did you become a pussy dreaming about the stars. Secondly, there are no fucking stars in the sky. At best, you'd be among the clouds which all look like my fucking penis. Just remember that next time someone says that quote to you.

Strategic Analysis of Power Corporation of Canada

2009-04-22T17:43:00.000-07:00

Worldwide Power:

A Strategic Analysis of Power Corporation of Canada

EXECUTIVE SUMMARY 2
2.1 HISTORY 3
2.2 STRATEGIC GOALS 3
2.3 ORGANIZATION CHART 3
EXTERNAL ANALYSIS 4
3.1 THE GENERAL ENVIRONMENT 4
Global 4
Demographic 4
Political/Legal 4
Economic 4
Socio-cultural 5
Technological 5
3.2 THE INSURANCE INDUSTRY 5
3.4 TURNING THREATS INTO OPPORTUNITIES 7
INTERNAL ANALYSIS 7
4.1 VALUE CHAIN ANALYSIS 7
PRIMARY ACTIVITIES 7
4.2 FINANCIAL RATIOS 7
4.3 TURNING WEAKNESSES INTO STRENGTHS 8
STRATEGY FORMULATION 8
5.1 KEY ISSUES 8
6.2 DECISION CRITERIA 9
RECOMMENDATION 10
IMPLEMENTATION 10
POWER CORPORATION OF CANADA - ORGANIZATION CHART 11

Context
2.1 History
Power Corporation of Canada (Power), Canada’s fourth largest company in revenues , was founded on a vision. In 1925, facing foreign takeover threats from the U.S. in the Canadian electric industry, two Montreal under writers – A.J. Nesbitt and P.A. Thomson – took action to protect Canadian power utilities. They established Power Corporation of Canada, a holding group that would consolidate Canadian power companies under an umbrella organization. Over the years, Power began picking up considerable interests in power utilities across Canada and expanded globally with interests in the United States, Brazil, and China. Throughout the 1950s and ‘60s, Power was deeply hit by a trend of nationalized energy and diversified into other industries such as pulp and paper and finance. In 1968, Paul Desmarais joined the company in a merger and would be Power’s CEO until 1996. This would be the beginning of Power’s strategy to hold large, concentrated investments in a diverse portfolio and to leverage their managerial capital. During Desmarais’ tenure, Power’s corporate assets have increased by over 1500% (C$165 million to C$2.7 billion) and net earnings have grown by 6500% (C$3 million to C$200 million) .

2.2 Strategic Goals
Power has always been characterized by strong and consistent leadership. The company has operated under a romantic view that the leader is critical in shaping an organization to achieve success. Thus, strategic goals are critically important in communicating the message down the hierarchy from vision to mission to objectives. Power is built around a well-defined vision based on its core values of a corporate family.
Power has stated its mission as “enhancing shareholder value through the active management of long-term investments and responsible corporate citizenship”. This mission is outlined with the strategic objective to minimize risk by diversifying across sectors and geographic segments .

2.3 Organization Chart
Power’s principal asset is its 66.4% holding in Power Financial Corporation (Power Financial) which controls Great-West Lifeco Inc. and IGM Financial Inc. Through Power Financial, Power controls a deep network of wholly-owned subsidiaries offering insurance and wealth management across Canada, in the northern United States, and in European nations such as Germany and the United Kingdom. Power remaining portfolio includes seven daily newspapers in Ontario and Quebec, magazines, and websites operated by Gesca Limitée (Gesca) and investments in global technology companies and funds through Power Technology Investment Corporation (Refer to Appendix 1).

External Analysis
3.1 The General Environment
Global
In recent years, market shocks around the world have demonstrated the vast international linkages that are shared between economies. The Asian Financial Crisis of 1997 saw the stock markets across Southeast Asia in near synchronization. The ongoing worldwide slowdown can be attributed back to rotten mortgages in the United States. Multinational corporations now need to be aware of geographic vulnerabilities in a world of free capital mobility. The failure of one foreign subsidiary affects the corporation’s balance sheet as a whole and puts a crunch on other owned subsidiaries around the world.

Demographic
The effects of the baby boom generation are starting to show however the coming years could bring a major demographic shift. In the 2006 Canadian census, 49.5% of Canadians were above the age of 40. That implies almost half of the country will be retired in 20 years. The demographic required to replace the baby boomers in 20 years, age 0-24, represents only 30.9% of Canada and is not sufficient enough to cover the major labour outflow. Considering that Canada has a positive net migration rate (more people are leaving the country than arriving), there could be a major worker shortage in the coming years. This factor affects the insurance industry because the sales of insurance policies will not be enough to cover the increasing insurance claims and payments that will result in an aging population .

Political/Legal
The 2009 Canadian federal budget, which is currently in legislature, proposed a broad stimulus of cash across several sectors. Through the Extraordinary Financing Framework, $200 billion will be injected into the economy to ease credit markets and loosen liquidity. For Canadian insurers, the Canadian Life Assurance Facility was created to level Canadian insurers with foreign competitors who have received government protection through guaranteed programs. The 2009 budget also plans to repeal Section 18.2 of the Income Tax Act, which will allow Canadian multinational companies to deduct interest earned for certain investments in foreign subsidiaries . These measures, along with the various tax cuts and positive externalities from the budget proposals should be very beneficial to Canadian firms, particularly the multinationals.

Economic
Economists are mixed on forecasts for growth in Canada in 2009. The most optimistic outlook has the Canadian economy posting modest growth by the 3rd quarter. Nevertheless, the worldwide economic slowdown has left damaged balance sheets and cash flows in its wake, the effects of which shall be seen as companies release their 2008 annual reports.

Socio-cultural
Most Canadians are automatically covered by insurance through their family or work. The ability to sell extra packages or gain new customers is hindered by the different propensities to save among culture groups. For example, Chinese citizens typical have higher savings rates than western nations. In Canada, South Asians are the largest visible minority with a population of 1.23 million followed by Chinese at 1.16 million and Black at 0.78 million. These visible minorities are primarily situation in urban centres along the border. These cities continue to diversify culturally and understanding differences in culture translates to success in those vast markets.

Technological
Rapid advancement in processing speed of computers is making world a small place. Internet, telephone, and faxes have created a 24-hour global market where at any point in time, shares are bought and sold somewhere in the world. For a company that invests most of its income, this is a crucial factor for Power. In a changing landscape, the latest technologies may be an easy source of competitive advantage.

3.2 The Insurance Industry
The Canadian insurance market was valued at $95.6 billion in 2007. Non-life insurance such as health and property insurance comprised 56.7% of the market’s value. The remaining 43.4% represents life insurance premiums. The 5-year compound annual industry growth (measured 2001-2006) was 5%.

Porter Five Forces

The Threat of New Entrants
There are few barriers to entering the Canadian insurance industry however the market is highly mature and competitive. At 117 firms, a few companies have gained significant market share while the rest have found profitable niches. The market is increasingly complex and requires experienced management and personnel. There is the potential for other financial service providers such as commercial banks and mutual funds to offer insurance.

The Bargaining Power of Buyers
In the insurance industry, the buyers are known as policy holders. Policy holders vary between individual and group consumers. There are many policy holders relative to insurance companies which weakens the buying power. Furthermore, policies are locked into term contracts so the buyer is restricted from switching. Policies that allow “exceptions” usually require high enough costs to disincentive the buyer from switching. While insurance is not an essential need, many businesses involved with risk require insurance policies to function. However, since group policies can include thousands of individual policies, businesses have a little more buying power than individuals.

The Bargaining Power of Suppliers
The suppliers of Canadian insurers are makers of financial computer software and IT service. The market for computer systems is dominated by major firms such as IBM, adding to supplier power. There is little threat of vertical integration because insurance companies do not have the resources and personnel to develop and maintain computer software in-house. However, insurance companies can outsource certain back-office tasks, decreasing the supplier’s demand.

The Threat of Substitute Products or Services
There are no pure substitutes that offer the same features as an insurance policy. Buyers can invest in other savings options however they do not offer the same guaranteed protection that insurance does.

The Competitive Rivalry
There are three main Canadian insurance companies: ING Groep, Sun Life Financial Inc., and Power’ Great-West Lifeco Inc. Alongside these companies, are many smaller firms both domestic and international. Insurers’ assets are protected by regulations creating high exit barriers. With a large threat of new entrants and high exit barriers, the competitive rivalry intensifies as struggling companies continue operating .

3.4 Turning Threats into Opportunities
It is essential for managers to analyze the external environment looking for threats and opportunities. That alone, however, does not guarantee success. Threats should be identified and developed into opportunities. Current opportunities should be capitalized on now to support further opportunities. There is a worldwide economic slowdown. Credit markets are down as are asset prices. While this may be threatening, it is also a rare opportunity. Companies are undervalued during this recession and can be bought for cheap. In years past, government has been actively regulating the financial industry. The very same regulations that people complained about in the past were now being lauded for saving Canadian banks from crashing. Government regulation has help insurance companies with the double taxation of income trusts. Income trusts were a savings vehicle that could be considered a competitor to insurance policies. The double taxation law that was passed makes them less attractive as investments.

Internal Analysis
4.1 Value Chain Analysis
Primary Activities
Inbound Logistics: Financial computer software is purchased from suppliers. Training and maintenance may be required constantly.
Operations: Premium income is invested in financial markets. Financial software and expert analysts help generate returns on the invested income.
Outbound Logistics: Insurance policies are offered at providers of financial services such as commercial banks and wealth managers or physical branches can offer the entire product line.
Marketing and Sales: Online and phone distribution channels lead consumers to physical agents. Wide product range. Aiming for focus on customer service and quick response.

4.2 Financial Ratios
Although Power holds companies in many sectors, the bulk of its income is from its insurance subsidiaries. Thus, when analyzing Power’s financial ratios, it is helpful to view Power as an insurance company. The most important financial statement for an insurance company is the balance sheet. Great-West has important liabilities to its policyholders and it is critical to be able to cover those obligations. The current ratio can determine if Power is too leveraged to handle these obligations. Power has a debt/equity ratio of 0.78 which is well below the industry average of 1.41. Power also has a below industry average leverage ratio, showing that it is well positioned for the current credit crunch. Power’s return ratios are generally better than the industry average however trail competitor Sun Life on return on assets and return on equity. The most concerning ratio is the -32.1% drop in sales from the same time last year. However, Power’s two main competitors, ING and Sun Life, also saw 30% drops in sales. From these ratios, it is clear that Power has been hit by a slowdown in demand across the insurance industry. Since Power has strong leverage and liquidity ratios, it is capable of weathering the storm until sales start growing.

4.3 Turning Weaknesses into Strengths
The organizational chart shows that almost all of Power’s subsidiaries are in the business of insurance. Aside from holdings in Gesca and Pargesa, these insurance subsidiaries are also all based in Canada. These are weaknesses that need to be developed into strengths. Power has an excellent distribution network in Canada and can ented it into the United States. Power also has fresh new investments in China to make it a truly global company. These initiatives are being led by Paul Desmarais Jr., the son of former CEO Paul Desmarais. Strong and consistent leadership is an important value proposition for Power.

Strategy Formulation
5.1 Key Issues
As a holding company, Power is faced with issues of creating value for its subsidiaries.

Diversification
The current economic climate is full of under-valued assets. Given Power’s strong financial position and the extra credit available from the Extraordinary Financing Framework, an acquisition could be a good option for expansion. With an expansion, there arises the question of where and how much. For simplicity sake, the alternatives for expansion are: no expansion, related diversification, unrelated diversification. With related diversification, Power would expand into more insurance companies in North America. Power could capitalize on synergies between sales forces, brand names, and product offerings. An unrelated diversification spreads the vulnerability that Power has to the insurance industry. Power can still create synergies through shared support activities and talent pooling.

Sagging Subsidiary Profits
On October 11, 2008 both Great-West Lifeco and IGM Financial recorded lower quarterly profits. In total, earnings from subsidiaries decreased from $338 million in 2007 to $293 million. Power also received lower earnings from its operations in China through the Power Technology Investment Corporation. Given the strategy of cutting assets and focusing on major investments, Power may look to sell underperforming assets to free up capital. The alternatives are to keep all current subsidiaries, sell insurance subsidiaries, or sell other subsidiaries. Selling insurance subsidiaries would mean less focus on Power’s core business. Power may be too invested in insurance with subsidiaries cannibalizing each other’s sales. Power’s other subsidiaries include interests in television, newspapers, energy, and wines and spirits. Selling these assets will also bring the benefit of extra capital to spend on other investments.

International Expansion
Power’s international portfolio includes Gesca and Power Technology which are concentrated in Europe and China respectively but Power Financial is still based in North America. Power has had a long history of investment in China and Paul Desmarais has influential connections throughout Europe. These would be the two ideal locations for an international expansion of Power Financial. Power Financial already owns Pargesa Holding S.A. which owns major European energy, minerals, and building materials companies. Power Financial could benefit from this market presence by offering a line of insurance policies through a subsidiary.

6.2 Decision Criteria
At the 1999 annual meeting, Paul Desmarais Jr. defined the principles that would guide Power into the new millennium. He reiterated the mission to enhance shareholder value and to focus on companies that had the long-term potential to dominate their markets. This value must be sustainable in the long-term. To do so, companies need to have strong balance sheets to be able to grow autonomously.

Enhances
shareholder value Long-term
sustainability of profits Maintain healthy balance sheet Potential to dominate industry
Related Diversification Y Y Y Y
Unrelated Diversification Y N N Y
No change N N Y N
Sell insurance subsidiaries N N Y N
Sell other subsidiaries Y N Y Y
Expand to Europe Y Y N N
Expand to China Y Y N N

Recommendation
The only alternative that satisfies each of the decision criteria is for related diversification. By choosing to diversify though, Power is also implicitly deciding not to sell any current subsidiaries. An international expansion is not recommended because of the ramifications on the balance sheet and the lack of potential to dominate those markets. International expansions are very costly and would add more liabilities in the short-run. Furthermore, the insurance markets in Europe and China are already developed with their own respective barriers of entry. Therefore, the related diversification would have to occur in North America. In Canada, Power is already a leading insurer through Great-West and London Life but Power’s interests south of the border are less developed. The recommendation is to acquire a controlling interest (all shares if possible) of an insurance company in the United States.

Implementation
Analysts will search the American insurance industry for undervalued assets. Amidst the collapse of AIG, a lack of confidence in American insurance firms has dropped their value. Power should look for cheap companies that possess strong balance sheets such as those exhibiting low price-to-book ratios. Once a suitable company has been found, Power will offer a friendly takeover by buying the company’s shares. If a deal cannot be reached, alternative companies will be approached. Once assuming control of the American firm, expert management will be assigned to oversee the integration of the new company. In the short-term, support activities can be consolidated as well as marketing and sales functions. Over the long-term, the subsidiary will be left with a healthy balance sheet and autonomous control. During the integration, constant reports of financial statements and synergies created will be prepared and evaluated by managers.

Appendices

Power Corporation of Canada - Organization Chart

Drivers of Supplier Power in Canadian Insurance Industry, 2007

Factors of Threat of New Entrants in Canadian Insurance Industry, 2007

Factors of the Threat of Substitutes in Canadian Insurance Industry, 2007

Factors of the Degree of Rivalry in the Canadian Insurance Industry, 2007

Selected Financial Ratios for Power and its Competitors
Power Corporation ING Groep Sun Life Financial Industry
Debt/Equity Ratio 0.78 5.05 0.76 1.41
Leverage Ratio 13.9 48.7 3.9 14.2
Return on Equity 14.8 -0.5 28.9 12.3
Return on Assets 2.2 0 6.6 2.2
Sales (qtr vs. qtr last year) -32.10 -31.10 -30.6 -21.10

SWOT Analysis
Strengths
- diversified portfolio
- experienced leadership
- high brand recognition and goodwill
- well-connected and global executives
Weaknesses
- too exposed to insurance market
- lack of strength out side of canada
Opportunities
- under-valued assets
- government stimulus
- double-taxation of income trusts Threats
- excessive regulation of financial industry
- state-owned competitors
- credit crunch
- market volatility in wealth management industry
- accusations of political interests

Save the CBC

2009-04-22T17:41:00.000-07:00

The CBC must be saved because who will fund the Peter Mans Bridge?!

Fuck Fox

2009-04-22T17:37:00.000-07:00

To paraphrase an angry Tom Green:
http://www.youtube.com/watch?v=mzYqdz1lmTE
Fuck you Fox. Fuck! You can fucking suck my balls Fox. You dumb...fucks. Fuck! Do some fucking research you dumb fucks. Fuck you! Fucking Fox. Fuck Red Eye. Fuck! You stupid American...fucks!

Oh I'm American wah wah wah. Fuuuuck! Fuck fuck fuck fuck fuck you. Pentafuck you! Fuck you when you were a fetus. Fuck you to pieces dumb shits. Do some research! And don't mess with Canada.

Sucks to be a Toronto sports fan

2009-04-22T17:34:00.000-07:00

Every team sucks. The leafs are rebuilding, the raptors are underachieving, and the jays are overachieving but should really suck. We can't even rely on the unimportant Argos or Rock to win a championship because they suck. Hey did we get the 1996 olympics? no. why? cuz we suck. How about the 200 Olympics? That's a lock right? No, we still sucked.

P.S. Toronto does not suck.

a list of celebrities

2009-04-19T11:58:00.000-07:00

yeah i know, great idea eh?

ted turner
james brown
joe buck
ron jeremy
sally fields
jessica walter
fred langan
david miller
barack obama
barack obama's wife
barack obama's barber
benjamin franklin
ice cube
lauryn hill
jason alexander
stromile swift
miss universe
kirsten dunce cap
mary jane parker
eva longoria
missy elliot
joe blow
joe the plummer
christopher plummer
steve jobs
bill gates
carlos slim
guy who founded ikea
myspace guy
jedi kid
actual jedis
chuck norris

whew!

http://www.kiva.org/

2009-04-13T14:35:00.000-07:00

http://www.kiva.org/

Kiva seems like a really great idea for creating a win-win situation for investors and society. Kiva directs (and guarantees) invested funds towards small businesses in third-world nations. This form of microfinancing was founded by Muhammad Yunus who won a Nobel Peace Prize in 2006. If you have some extra money that you would like to see a safe return on, I'd advise you to check this site out.

iTunes gripe

2009-04-12T16:25:00.000-07:00

I want to see iTunes show what song and artist is playing when it is minized in the taskbar. pretty mcuh every other player does it!

Jason Kapono...good?

2009-04-06T13:35:00.000-07:00

If Jason Kapono ever hit 24 out of 25 3 pointers in a row I'd bow down and praise him as the next MJ.

Insane shot.

2009-04-06T13:34:00.001-07:00

Insane shot.

Paul Revere by Beastie Boys lyrics

2009-04-06T13:31:00.000-07:00

Now here's a little story, I've got to tell
About three bad brothers, you know so well
It started way back in history
With Adrock, M.C.A., and me, Mike D.
Been had a little horsy named Paul Revere
Just me and my horsy and a quart of beer
Riding across the land, kicking up sand
Sheriff's posse on my tail cause I'm in demand
One lonely Beastie I be
All by myself, with nobody
The sun is beating down on my baseball hat
The air is gettin' hot, the beer is getting flat
Lookin' for a girl, I ran into a guy
His name is M.C.A., I said, "Howdy", he said, "Hi"

He told a little story, that sounded well rehearsed
Four days on the run and that he's dying of thirst
The brew was in my hand, and he was on my tip
His voice was hoarse, his throat was dry, he asked me for a sip
He said, "Can I get some?"
I said, "You can't get none!"
Had a chance to run
Pulled out his shotgun
Quick on the draw, I thought I'd be dead
He put the gun to my head and this is what he said,

"Now my name is M.C.A., I've got a license to kill
I think you know what time it is, it's time to get ill
Now what do we have here, an outlaw and his beer
I run this land, you understand, I make myself clear."
We stepped into the wind, he had a gun, I had a grin
You think this story's over but it's ready to begin

Now, "I got the gun, you got the brew
You got two choices of what you can do
It's not a tough decision as you can see
I can blow you away or you can ride with me" I said,
I'll ride with you if you can get me to the border
The sheriff's after me for what I did to his daughter
I did it like this, I did it like that
I did it with a whiffleball bat
So I'm on the run, the cop's got my gun
And right about now, it's time to have some fun
The King Adrock, that is my name
And I know the fly spot where they got the champagne."
We rode for six hours then we hit the spot
The beat was a bumping and the girlies was hot
This dude was staring like he knows who we are
We took the empty spot next to him at the bar
M.C.A. said, "Yippe Yo, you know this kid?"
I said, "I didn't.", but I know he did
The kid said, "Get ready cause this ain't funny
My name's Mike D. and I'm about to get money."
Pulled out the jammy, aimed it at the sky
He yelled, "Stick 'em up!", and let two fly
Hands went up and people hit the floor
He wasted two kids that ran for the door
"I'm Mike D. and I get respect
Your cash and your jewelry is what I expect"
M.C.A. was with it and he's my ace
So I grabbed the piano player and I punched him in the face
The piano player's out, the music stopped
His boy had beef, and he got dropped
Mike D. grabbed the money, M.C.A. snatched the gold
I grabbed two girlies and a beer that's cold.

The Abuse of the English Language in the 9/11 Presidential Address

2009-04-05T14:17:00.000-07:00

“In the normal course of events, Presidents come to this chamber to report on the state of the Union. Tonight, no such report is needed. It has already been delivered by the American people”. These words spoken by President George W. Bush began one of the most important speeches is American history. A mere nine days after the incident, Bush was facing the insurmountable task of addressing a fragile nation looking for answers. His response was a carefully planned attack on Al-Qaeda and segues into the war on Iraq. This address to the nation used what many call political language to try to persuade a nation to follow his cause. This political language contained several of the bad habits or tricks that George Orwell outlined in Politics and the English Language. The four language tricks that he describes are: Meaningless words, pretentious diction, verbal false limbs, and dead metaphors. Although it was written in 1946, many of his theories are still true today and can be found in President Bush’s inaugural address.

The most evident language trick in Bush’s address was the use of meaningless words. In Politics and the English Language, Orwell outlined several examples of what he believes were meaningless words. Two of those words, appear predominately in Bush’s address: Freedom and democracy. President Bush commonly refers to terrorists and Al-Qaeda as “enemies of freedom”. Freedom can be viewed in many ways and it all depends on one’s point of view. People in Afghanistan might see freedom as the removal American forces from their area, while President Bush may see freedom as being able to live a normal life. The definition of freedom becomes quite vague and therefore has no finite meaning. The word democracy is also used without any special meaning to it. Democracy is often used to represent America and how it is the ideal way. Ironically, many critics complain that the American electoral system is not perfectly democratic. Perhaps the best example of this came from President Bush himself, when he won the presidency despite not receiving the most votes. If this system can be called democracy, then it truly shows no meaning for the word democracy.

Like all politicians, Bush used several words in his address that could easily replaced with shorter and easier to comprehend words. Orwell describes these words as pretentious diction and they are found throughout the address. Words like directive, pretense, piety, and pluralism could easily be replaced by words that are more common to everyday people. These words stop the flow of the address because it leaves the reader unsure about the meanings of them.

Many of the sentences in the presidential address feel boring and long due to the use of operators and verbal false limbs. They add syllables to the sentence but aren’t of any more use. These verbal false limbs replace verbs and nouns that could express meaning in much better ways. For example, in the phrase “hand over every terrorist”, the words ‘hand over’ can be replaced by single verbs such as surrender or relinquish. These verbs specify the meaning and make the sentence seem less commonplace.

Metaphors are always an effective way to describe something but sometimes when the metaphors are overused and dead, it defeats the purpose. When the same metaphor is used over and over again, the metaphor loses its meaning and effectiveness. Bush declares that the generation will lift a “dark threat of violence” from its people. Violence is very commonly referred to as a threat and associated with darkness. When the reader sees this, it will not evoke any new images because it has been seen too many times before.

President Bush’s presidential address skillfully rallied a lost nation towards a common goal. However, the bad habits that George Orwell outlines in Politics and the English Language are apparent throughout the speech. The use of meaningless words, pretentious diction, operators or verbal false limbs, and dead metaphors significantly reduce the effectiveness of the speech. Unfortunately, political language typically goes hand in hand with these four language tricks. They are, essentially, what makes political language different from everyday English language. This is the reason why many people complain that political language is hard to understand. If politicians ever want to shed their negative image and appeal to the common man, then they should take a page from Orwell’s book and stay clear of the bad habits that affect the English language.

ROFL Cat Drunk

2009-04-05T14:15:00.000-07:00

The great internet meme has sunk even lower. This cat's about to blow chunks!

To Kill a Mockingbird Essay: True Heroes

2009-04-05T14:14:00.000-07:00

True Heroes

To Kill a Mockingbird is a classic tale of good versus evil in the small town of Maycomb, Alabama. It clearly sets up most characters as either a hero, or a villain through unconventional ways without looking at the obvious choice of the “man with the gun” (112). Although Atticus seems to be the clear hero in the story, some other improbable heroes are evident such as Mrs. Dubose and the Finch children. The one thing that raises them to hero status is also the one thing that hurts them so much. In to Kill a Mockingbird, Harper Lee portrays true heroes as people who persevere through hardships even though they know that they will lose.

The Finch children begin to learn the meaning of a true hero and begin to show it themselves. Scout, who still at a young age, doesn’t fully understand the meaning of a true meaning but at the request of his father, becomes an example of one. At school, Scout is well known for her quick temper and ability to get in fights. Since Atticus took the case, Scout is getting in a lot more fights to not opnly defend her honour, but to defend her family’s as well. However, Atticus confronts her and tell her to hold her “head up high an keep those fists down”, which upsets Scout (76). The next day, Scout decides to listen to Atticus and when she is challenged by Cecil Jacobs, Scout decides the walk away. All the children begin to call her a coward and laugh at her but Scout keeps her head up high. Even though she knows that all the kids will insult her, Scout goes through with it anyways. Jem also becomes an example of a hero when he is at the jailhouse with the Sarum mob. Despite being severely outnumbered, Jem decides to stand by his father and defend the door to the jailhouse. Armed with guns and other weapons, the Sarum mob can seriously hurt Jem, but he doesn’t care. All that matters to him is that he stands by his father and supports what he believes in. This just shows that true heroes do not have to be old and wise, and do not have to make huge sacrifices. They just need to stand up for their beliefs in times where there is so support whatsoever.

An unlikely hero in the book is Mrs. Dubose, who strongly overcame her morphine addiction. At first, Mrs. Dubose is seen as an evil and prejudiced character that hates Jem and Scout. Atticus reminds them to see it from her point of view before judging her which leads to them learning about her drug addiction. Mrs. Dubose needs the children to help her through it, yet she suffered in silence. Moreover, she is very ill and close to dying. The real courage comes from the fact that although she knows that she will die, she still tries to overcome her addiction, no matter how painful and difficult it is. Atticus’ description of true heroes is “when you know you’re licked before you begin but you begin anyway and you see it through no matter what (112).” In the end, Mrs. Dubose is able to die honourably and free from her demons. Even though it didn’t matter much, it was still important to her, and that’s what makes her a true hero.

Atticus Finch is the real hero of the book because he takes the biggest risk, despite knowing that he will definitely lose. Atticus shows in many cases, the definition of a true hero but no situation was more important than the Tom Robinson trial. In Maycomb, the thought of taking a negro’s word over a white man’s is ludicrous to the citizens. Especially over a matter as serious as a black man raping a white woman. Regardless of this information, Atticus still takes Tom Robinson’s case and tries to make as big of a difference as possible. When Scout asks him if he thinks that he will win the case, Atticus calmly replies “No, honey (76).” Atticus goes on to explain that “Simply because we were licked a hundred years before we started is no reason for us not to try to win (76).” Basically, Atticus believes that just because it is unlikely that he will win, doesn’t mean he has to give up before trying. In the weeks before the trial, the Finch family had to endure huge amounts of discrimination because of the case. Atticus in specific, received discrimination from people such as Mrs. Dubose and his own sister. It even went as far as his own nephew, saying that he is “ruinin’ the family” and that they cannot even walk the streets anymore (83). Through all these hardships, Atticus remains strong and focuses on his goal, no matter how tough it is. In his closing statements, Atticus pleas to the jury in a manner that the children have never seen before: “His voice had lost its aridity, its detachment (203).” He now longer was speaking as a professional, he was pleading from his heart for them to abandon their set biases. He knows in his heart that they won’t, but that does not stop him from trying. Even Scout knows deep down that the verdict will be guilty, when she compares watching Atticus’ efforts to “watching Atticus walk down the street, raise a rifle to his shoulder and pull the trigger, but watching all the time knowing that the gun was empty (211).” This metaphor explains that Scout knows all along that Tom Robinson will be judged guilty and sees that Atticus is trying so hard for no reason. When the verdict actually comes and unanimously finds Tom Robinson guilty, Atticus has nothing to do but feel proud that he might have made a difference. Which after all, is all he could possibly have done.

Heroes come in many forms, whether it’s a soldier in the war or an old lady overcoming an addiction. Harper Lee believes that true heroes are not the ones with the guns but the ones who persevere, even though they know that they will lose. Brave does not even begin to describe the people who go through so much pain for a lost cause. The universal image of a hero is a young physically able man who uses his strength to solve problems. In to Kill a Mockingbird, the heroes come in many shapes and sizes, from and frail old lady, to a twelve year old boy. This just goes to show, that in our world, anyone can be a hero and everyone should be respected for his or her efforts.

Fuck Hulu

2009-04-05T14:03:00.000-07:00

First, they do not let Canadians view their videos. Now, I see them flaunting this great new service to my face through their new commercials. It seems like the people at NBC are sure good at discriminating online but not on TV. Fight for net neutrality and tell Hulu to fuck themselves.

CASE STUDY: Wal-Mart in China

2009-04-04T01:11:00.000-07:00

Wal-Mart Stores: Everyday Low Prices in China

Summary: (Taken From Harvard's site)
Although Wal-Mart, the world's largest company by revenue, was into its 9th year of operations in China, its stores were still losing money. It had created a miracle in the U.S. retail industry by revolutionizing the sector's business model and successfully implementing its model through innovative practices that enabled it to sell national brands at "Every Day Low Prices". The challenge Wal-Mart faced was whether it could transport its successful model to win in a market with many differing characteristics which threatened its low-cost structure and which could nullify its competitive advantage. Concerned with the application of established domestic business models in international expansion. Also sheds light on other globalization issues such as market entry strategy, localization vs. standardization, the effect of regulation changes on the competitive landscape, and firm performance.

Learning Objective: (Taken From Harvard's site)
To address competitive advantage and its sources (differentiation and cost leadership); debate standardization and localization in international expansion and strategy formation--the fit between firm strategies and external environments; provide students with a basic understanding of the concept of competitive advantage and its sources through a discussion of Wal-Mart's success in the U.S.; discuss the challenges of replicating a successful domestic strategy in a different market environment; explore whether a firm is able to transport its competitive advantage from one market to another using the example of Wal-Mart's entry into China; and think about potential strategies that Wal-Mart China should consider going forward.

Subjects Covered: (Taken From Harvard's site)
Competitive strategy, Global strategy, Consumer behavior, Industry standards, Standardization, Competitive advantage, Expansion, Consumer goods, Department stores, Retail stores, Retailers, Retailing, Business & government, Government & business, Multinational corporations, Internationalization, Localization, Public administration, Public sector.

(My Notes)
Users & Objectives:
1. Cassian Cheung- President of Wal-Mart China, recently resigned
2. Sam Walton, founder
3. Joe Hartfield- CEO of Wal-Mart Asia

Competitors:
• world rival- Carrefour, Thailand's Lotus, Uk's Tesco, Germany's Metro
• foreign operators would usually have a dominant market position at their home markets, strong liquidity, and came with long term plans for China
• mostly operated in the form of hypermarkets

Financial position:
• poor financial results for Wal-Mart China

WAL MART US
Strategy in US:
• opened “one horse”, rural, backwater towns ignored by other retailers
• aimed to serve customers who had travel long distances to save money
• grew outside competitors' radar screens to a substantial size to command economies of scale
• public listing provided company with ample resources to finance more rapid expansion
• selling brand name products for less
• offered multiple store formats, including discount stores, supercentres, warehouse stores, and neighbourhood markets
• brought customers from all income levels
• unique combination of culture and strategies at Wal-Mart that set it apart from its competition
• started by opening discount stores in small towns: (1) avoided direct competition from stronger players, (2) due to small populations it served once Wal-Mart opened a store, the town could not support another store of similar size, and (3) rural backwaters also reduced costs due to lower land and real estate prices

Cost Controls:
• one of company's core capabilities
• only worthwhile cost was the one that got their customers to buy a product and everybody played a part in keeping the cost down
• goal: to drive down the price of products to the lowest they could possibly be
• had a huge purchasing power with 68,000 suppliers, “love hate relationship”
• Wal-Mart demanded lower price, high quality, efficient bookkeeping and punctual delivery from their suppliers
• helped suppliers improve inventory management and efficiency by weeding out extra costs
• forced its suppliers to search hard for ways to eliminate the inefficiency in their own processes in order to drive costs to a minimum and to improve the quality of their products

Logistics Management:
• target was to have inventories at half the rate of sales and to have any required delivery arriving on the shelved within one day
• no store was more than a day's drive from its distribution centre
• use of technology gave Wal-Mart great efficiency in the supply chain arrangement and was a distinct competitive advantage, started using electronic data interchange (EDI), satellite technology: able to connect all stores to home office
• enabled it to offer its customers the right product mix at the right time while keeping inventory and associated costs as low as they could possibly be

Benefits to Workers:
• started profit sharing plans for rank and file workers, 2/3 of the American workforce owned stock in Wal-Mart
• “cross training”: people switched jobs to enable them to understand different parts of the company's operation, which gave them more variation int heir jobs
• financial numbers were also shared with every employee
• position against unions, would rather close a store than allow it to be unionised
• promotes open door policy so that employees could channel complaints
• employees were motivated, happy, and passionate about their job

Competitive Advantage in which customers were looking for:
• Quality of merchandise
• assortment of goods
• price level
• store environment
• customer support
• store hours
• availability of free parking
• Wal- Mart focused on two major drivers: Price and Service
• each Wal-Mart store monitored the prices of about 1500 items in their competitors' stores
• objective: to offer same merchandise at other local stores but at 20% less
• on-going program to lower prices even further when there was the opportunity to do so “roll back”
• “Special Buy”: a product with a special tag that offered everyday items bundled with additional amounts of the same product or another product for a limited time

Customer Service:
• 3 cardinal beliefs: (1) providing great customer service, (2) showing respect for the individual, and (3) striving for excellence
• these beliefs were translated to 10 specific business rules for every executive/ associate
• “Sundown rule” required for employees to answer requests from customers by the end of business hours

Wal Mart China
• 95% of world population was outside U.S
• Wal-mart China has been losing money since they arrived in August 1996
• Wal-Mart in Germany failed because it was hindered by strict union rule,high labour costs, zoning laws and existing competition
• growth in rural areas was much slower
• problems such as, backward infrastructure, diverse regional consumption patterns
• entry into the WTO gave foreign companies more control over wholesaling and distribution
• industry was crowded with both internationally renowned retailers and domestic players
• resulted to high store density in larger cities
• retail market was undergoing continuous consolidation to eliminate weaker operators
• foreign retailers grew rapidly and commanded a market share estimated at only 3% in 2004
• local rivals were competing head on with foreign operators
• supermarket segment was primarily dominated by domestic players
• localised demand, localised supply base, and localised distributio in China also provided domestic players with an edge in establishing strong regional dominance when foreign retailers found it hard to leverage national presence in a regional market
• China saw substantial growth but many factors either a legacy of history or ew phenomena born of reform still impeded the fast development of a national market

Income Disparity
• broadened gap I wealth between rich and poor and between urban and rural populatios
• income below US$500 limit purchases to daily necessities
• US $1000-$2000 purchase consumer durables and commercial housing
• US$2000- look for sophisticated products and advanced information services
• almost impossible to develop a uniformed national merchandising or marketing strategy
• satisfying consumer's demand in different regions became a costly practice
• low income in rural areas raised concerns on Wal-Mart's US-bred strategy of locating stores in smaller communities
• questions whether such areas could support a large supercentre and were forced to re-focus on more expensive, urban locations

Local Protectionism
• local governments had incetives to protect state-owned enterprises under their jurisdiction as they were the base of their political power and a source of private benefits as well as fiscal revenue
• Wal Mart's entrance to Shanghai: published a new commercial plan to restrict the opening of new supercentres in the inner city
• delay in obtaining municipal approval put Wal-Mart in a much disadvantaged position against major competition in Shanghai's retail market

Infrastructure:
• highways were costly to use, toll fees reached as much as 10% or more of total freight costs
• toll collection at the local level was arbitrary and illegal
• under-developed highway network that Wal-Mart depended on increased costs and more waste especially with perishable goods
• backward transportation network greatly added to the cost of inter-regional distribution
• logistics costs were around 20% of GDP compared with just 10-12% I developed markets

Regulatory Restrictions:
• when distribution centre served a large enough number of stores, economies of scale would be achieved therefore pushing costs down
• only three stores were allowed to be launched in one city and only a hadful of cities were open to foreign retailers
• every store opening had to be approved by the central government
• therefore this made Wal-Mart's expansion very slow
• stores in China were supported by two distribution centres, and they were significantly underused but was required given the slow speed of transportation thus usig the distribution centres did not enable Wal-Mart to reduce costs
• Carrefour expanded quickly to occupy important markets and established network by openly bending Chinese regulations

Lack of IT Network:
• lack of IT network and regulatory ban of satellite usage impaired retailer's effieciency in communicating with its 15,000 local suppliers
Chinese Consumers Culture
1. Many Trips, Little Purchase
• many Chinese spent leisure time in commercial centres instead of staying home and compared prices and quality among different shops
• purchase was often impulsive rather than according to plan
• consumers were brand conscious ad loyalty was very hard to cultivate when consumers always shopped around for best bargain
• people would rather pick up a small amount of goods at one time because most shoppers bked or walked which limited bulk buys
• takes Chinese customer at least 5 trips to buy as much as American shopper got I oe
• average cost of serving customer greatly increased
2. Fresh Means Alive
• freshness of food was an indication of quality
• Customers' demad for absolute freshness with poor transportation network required that a large variety of foods had to be procured locally instead of through Wal-Mart's centralised pocuremet system
• diminished economies of scale and interrupted supply chain meant higher costs insatisfying Chinese customers
3. Shoplifting
• associates morale was to easy to maintain when they were paid low wages and did ot have the upside of stock options
• management turn over was high
• labour official in China's Wal-Mart condemned for squeezing suppliers and making workers suffer

Class Discussion Questions: (Class Note)

1. Why is Wal-Mart successful in the US? What are Wal-Mart's competitive advantages and its sources?
Key Success Factors in US:
• one stop shop- buy things I bulk
• different values
• very patriotic
• low cost
• good logistics
• anti unionization policy
• frugal culture
• creative barriers to entry (rural locations)- small town
• reputation
• squeeze suppliers
• efficient logistics
• hiring practices (reducing benefits paid)
• own store brands
• product mix (only products that sell)
• continuously create value
• economies of scale

2. Should Wal-Mart replicate its domestic model in its original form in China? Why? Can it build the same competitive advantage in China through its success domestic model
3. Provide suggestions on potential strategies that Wal-Mart China should consider in going forward.
Wal Mart in China:(Using what is applicable/ not applicable to China from US key success factors)
• logistics: in store housing to reduce transportation, undercut transports, work with local suppliers who established transportig
• squeezing suppliers: no urgent need to modify, suppliers willing to be squeezed, because too many products/ suppliers already
• frugal culture: keep- anti unionization policy (Not applicable In China)
• create barriers to entry (rural locations)- must be modified, rural areas in China cannot support a Wal-Mart, build near highway (suburbs)
• reputation as U.S icon
• Economies of scale- parter with powerful Carforre is a good idea

Organizational Behaviour Terms

2009-04-04T01:09:00.000-07:00

Behavioural sciences – fields such as psychology and sociology that seek knowledge of human behaviour and society through the use of the scientific method

Organizational behaviour – the field that seeks increased knowledge of all aspects of behaviour in organizational settings through the use of the scientific method

Theory X – A traditional philosophy of management suggesting that most people are lazy and irresponsible and will work hard only when forced to do so

Theory Y – A philosophy of management suggesting that under the right circumstances, people are fully capable of working productively and accepting responsibility for their work

Organization – a structured social system consisting of groups and individuals working together to meet some agreed-upon objectives

Open systems – self-sustaining systems that transform input from the external environment into output, which the system then returns to the environment

Contingency approach – a perspective suggesting that organizational behaviour is affected by a large number of interacting factors. How someone will behave is said to be contingent upon many different variables at once.

Scientific management – an early approach to management and organizational behaviour emphasizing the importance of designing jobs as efficiently as possible

Time-and-motion study – A type of applied research designed to classify and streamline the individual movements needed to perform jobs with the intent of finding the most efficient way of doing them

Human relations movement – a perspective on organizational behaviour that recognizes the importance of social processes in work settings

Classical organizational theory – an early approach to the study of management that focused on the most efficient way of structuring organizations

Bureaucracy – an organizational design developed by Max Weber that attempts to make organizations operate efficiently by having a clear hierarchy of authority in which people are required to perform well-defined jobs

Theory – effects by scientists to explain why various events occur as they do. Theories consist of basic concepts and assertions regarding the relationship between them

Correlational research – an empirical research technique in which variables of interest are identified and carefully measured. These measures are then analyzed statistically to determine the extent to which they are related to one another

Multiple regression – a statistical technique indicating the extent to which each of several variables contributes to accurate predictions of another variable

Experimental method – an empirical research method in which one or more variables are systematically varied (the independent variables) to determine if such changes have any impact on the behaviour of interest (the dependent variables)

Naturalistic observation – a qualitative research technique in which an investigator observes events occurring in an organization while attempting not to affect those events by being present

Participant observation – naturalistic observations of an organization made by individuals who have been hired as employees

Case method – a qualitative research method in which a particular organization is studied in detail, usually in the hopes of being able to learn about organizational functioning in general

Personality

Personality – the unique and relatively stable patterns of behaviour, thoughts, and emotions shown by individuals

Interactionist perspective – the view that behaviour is a result of a complex interplay between personality and situational factors

Person-job fit – the extent to which individuals possess the traits and competencies required to perform specific jobs

“Big five” dimensions of personality – five basic dimensions of personality that are assumed to underlie many specific traits; conscientiousness, extroversion, agreeableness, emotional stability, openness to experience

Positive affectivity – the tendency to experience positive moods and feelings in a wide range of settings and under many different conditions

Negative affectivity – the tendency to experience negative moods in a wide range of settings and under many different conditions

Type A behaviour pattern – a pattern of behaviour involving high levels of competitiveness, time urgency, and irritability

Type B behaviour pattern – a pattern of behaviour characterized by a casual, laid-back style; the opposite of Type A behaviour pattern

Proactive personality – a personality trait reflecting the extent to which individuals seek to change the environment to suit their purposes and to capitalize on various opportunities

Self-efficacy – individuals’ beliefs concerning their ability to perform specific tasks successfully

Self-monitoring – a personality trait involving the extent to which individuals adapt their behaviour to the demands of specific situations, primarily to make the best possible impression on others

Machiavellianism – a personality trait involving willingness to manipulate others for one’s own purposes

Achievement motivation – the strength of an individual’s desire to excel – to succeed at difficult tasks and to do them better than other persons

Power motivation – the strength of an individual’s desire to be in charge, to be able to exercise control over others

Affiliation motivation – the strength of an individual’s desire to have close, friendly relations with others

Leadership motivation pattern (LMP) – a pattern of personality traits involving high power motivation, low affiliation motivation, and a high degree of self-control

Emotional intelligence – the ability to perceive and control emotions

Objective tests – questionnaires and inventories designed to measure various aspects of personality

Projective tests – methods for measuring personality in which individuals respond to ambiguous stimuli. Their responses provide insights into their personality traits

Reliability – the extent to which a test yields consistent scores on various occasions, and the extent to which all of its items measure the same underlying construct

Validity – the extent to which a test actually measures what it claims to measure

Chapter 6: Work-Related Attitudes: Feelings about Jobs, Organization and People

Attitudes – stable clusters of feelings, beliefs, and behavioural intentions towards specific objects, people, or institutions

Job Descriptive Index (JDI) – a rating scale for assessing job satisfaction. Individuals respond to this questionnaire by indicating whether or not various adjectives describe aspects of their work

Minnesota Satisfaction Questionnaire (MSQ) – a rating scale for assessing job satisfaction in which people indicate the extent to which they are satisfied with various aspects of their jobs

Pay Satisfaction Questionnaire (PSQ) – a questionnaire designed to assess employees’ level of satisfaction with various aspects of their pay (e.g., its overall level, raises, benefits)

Critical incidents technique – a procedure for measuring job satisfaction in which employees describe incidents relating to their work that they have found especially satisfying or dissatisfying

Two-factor theory (of job satisfaction) – a theory, devised by Herzberg, suggesting that satisfaction and dissatisfaction stem from different groups of variables (motivators and hygienes, respectively)

Value theory (of job satisfaction) – theory, devised by Locke, suggesting that job satisfaction depends primarily on the match between the outcomes individuals value in their jobs and their perceptions about the availability of such outcomes

Employee withdrawal – actions, such as chronic absenteeism and voluntary turnover (i.e., quitting one’s job), that enable employees to escape from adverse organizational situations

Organizational commitment – the extent to which an individual identifies and is involved with his or her organization and/or is unwilling to leave it

Side-bet orientation – the view of organizational commitment that focuses on the accumulated investments an individual stands to lose if he or she laves the organization

Goal-congruence orientation – an approach to organizational commitment according to which the degree of agreement between individual’s personal goals and those of the organization is a determinant of organizational commitment

Continuance commitment – the strength of a person’s desire to continue working for an organization because he or she needs to do so and cannot afford to do otherwise

Affective commitment – the strength of a person’s desire to work for an organization because he or she agrees with it and wants to do so

Normative commitment – the strength of a person’s desire to continue working for an organization because he or she feels obligations from others to remain there

Prejudice – negative attitudes toward the members of specific groups, based solely on the fact that they are members of those groups (e.g., age, race, sexual orientation)

Discrimination – the behaviour consistent with a prejudicial attitude; the act of treating someone negatively because of his or her membership in a specific group

Generation X – the generation of people born at the end of the baby boom, 1960-1966

Generation Y – The generation of people born between 1967 and 1979

Diversity management programs – programs in which employees are taught to celebrate the differences between people and in which organizations create supportive work environments for women and minorities

Awareness-based diversity training – a type of diversity management program designed to make people more aware of diversity issues in the workplace and to get them to recognize the underlying assumptions they make about people

Skills-based diversity training – an approach to diversity management that goes beyond awareness-based diversity training and is designed to develop people’s skills with respect to managing diversity

The Work Environment: Culture

Organizational culture – a cognitive framework consisting of attitudes, values, behavioural norms, and expectations shared by organizational members

Subcultures – cultures existing within parts of organizations rather than entirely through them. Members of subcultures share values in addition to the core values of their organization as a whole

Dominant culture – the overall culture of an organization, reflected by core values that are shared throughout the organization

Perception and Learning: Understanding and Adapting to the Work Environment

Perception – the process through which we select, organize, and interpret information gathered by our senses in order to understand the world around us

Social perception – the process through which individuals attempt to combine, integrate, and interpret information about others

Attribution – the process through which individuals attempt to determine the causes of others’ behaviour

Correspondent inferences – judgments made about what someone is like based on observations of his or her behaviour

Kelley’s theory of causal attribution – the approach suggesting that people will believe others’ actions to be caused by internal or external factors based on three types of information: consensus, consistency, and distinctiveness

Perceptual biases – predispositions that people have to misperceive others in various systematic ways

Fundamental attribution error – the tendency to attribute others’ actions to internal causes (e.g., their traits) while largely ignoring external factors that also may have influenced their behaviour

Halo effect – the tendency for our overall impressions of others to affect objective evaluations of their specific traits; perceiving high correlations between characteristics that may be unrelated

Similar-to-me effect – the tendency for people to perceive in a positive light others who are believed to be similar to themselves in any of several different ways

First-impression error – the tendency to base our judgments of others on our earlier impressions of them

Selective perception – the tendency to focus on some aspects of the environment while ignoring others

Stereotypes – beliefs that all members of specific groups share similar traits and behaviours

Performance appraisal – the process of evaluating employees on various work-related dimensions

Impression management – efforts by individuals to improve how they appear to others

Corporate image – the impressions that people have of an organization

Operant conditioning (or instrumental conditioning) – the form of learning in which people associate the consequences of their actions with the actions themselves. Behaviours with positive consequences are acquired; behaviours with negative consequences tend to be eliminated

Law of Effect – the tendency for behaviours leading to desirable consequences to be strengthened and those leading to undesirable consequences to be weakened

Positive reinforcement – the process by which people learn to perform behaviours that lead to the presentation of desired outcomes

Negative reinforcement (of avoidance) – the process by which people learn to perform acts that lead to the removal of undesired events

Punishment – decreasing undesirable behaviour by following it with undesirable consequences

Extinction – the process through which responses that are no longer reinforced tend to gradually diminish in strength

Contingencies of reinforcement – the various relationships between one’s behaviour and the consequences of that behaviour – positive reinforcement, negative reinforcement, punishment and extinction

Continuous reinforcement – a schedule of reinforcement in which all desired behaviours are reinforced

Partial (or intermittent) reinforcement – a schedule of reinforcement in which only some desired behaviours are reinforced. Types include: fixed interval, variable interval, fixed ratio, and variable ratio

Fixed internal schedules – schedules of reinforcement in which a fixed period of time must elapse between the administration of reinforcements

Variable interval schedules – schedules of reinforcement in which a variable period of time (based on some average) must elapse between the administration of reinforcements

Fixed ratio schedules – schedules of reinforcement in which a fixed number of responses must occur between the administration of reinforcements

Variable ratio schedules – schedules of reinforcement in which a variable number of responses (based on some average) must occur between the administration of reinforcements

Schedules of reinforcement – rules governing the timing and frequency of the administration of reinforcement

Observational learning (or modeling) – the form of learning in which people acquire new behaviours by systematically observing the rewards and punishments given to others

Feedback – knowledge of results of one’s behaviour

Organizational behaviour management (or modification or OB Mod) – the practice of altering behaviour in organizations by systematically administering rewards

Shaping – the process of selectivity reinforcing behaviours that approach a desired goal behaviour

Discipline – the process of systematically administering punishments

Progressive discipline – the practice of gradually increasing the severity of punishments for employees who exhibit unacceptable job behaviour

Motivation in Organizations

Motivation – the set of processes that arouse, direct, and maintain human behaviour toward attaining some goal

Need hierarchy theory – Maslow’s theory specifying that there are five human needs (physiological, safety, social, esteem, and self-actualization) and that these are arranged such that lower, more basic needs must be satisfied before higher-level needs become activated

Self-actualization – the need to discover who we are and to develop ourselves to our full potential

ERG theory – an alternative to Maslow’s need hierarchy theory processed by Alderfer, which assets that there are three basic human needs: existence, relatedness, and growth

Outplacement services – assistance in finding new jobs, which companies provide to employees they lay off

Goal setting – the process of determining specific levels of performance for workers to attain

Goal commitment – the degree to which people accept and strive to attain goals

Equity theory – the theory stating that people strive to maintain ratios of their own outcomes (rewards) to their own inputs (contributions) that are equal to the outcome/input ratios of others with whom they compare themselves

Outcomes – the rewards employees receive from their jobs, such as salary and recognition

Inputs – people’s contributions to their jobs, such as their experience, qualifications, or the amount of time worked

Overpayment inequity – the condition, resulting in feelings of guilt, in which the ratio of one’s outcomes to inputs is more than the corresponding ratio of another person with whom that person compares himself or herself

Underpayment inequity – the condition, resulting in feelings of anger, in which the ratio of one’s outcomes to inputs is less than the corresponding ratio of another person with whom that person compares himself or herself

Equitable payment – the state in which one person’s outcome/input ratio is equivalent to that of another person with whom this individual compares himself or herself

Two-tier wage structures – payment systems in which newer employees are paid less than employees hired at earlier times to do the same work

Procedural justice – perceptions of the fairness of the procedures used to determine outcomes

Expectancy theory – the theory that assets that motivation is based on people’s beliefs about the probability that effort will lead to performance (expectancy), multiplied by the probability that performance will lead to reward (instrumentality), multiplied by the perceived value of the reward (valence)

Expectancy – the belief that one’s efforts will positively influence one’s performance

Instrumentality – an individual’s beliefs regarding the likelihood of being rewarded in accord with his or her own level of performance

Valence – the value a person places on the rewards he or she receives from an organization

Cafeteria-style benefit plans – incentive systems in which employees have an opportunity to select the fringe benefits they want from a menu of available alternatives

Pay-for-performance plan – a payment system in which employees are paid differentially, based on the quantity and quality of their performance. Pay-for-performance plans strengthen instrumentality beliefs

Job design – an approach to motivation suggesting that jobs can be created so as to enhance people’s interest in doing them

Job enlargement – the practice of expanding the content of a job to include more variety and greater number of tasks at the same level

Job enrichment – the practice of giving employees a high degree of control over their work, from planning and organization, through implementing the jobs and evaluating the results

Job characteristics model – an approach to job enrichment which specifies that five core job dimensions (skill variety, task identity, task significance, autonomy, and job feedback) produce critical psychological states that lead to beneficial outcomes for individuals (e.g., high job satisfaction) and the organization (e.g., reduced turnover)

Motivating potential score (MPS) – a mathematical index describing the degree to which a job is designed so as to motivate people, as suggested by the job characteristics model. It is computed on the basis of a questionnaire known as the Job Diagnostic Survey (JDS)

3 Questions About Motown

2009-04-04T01:07:00.000-07:00

1. Why was HDH not able to duplicate the chart topping success they had at Motown when they formed their own label?
- Although HDH were brilliant writers and producers on their own, they still suffered from a lack of charisma star performers. The Motown machine was able to produce stage ready stars by their first single; however HDH did not have the luxury of writing for polished performers with their new label. As a result, despite having mild short-term success, none of the artists on HDH’s new labels would come close to matching the careers of most Motown artists. Ultimately, without big name performers on their labels, HDH’s labels would eventually go out of business by 1974.

2. What was most responsible for HDH’s Motown success, why?
- HDH had some of the best performers in America singing their songs. Many of their songs were sung by superstars such as Diana Ross, The Supremes, and Marvin Gaye. Many other writers had similar success for the same reason. While the writing by HDH was very good, the songs could not be as successful as they were without the right artist. For example, Otis Redding’s “Respect” was a mild success but the song took off with Aretha Franklin’s rendition of it. Furthermore, the power that Motown wielded at the time ensured that their songs would be heard and available all around the nation. Every radio station and every record store would have the latest Motown records. HDH’s new label did not have this power and thus it was harder to reach a broad audience.

3. In the final analysis, do you think Motown would have had more hits had they kept HDH instead of firing them?
- ¬Although the key to Motown’s success was its artists, HDH was still an integral component of the Motown machine. Throughout their time with Motown, the team of HDH wrote 25 number one hits. However, HDH wasn’t the only successful writing team on the Motown staff. Surely without HDH, Motown would lose some hits but the label continued to be successful without the star writing trio. Once again, they relied on the star power of their performers, with many more number one hits coming from Diana Ross, The Temptations, Marvin Gaye, and Stevie Wonder. The slowdown in the frequency of number one hits can be attributed mostly to the breaking down of Motown itself. By this time, the label had become too big for Barry Gordy to micromanage. Gordy could no longer oversee and control every aspect of Motown and as a result, the quality began to drop.

Data analysis in Microsoft Excel

2009-04-04T01:06:00.000-07:00

As we have seen in class, Excel is capable of performing a variety of statistical analyses. These can be accessed under the “Tools” pull-down menu, within “Data Analysis”. Some of the capabilities we have explored so far include:

Descriptive Statistics
Identify the range of data for which you would like statistics in the Input Range.
Specify how the data is arranged in your spreadsheet - whether the data for one variable is grouped within the same column or the same row.
If you have included labels to describe your data in the first row/column, check the box to indicate this (it is a good idea to do this, since it makes the results easier to read, particularly when you are analyzing several variables simultaneously).
Specify where you would like the output to appear (on the same worksheet, on a new worksheet, in a new workbook).
Indicate which statistics you would like calculated. “Summary statistics” will provide most of the basic statistics you are interested in (mean, median, mode, variance, standard deviation, range, minimum, maximum, sum, count).

Histogram
Identify the range of data for which you would like a frequency table and/or a histogram in the Input Range.
If desired, identify the list of end points of the intervals you would like to use (in ascending order) in the Bin Range. Excel will choose equally spaced intervals if you do not specify any.
Specify where you would like the output to appear (on the same worksheet, on a new worksheet, in a new workbook).
Select Chart Output if you would like a histogram in addition to a frequency table.

Correlation
Identify the range of data for which you would like correlation statistics in the Input Range (at least 2 variables).
Specify how the data is arranged in your spreadsheet - whether the data for one variable is grouped within the same column or the same row.
If you have included labels to describe your data in the first row/column, check the box to indicate this (it is a good idea to do this, since it makes the results easier to read, particularly when you are analyzing several variables simultaneously).
Specify where you would like the output to appear (on the same worksheet, on a new worksheet, in a new workbook).
The output will appear as a matrix, with one row and one column for each variable.

Further details about these (or any other) Excel functions are available through the Help function in Excel.

MGMT 2000 Exam with Solutions

2009-04-04T01:04:00.000-07:00

QUESTION 1 [8 points]

A particular type of printer ribbon is produced by only two companies, Alamo Ribbon Company and South Jersey Products. Suppose Alamo produces 65% of the ribbons and South Jersey produces 35%. Eight percent of the ribbons produced by Alamo are defective and 12% of the South Jersey ribbons are defective.

a) A customer purchases a new ribbon. What is the probability that Alamo produced the ribbon? [2 points]
b) The ribbon is tested, and it is defective. Now what is the probability that Alamo produced the ribbon? [2 points]
c) Which company would you choose to become your ribbon supplier and why? What other factors must you consider when making this decision? [4 points]

Answer:
a) 65%
b) p(A|D) = p(A,D) / p(D) = (.65)(.08) / [(.65)(.08) +(.35)(.12)] = .553
c) I would have to know the price of both types of ribbons and any costs (time, damages etc.) associated with identifying a particular ribbon as defective. If the price were the same for both and costs of identifying defectives were negligible, I would choose Alamo since it has the greatest market share (and may therefore be more reliable) and the lowest defect rate.

QUESTION 2 [10 points]

You decide to purchase new furniture for your apartment. The cash price for the furniture is $1500 (option A). You have the option to select an instalment plan of $84/month for 24 months (option B).

a) Draw a cash flow diagram for each option. [2 points]
b) What is the interest per month that you are charged? [4 points]
c) What are the nominal and effective rates per year? (If you were unable to solve part b), assume an interest rate of 1.5% per month for your calculations here and for part d).) [2 points]
d) Which option would you select and why? [2 points]

Answer:
a) Option A Option B
0 1 24
-$84
-$1500

b) PV = U * [(1+i)n-1]
[i(1+i)n]
at I=2%, PV(B-A) = 1500 + 84 ((1.02)24-1)/[(.02)(1.02)24) = -88.77
at I=3%, PV(B-A) = 1500 + 84 ((1.03)24-1)/[(.03)(1.03)24) = 77.41

IRR = r1 + (r2-r1) |NPV1| .
|NPV1| + |NPV2|
= 2 + (3-2) (88.77) / (88.77+77.41) = 2.53%

c) nominal = 12(2.53) = 30.36%
effective = (1.0253)12 –1 = 34.96%
or, using the 1.5% rate:
nominal = 12(1.5) = 18%
effective = (1.015)12 –1 = 19.56%

d) I would pay the $1500 up front. The furniture store is implicitly offering me a loan at over 30% interest. I can get a bank loan for considerably less.

QUESTION 3 [11 points]

You want to invest $10,000 in the stock market by buying shares in one of 3 companies. Shares in Company A, though risky could yield a 50% return on investment during the next year. If the stock market conditions are not favourable (a “bear” market), the stock may lose 20% of its value. If the market is neutral, the value of Company A stock will not change. Company B provides safe investments with 15% return in a “bull” market, 10% in a neutral market, and only 5% in a “bear” market. Company C is a counter-cyclical investment. It provides 10% in a “bear” market and loses 5% in a “bull” market. Its value does not change in a neutral market. All the publications you have consulted are predicting a 60% chance for a bull market, a 10% chance for a neutral market, and a 30% chance for a bear market.

a) You began to draw a decision tree to solve the problem but were called away by the sound of reindeer landing on your roof. Complete the attached tree, filling in the shaded areas. [5 points]

Bull 0.6
15000

Company A Neutral 0.1
10000

Bear 0.3
8000

Bull 0.6

Company B Neutral 0.1

11150
Bear 0.3

Bull 0.6

Company C Neutral 0.1

Bear 0.3

b) Which stock would you invest in? [1 point]
c) Compute the value of perfect information. [3 points]
d) Perfect information about the future performance of the stock market is impossible to obtain. Knowing that, why would you compute the value of perfect information? [2 points]

Answer:
a)

Bull 0.6
15000

Company A Neutral 0.1
10000
12400
Bear 0.3
8000

Bull 0.6
11500

Company B Neutral 0.1
11000
12400 11150
Bear 0.3
10500

Bull 0.6
9500

Company C Neutral 0.1
10000
10000
Bear 0.3
11000

b) company A
c) EVw/PI = .6*15000+.1*11000+.3*11000 = 13400
VOPI = 13400-12400 = 1000
d) The value of perfect information gives us an upper bound on the amount we would be willing to pay for any kind of information. We can use this value as a filter to eliminate from consideration any offers of information at a price greater than the value of perfect information.

QUESTION 6 [9 points]

Schulich tracks the number of students graduating in each term.

Year Term Graduates Moving Average
2000 Fall 23
2001 Winter 48 75.33333
2001 Summer 155 74.66667
2001 Fall 21 70
2002 Winter 34 76
2002 Summer 173 75
2002 Fall 18 69.33333
2003 Winter 17 60.33333
2003 Summer 146 65
2003 Fall 32 69
2004 Winter 29 68
2004 Summer 143

a) Use the above data to compute seasonal indices. [5 points]
b) Over how many observations was the moving average taken? [1 point]
c) Explain the meaning of the seasonal index for Fall. [2 points]
d) What Excel feature is helpful in organizing data to compute seasonal indices? [1 point]

Answer:
a)
Moving Average
F W S
75.33333 0.637168 0.637168 2.075893
74.66667 2.075893 0.3 0.447368 2.306667
70 0.3 0.259615 0.281768 2.246154
76 0.447368 0.463768 0.426471
75 2.306667
69.33333 0.259615 0.341128 0.448194 2.209571 2.998893
60.33333 0.281768
65 2.246154 0.341254 0.448359 2.210387
69 0.463768
68 0.426471

b) 3
c) The number of graduates in the fall term is 34% of what you would expect in a typical term if there were no seasonal variation.
d) pivot table
QUESTON 7 [7 points]

At the latest firemen’s union meeting, the membership expressed concern that their wages were not keeping up with the pace of inflation. The following regression model was created to investigate the growth in firemen’s average wages in thousands of dollars:
ln(Wage) = 10.69 + 0.039 (Time)
where Time = 1 in the year 1990.

a) Forecast firemen’s average wages for 2006. [1 point]
b) Compute the growth rate. [2 points]
c) Inflation has been in the 2-3% range in the last decade. Are the firemen justified in their concerns? Why or why not? [2 points]
d) Sketch a rough graph of firemen’s wages over time. [2 points]

Answer:

a) ln (Wage) = 10.69 + 0.039(17) = 11.353
Wage = 85,220.73
b) e0.039 - 1 = 3.98%
c) No. On average, their wages are growing at slightly more than the rate of inflation. (However, individual firemen’s wages may be increasing at a faster or slower rate, so some may have reason for their complaints while others would not.)
d) Wage($)

Time

QUESTION 8 [8 points]

The Finance Department at Treasure Island Toys is evaluating its cost structure. One of the things the company would like to evaluate is the appropriateness of its allocation of expenses between fixed and variable costs. The Finance Department produced the following graph using financial results for the company and industry statistics for the last 10 years:

a) Is this an effective graph for comparing the company’s cost allocation to industry standards? Why or why not? [3 points]
b) Does the company have high or low variable costs relative to the industry? [1 point]
c) Last year, the company’s sales were $500,000 and profits were 5% of income. Unfortunately this has been a slow year, and sales are forecast to drop to $400,000. What will be the effect on the company’s profit? Does the company appear to have made a good choice with respect to its degree of operating leverage under the current circumstances? [4 points]

Answer:
a) It is effective. It shows the degree of operating leverage for the company over time, which allows us to see any trends. It also shows the values relative to industry totals for easy comparison. It is easy to see that DOL has been increasing for the company while industry values remained steady; the company’s DOL is now appreciably higher than industry average. The graph is clear and easy to follow. One improvement could be to put actual years rather than a time index for the horizontal axis.
b) The company has a higher proportion of variable costs than the industry.
c) % change in sales = (400-500)/500 = -0.2
DOL = % change in profit/%change in sales ~= 2.5
Therefore % change in profit must be about –0.5
Profit(last year) = 500,000*.05 = 25,000
Profit (this year) = 25,000 (.5) = 12,500
The company’s profit will drop to $12500.
Because the company is more highly leveraged, the effect on profit is greater than it would have been if the company followed industry standard. Being more leveraged is hurting the company in this instance as its profit will drop more than it would have if DOL had been lower.
QUESTION 9 [7 points]
True/False
Determine whether the statement is true or false and circle the corresponding word.

a) An  of 0.1 weights the most recent observation more heavily than an  of 0.2. True False
b) Ieff compounded monthly is greater than ieff compounded quarterly for the same APR. True False
c)
d) Fred and Jane each invest $100 today. Fred earns 6% per year for the first 2 years and 8% per year for the second 2 years. Jane earns 8% per year for the first 2 years and 6% per year for the second 2 years. At the end of 4 years, Fred and Jane will have the same amount of money. True False
e) Fred and Jane each invest $100 at the beginning of each year for a period of 4 years. Fred earns 6% per year for the first 2 years and 8% per year for the second 2 years. Jane earns 8% per year for the first 2 years and 6% per year for the second 2 years. At the end of 4 years, Fred and Jane will have the same amount of money. True False
f) Quarterly seasonality can be captured in a regression model using 3 dummy independent variables. True False
g) When forecasting sales with seasonality, we use the model Deseasonalized Sales = a + b (Time) because it predicts the trend alone, while the model Sales = a+b (Time) would predict both the trend and seasonality. True False

QUESTION 10 [6 points]
Select the correct answer(s). Points will be granted for correct choices but will be deducted for incorrect choices.

1) The coefficient of determination (r2) tells us
a) that the coefficient of correlation is larger than 1
b) whether R has any significance
c) that we should not partition the total variation
d) the proportion of total variation in y that is explained by x

2) What Excel function can be used to do the equivalent of: IF(J4>H3,J4,H3)
a) MAX
b) MIN
c) GOALSEEK
d) COUNT

3) An investment is acceptable if its IRR
a) is exactly equal to its net present value (NPV)
b) is exactly equal to zero
c) is less than the required return
d) exceeds the required return

4) Net present value:
a) is equal to the initial investment in a project
b) compares project cost to the present value of the project benefits
c) is equal to zero when the discount rate used is less than the IRR
d) is simplified by the fact that future cash flows are easy to estimate
e) requires a firm to set an arbitrary cut-off point for determining whether an investment is acceptable

5) What are the disadvantages of the payback period method:
a) ignores the time value of money
b) biased against long-term projects
c) biased toward liquidity

Finance Cheat Sheet

2009-04-04T01:03:00.000-07:00

Cash Flow from Assets
= Cash Flow to Creditors + Cash Flow to Stockholders
= Operating Cash Flow (OCF) - Net Capital Spending (NCS) - Additions to Net Working Capital (NWC)

Cash Flow to Creditors
= - (Net New Borrowing)

Cash Flow to Equityholders
= Dividends Paid - (Net New Equity Raised) = (dividends – equity issued) – (interest – new LT debt)

Operating Cash Flow
= Net Income + Depreciation

Net Capital Spending
= End. Net Fixed Assets - Beg. Net Fixed Assets + Depreciation

Additions to Net Working Capital
= End. NWC - Beg. NWC

NWC = Current Assets - Current Liabilities

Personal Tax on Dividends
1. Grossed-up dividends = gross-up factor (1.25) x dividends
2. Gross federal tax = federal tax rate x grossed-up dividends
3. Federal dividend tax credit = federal dividend tax credit rate x grossed-up dividends
4. federal dividend tax = gross federal dividend tax – federal dividend tax credit

Ch 4: Time Value of Money

Future Value = I * (1+r)t

Present Value
= future value after t periods / (1+r)t
r = (FVPV )1/n – 1
Rule of 72: time for investment to double is 72/r
Interest rate on a perpetuity = cash payment / present value
= C / PV

PV of a perpetuity = cash payment / interest rate
= C / r

PV of a delayed perpetuity
= (cash payment / interest rate) x [1 / (1+r)t]

PV of a t-year annuity
= C [1/r – 1/(r(1+r)t) ]

PV annuity due
= 1 + [1/r – 1/(r(1+r)t-1)]

FV of annuity
= cash payment x (1+r)t
= C x {[1/r – 1/r(1+r)t] x (1+r)t}
= C x {[(1+r)t – 1] / r}

PV of a perpetual stream of payments growing at a constant rate
= C / (r-g)

PV of a finite stream of payments growing at a constant rate
= [C / (r-g)] x {1-[(1+g) / (1+r)]T}

Real future value of investment
= [$1000 x (1 + nominal interest rate)] / (1 + inflation rate)

1 + real interest rate
= (1 + nominal interest rate) / (1 + inflation rate)

Real interest rate =(approximately) nominal interest rate – inflation rate

1+EAR = (1 + annual rate)
= (1 + monthly rate)12
= (1+(APR/m))m

Monthly interest rate
= APR / 12

Per period rate
= (1+EAR)1/m -1

APR = m × per period rate

Ch 5 : Bonds Valuation

PV of a bond (bond price)
= PV (coupons) + PV (face value)
= coupon x [1/r – 1/r(1+r)t] + face value / (1+r)t

Coupon rate
= coupon / face value

Current yield
= annual coupon payment / bond price

Rate of Return
= (coupon income + price change) / investment

Effective annual equivalent: rate of return on a 2 year bond
= [1 + (coupon income + price change) / investment] ½

Price
= face value / (C+YTM) maturity

Ch 17: Ratios

Leverage Ratios
Long-term debt ratio
= long-term debt / (long-term debt + equity)
Debt-equity ratio
= long-term debt / equity
Total debt ratio
= total liabilities / total assets
Times interested earned
= EBIT / interest payments
Cash coverage ratio
= (EBIT + depreciation) / interest payments
Fixed charge coverage ratio
= (EBIT + depreciation) / interest payments + (debt payments) / (1 - tax rate)

Liquidity Ratios
NWC to assets
= net working capital / total assets
Current ratio
= current assets / current liabilities
Quick ratio
= (cash + marketable securities + receivables) / current liabilities

Interval Measure
= (cash + marketable securities + receivables) / average daily expenditures from operations

Efficiency Ratios
Total asset turnover
= sales / average total assets
Average collection period
= average receivables / average daily sales
Inventory turnover
= cost of goods sold / average inventory
Days’ sales in inventories
= average inventory / (cost of goods sold / 365)
Average payment period
= average payables / average daily expenses

Profitability Ratios
Gross profit margin
= (sales - cost of goods sold) / sales
Operating profit margin
= (EBIT - taxes) / sales
Net profit margin
= (net income + interest) / sales
Return on assets
= (net income + interest) / average total assets
Return on equity
= net income / average equity
Payout ratio
= dividends / earnings
Plowback ratio
= 1 - payout ratio
Growth in equity from plowback
= plowback ratio x ROE

Market Based Ratios
Price-earnings ratio
= stock price / earnings per share

Market to book ratio
= stock price / book value per share
= Market EquityBook Equity
Book value per share
= shareholder's equity/number of common shares outstanding

DuPont System
ROA
= asset turnover x profit margin
= sales/assets x (net income + interest) / sales
ROE
= leverage ratio x ROA x “debt burden”
= leverage ratio x asset turnover x profit margin x “debt burden”
= assets/equity x sales/assets x (net income + interest)/sales x net income/(net income + interest)

EVA = residual income
= income earned – income required
= income earned – [cost of capital x investment]

Dividends = eps * payout ratio

Ch 6: Stocks Valuation
Expected return = r = (DIV1 + P1 – P0)/P0

After-tax rate of return = (DIV1 – dividend tax)/P0 + (capital gain – capital gains tax)/P0

Price today = P0 = (DIV1 + P1)/P0
P0 = PV of (DIV1, DIV2…) = DIV1/(1 + r) + DIV2/(1 + r)2 + … + (DIVt + Pt)/(1 + r)2

Stock price = PV (all future dividends per share)

P0 = DIV1/r
Value of a no-growth stock = P0 = EPS1/r

Constant-growth DDM P0 =DIV1/r-g = DIV0* (1+g) / r-g

Expected rate of return = r = DIV1/P0 + g = dividend yield + growth rate
Non-constant growth:
P0 = DIV1/(1 + r) = DIV2/(1 + r)2 + … + DIVH/(1 + r)H + PH/(1 + r)H
PV of a growing annuity
= C1/(r-g) x {1- [(1-g)/(1+r)]t}
EPS = stock price/earnings
Terminal price = Pt = DIVt+1/(r – g)
Sustainable growth rate = g = return on equity x plowback ratio

Payout ratio = dividends/earnings

Plowback ratio = 1-payout ratio

Ch 7: NPV

NPV = PV – required investment

PV = C1/(1 + r) + C2/(1 + r)2 + … + Ct/(1 + r)t, last year to add CF sold for

NPV = C0 + C1/(1 + r) + C2/(1 + r)2 + … + Ct/(1 + r)t

PV = cash flow x annuity factor = C x [(1/r) - 1/r(1 + r)t]

Rate of return = profit/investment = (C1 – investment)/investment = (C1 + C0)/(-C0)

NPV = C0 + C1/(1 + IRR) + C2/(1 + IRR)2 + … + Ct/(1 + IRR)t

Book rate of return = book income/book assets

Equivalent annual cost = present value of costs/annuity factor
Profitability index = NPV/initial investment

Ch 8: Capital Budgeting

Incremental CF = CF with project = CF without project

Net working capital = ST assets – ST liabilities

Total project cash flows = CF from investment in plant and equipment + CF from investment in WC + CF from operations (incl. OCF & CCA tax shield)

CF O = revenues – cash expenses – taxes paid = net profit + depreciation = (revenues – cash expenses) x (1 – tax rate) + (depreciation x tax rate)

Depreciation tax shield = depreciation x tax rate = CCA tax shield

Taxable income = revenues – expenses – CCA

PV of CCA tax shield
= [CdTc/(r + d)][(1 + 0.5r)/(1 + r)] – [SdTc/(r + d)][1/(1 + r)t]
C = capital cost of an asset acquired at beginning of year 1
D = CCA rate for asset class to which asset belongs
UCC = undepreciated capital cost in year t after deducting CCA for the year
Tc = firm’s tax rate
r = discount rate
S = salvage amount from sale of asset at end of year t

PV of CCA tax shields = PV of perpetual tax shield on asset acquired in year 1 - in year t

PV = S/(1 + r)t

PV of CCA tax shield = 1/(1 + r)t x SdTc/(r + d)

CCA tax shield = CCA x tax rate

NPV = total PV excluding CCA tax shields + PV of CCA tax shield

Financial projections*
= Capital investment + Working capital + Change in working capital + Revenues + Expenses + CCA of equipment + Pretax Profit + Tax (35%) + Profit after tax

Cash flows*
= Capital investment + Change in working capital + Cash flows from operations (excl. CCA tax shield) + total cash flows (excl. CCA tax shield) + Discount factor + Present value (excl. CCA tax shields)+ Total PV (excl. CCA tax shields)

OCF (excl. CCA tax shield)
= Revenues – Expenses = Profit before tax – tax at 35%

Profitability index = NPV / -Co

Ch 10: Risk, Return of Capital

Percentage return = (capital gain + dividend) / initial share price

Dividend yield = dividend / initial share price

Percentage capital gain = capital gain / initial share price

1 + real rate of return = (1 + nominal rate of return) / (1 + inflation rate)

Portfolio rate of return = (fraction of portfolio in first asset x rate of return on first asset) / (fraction of portfolio in second asset x rate of return on second asset)

Correlation b/w x & y = (covariance b/w x & y) / (STD of x * STD of y)

Portfolio STD = ơp = sqrt(x2sơ2s + x2gơ2g + 2xsxgρsg ơs ơg)

Ch 11: CAPM

Beta of stock j = βj = (ρj,m)(ơj) / ơm or cov(rj, rm) / ơ2m = change in the rate of the return of stock j / change in the rate of return of the market

Beta of portfolio = (fraction of portfolio in 1st stock x beta of 1st stock) / (fraction of portfolio in 2nd stock x beta of 2nd stock)

Risk premium on any asset
= r – rf = β (rm-rf)

Market risk premium = rm - rf

Expected return on stock = risk-free interest rate + (beta x market risk premium) = r = rf + β(rm-rf)

rf = (required return – βrm) / 1-β

r = (DIV + capital gain) / price

fair price = (DIV + expected price) / 1+r

Variance = proportion * (estimated return – expected return)2 + …

Ch 12: WACC

Company cost of capital = weighted avg of debt and equity returns

After-tax cost of debt = pretax cost x (1-tax rate) = rdebt x (1-Tc)

WACC = [D/V x (1-Tc) rdebt] + (E/V x requity) + (P/V x rpreferred)

NPV = investment + (after-tax cash flow/rate of return)

requity = DIV1/P0 + g

rpreferred = dividend / price of preferred

stock’s beta = (expected return on stock – risk-free rate) / expected market risk premium

debt’s beta = (expected return on debt – risk-free rate) / expected market risk premium

βequity = βassets + (βassets – βdebt) D/E or βassets x (1+ D/E)

βlevered¬ = βu + (βu - βdebt)(1-Tc)D/E or βu x [1+(1-Tc)x D/E]

Paradoxes of Economics

2009-04-04T00:59:00.000-07:00

WAL-MART: A group of intellectuals tackle America’s giant

2009-04-04T00:55:00.000-07:00

Nelson Lichtenstein, Wal-Mart: The Face of Twenty-First-Century Capitalism (New Press, 2006)

On average, every minute almost 10 000 consumers visit an American Wal-Mart store. It is the largest private employer in the United States and Mexico and operates stores in eight different countries. There is no denying the ubiquity of the corporation in our everyday lives and the significant role that it plays in determining the future of our world economy. Nelson Lichtenstein attempts to explore the profound influence as well as the humble beginnings of this multinational giant in his collection of essays, Wal-Mart: The Face of Twenty-First-Century Capitalism. Lichtenstein, a professor of history at the University of California Santa Barbara, assembled the diverse group of scholars to compare their perspectives on Wal-Mart and the “global manufacturing-transport-distribution chain in which that corporation is the largest and most significant link” (x). The common theme that is expressed throughout the book is that Wal-Mart has become the template for twenty-first-century capitalism. While all of the contributors may agree on that aspect, their opinions deviate on whether this template is the source of a capitalist revolution or demise. Although each essay is written independent of each other, they are broadly organized into three sub-themes: History, Culture, Capitalism; A Global Corporation; and Working at Wal-Mart. These three themes aim to explain Wal-Mart’s phenomenal rise to the top, and their strategies to remain there.

Wal-Mart’s ruthless ascent to the top is as much attributable to favourable timing and location as its charismatic founder, Sam Walton. The first Wal-Mart discount store opened in Bentonville, Arkansas in 1962 with a simple concept; generate high inventory turnovers using low markups. In order to maintain low markups, Walton realized that it was absolutely necessary to keep labour costs at a minimum. Fortunately, the New Deal and civil rights revolution had not been firmly established in Arkansas which meant that Walton could play around with minimum wage laws. Moreover, thousands of men and women were desperate for jobs after the agricultural revolution, which made farming more capital intensive. As the years went on, Wal-Mart capitalized on events such as the failure of unionization in Arkansas, Reaganomics, and NAFTA to keep costs low. While other discount retailers and the dominant corporation of the time GM suffered from rising wages, Wal-Mart actually saw their real wages decrease in the years after 1970. This is nothing out of the ordinary as Wal-Mart has built an empire based on being different and trying new techniques to increase efficiency. As Wal-Mart grew, it tirelessly searched for innovative technologies to implement in order to improve their economies of scale. For example, the use of communications technology reduced management costs and allowed Wal-Mart to expand while still being able to micromanage each individual store. It was evident that Wal-Mart was changing the way retailers conducted business. It was only a matter of time before Wal-Mart took over the rest of the world.

For years, retailers were forced to accept the manufacturer’s prices if they wanted to do business. The emergence of Wal-Mart shifted the power towards retailers because manufacturers were fighting to get their products on Wal-Mart’s shelves. Also, the rapid growth of global manufacturers gave retailers more choice, and often a cheaper option than its American counterparts. This power shift ushered in an era of post-Fordism, a period characterized by globalization of production, extreme capital mobility, and high levels of employment insecurity and stratification. A prominent feature of the post-Fordist economy was the logistics revolution of the global distribution chain. As the proportion of merchandise being imported was dramatically increasing, a more efficient method of trade was necessary. Of course, Wal-Mart set the template with inter-modal freight transport and Radio Frequency Identification (RFID) tags. Inter-modal transport used more than one mode of transportation to move freight which Wal-Mart used in conjunction with their famous distribution centers. This method resulted in a faster and cheaper way to get inventory. Accordingly, the system of production and distribution shifted from push to pull, where the retailer tracked consumer behaviour and demanded an exact amount. Wal-Mart used this pull system to keep wastage to a minimum and constantly improved it by sharing consumer data with its suppliers. The result is greater sales and lower costs for both Wal-Mart and its suppliers. Wal-Mart’s globalization of the distribution chain continued past the supplier as they began to open retail stores worldwide. As Chris Tilly points out in his essay, one of their most successful ventures was in Mexico. In fact, it’s 2004 sales in Mexico were greater than the next three leading competitors combined (189). The point is reiterated that Wal-Mart has built an empire based on taking advantage of favourable conditions. Firstly, thanks to the North American Free Trade Agreement (NAFTA), goods could move freely between America and Mexico. Also, at the time there were few large, modern retail stores and on top of that, Wal-Mart bought the leading retailer in Mexico, Cifra. The low income population welcomed Wal-Mart because of the cheap goods and the abundance of jobs, which paid relatively well for them. There are however, limits to this success. Since Wal-Mart has established itself as a template business, other Mexican retailers have begun to modernize and adapt some of their efficient practices. As Wal-Mart’s piece of the pie is decreasing, the pie itself is also shrinking. The polarization between the rich and the poor is expanding and with the ever-present risk of economic recessions, less people can actually afford to shop at Wal-Mart. Nevertheless, Wal-Mart was a trailblazer in international expansion for retail companies, who previously preferred to stay in North America. As the section suggests, Wal-Mart has truly become a global corporation and their ideas involving globalization – intermodal transport and international establishment – have become the model for large-scale growth for companies in America.

Wal-Mart’s non-conformist ideology has historically changed the American economy and is currently revolutionizing the global economy. However, there is one issue where Wal-Mart’s refusal to let up has drawn a storm of criticism. The final theme that the essays explore is ‘Working at Wal-Mart.’. This is the aspect of the Wal-Mart template that people fear most. For years Wal-Mart has been accused of “vociferous antiunionism, embedded gender discrimination, compulsive cost cutting and near comprehensive control over workers and the workplace” (213). In Wal-Mart’s defense, these practices have been rampant in discount retailing for years. It is just that Wal-Mart has become the epitome of bad labour relations because they have so ruthlessly used them to their advantage. The author depicts working at Wal-Mart as a demanding and unjust occupation. Every single employee from top to bottom of a Wal-Mart store each faces his or her own difficulties from the authoritarian executives. The lowest paid employees, in addition to being poorly compensated, are under constant surveillance. The threat of unionization was so great to Wal-Mart that private investigators and lie detector tests were often utilized in stores. When exceptional workers seem interested in forming a union, managers find fault with their work and fire them. To ensure maximum productivity, workers are shamed in front of their peers for bad jobs and constantly taken down a notch to prevent them from aspiring towards greater pay or position. These stressing conditions are only the beginning for female workers. The culture of Wal-Mart has always been patriarchal with a vast majority of men in managerial positions. It stems back to the early days when it was thought that promotions should be reserved for men because they were responsible for supporting their families. Women have consistently been paid far less than men at Wal-Mart and are rarely given the opportunity for advancement. This discrimination has become so endemic that a class action lawsuit has been filed by 1.6 million women who claim that they have been denied promotions and raises. As the template of American business, the result of this case may set a precedent that will echo throughout every workplace in the country. The blame for all of this discrimination cannot be placed squarely on the managers. Near impossible demands are given to store managers who have a limited wage budget to spend. Managers are expected to continually cut costs and increase sales which the executives constantly monitor. A common message from executives is “if you don’t beat yesterday, management could have your job at any moment” (254). It is easy to understand why some managers might be tempted to resort to unethical practices such as the discriminatory acts towards workers. Fortunately, progress has been made in the fight for greater labour rights at Wal-Mart. Aside from North America, all Wal-Marts around the world are unionized. The difficulty in getting unions in North America is Wal-Mart’s use of leverage in denying unions to form. Unless the entire American Wal-Mart workforce (1.3 million people) does the impossible and unites together to fight for a union, Wal-Mart can always fire the employees in favour of unions. Union expert Wade Rathke advocates a ‘Wal-Mart Workers Association’ that stands up for labour rights and provides a voice for workers. The prevailing belief among unionists like Rathke is that if nothing is done to prevent to conditions that are in place in Wal-Mart today, the future is not only grim for the state of workers in Wal-Mart, but for companies everywhere.

By the end of the book, there is a clear notion that Wal-Mart has and will play a big factor in our world economically, socially, culturally, and politically. It is the model of efficiency and innovation. It is spreading its mid-west values throughout the world. It is the heartless giant that treats its employees unfairly. It is Wal-Mart. This is the message of Wal-Mart: The Face of Twenty-First-Century Capitalism. Unlike its topic of focus, the book itself is inefficient in delivering that message. That is not to say that it is not an excellent read for one who wishes to get a comprehensive look into the history, culture, and ideology of the much revered company. However, while you are being served a full plate of information and statistics, you are also being stuffed with author bias and conflicting opinions. Ironically, the appealing strength of the book doubles as its inherent weakness. The diverse group of contributors provides an in-depth examination of the retailing giant from different perspectives but this interdisciplinary approach is hardly effective. Although Lichtenstein wants to present both sides of the argument, his collection is like listening to a debate where the opposing sides are arguing different topics. While James Hoopes seems to toe the company line by declaring “there is no denying the high morale of many Wal-Mart employees” (98), David Karjanen argues that Wal-Mart “simply cannibalize[s] sales from existing firms putting them out of business” (157). Amidst all this, some essays managed to stay neutral and provide an impartial view on Wal-Mart. In Lichtenstein’s own essay, he provides and excellent example that illustrates the varying impacts of Wal-Mart. He introduces four women: a single mom who depends on Wal-Mart’s low prices; a woman who lost her job as a result of Wal-Mart forcing other companies out of business; a Chinese labourer that makes goods for Wal-Mart for low wages; and the loyal wife of a Wal-Mart assistant manager. Four women. Four lives affected. Two for the better and two for the worse. Chris Tilly also provides an interesting look into Wal-Mart’s expansion into Mexico by observing the favourable conditions for Wal-Mart’s entry but also mentioning the limiting factors that could affect its growth.

Another deficiency of the collection of essays is since the contributors explore different issues and topics, there is little to no continuity between the chapters. They are autonomous of each other and show that little planning was made beforehand to link them together. While the essays are sorted into three loosely based sub-themes, some essays are expository and do not aid in the exploration of any themes. The essays in each section can be read in any order and still have the same effect. A more effective manner would be to present them cumulatively so that each essay builds upon the next. Once you reach the conclusion, you will be able to reflect upon the themes and concepts more adeptly than before. The fact that there is no true concluding essay to this collection leaves us searching for closure on the themes that were explored.

The essays themselves were quite well-written as is expected from a group of professionals and academics. The level of language and use of business terminology was suitable for university level students but some business concepts may be unknown to the average reader. The clean organization of each essay into sub-headings made the information easier to read and comprehend. Each author provided ample amounts of evidence to support their statements and the information was presented in a variety of ways. Many real-life examples were given to show the practical implications of Wal-Mart’s influence and occasional graphics were displayed for the reader to visualize the information.

Overall, Wal-Mart: The Face of Twenty-First-Century Capitalism is definitely required reading for anyone interested in Wal-Mart. It poses a simple question: To what degree will Wal-Mart create the template for twenty-first-century capitalism and what does that mean for us. Although the answer is not presented clearly by the authors, it provides enough information for the reader to formulate his or her own opinion. Therefore in a way, the book acts like a Wal-Mart manager. Stressed to accomplish an ambitious task – investigate Wal-Mart as a template of capitalism -, the book makes the reader go overtime to do all of the work. At the end up the shift, the reader is left with a feeling that they did not get what they deserved.

CASE STUDY: International Productions Corporation

2009-04-04T00:54:00.000-07:00

CASE 4: International Productions Corporation

In this case students are asked to advise the preparer of the financial statements. As a result responses should include consideration of all users and their objectives followed by a ranking of the objectives. The analysis that follows should be consistent with the ranking of the objectives. Different ranking of objectives are possible and different rankings should be assessed on their merit; that is, the support offered in the response. Similar rankings can be evaluated differently depending on the support. Similarly, the same recommendation can be evaluated differently depending on the support. Students should be rewarded for developing arguments in the vein presented. It is important to keep in mind that the students are in introductory accounting so it can’t be expected that they will be able to develop comprehensive arguments. Even though GAAP is a constraint in this question there should be no expectation that they will know the details of GAAP (such as CICA Handbook sections). Recommendations should be consistent with GAAP principles and concepts—if they are consistent then students should be rewarded. Student responses should be written in role and should be supportive of the CEOs objectives. Coverage of the issues below is not necessarily comprehensive. Additional valid points can be raised and should be recognized.

Role: • Advisor to the CEO and largest shareholder of IPC. Given the ongoing need for capital the CEO would likely want to take an aggressive stance on accounting issues so as to give confidence to lenders and equity investors. Advisor should try and support this view but stay within the constraints. Recommendations have to supported and reasonable if there is to be credibility. Auditors are involved so any recommendations have to be consistent with GAAP and otherwise be fair, while in accordance with GAAP.
Key users: • Lenders
• Prospective lenders (IPC is expanding rapidly and will likely continue to need access to capital)
• Non-management equity investors
• Prospective equity investors
Key facts: • IPC is rapidly expanding.
• Ongoing supply of cash is required to finance new shows and existing shows in new venues. Existing and prospective equity investors and lenders will use the financial statements to assess the attractiveness of their investments or the desirability of making new or additional investment.
• The CEO owns 30% of IPC’s equity. He will have a strong interest in ensuring an ongoing supply of capital to support the company. If cash flow is cut off or interrupted IPC would be is significant trouble and the CEOs wealth would be significantly impaired.
• The issues that have to be addressed are “soft” issues. There are no obvious solutions to them and, more importantly, actual users of the financial statements cannot definitively determine that they are right or wrong.
Constraints: • GAAP. IPC is audited so the financial statements are likely to be prepared in accordance with GAAP. Bank lenders and non-management equity investors would likely require this.
Objectives: • Income maximization
• Tax minimization
• Stewardship
• Cash flow prediction
• Performance/management evaluation
• From the perspective of the stakeholders, tax minimization, stewardship, cash flow prediction, and performance/management evaluation would be a sensible ranking. Tax minimization would conserve needed cash and the other three mentioned objectives would provide users with insights about IPC that would be useful for making decisions from there perspectives (more specific discussion of these objectives would be appropriate).
• From the perspective of the CEO (the preparer) the objective of income maximization might be more important so that he can attempt to keep investors and prospective investors satisfied and willing to provide needed capital.
• (Different rankings of objectives are possible and acceptable, if supported.)
Issues: • Penalty
• CEO would want to recognize the penalty as revenue in full in the current period to increase income.
• If penalty is paid to compensate for lost revenue or profit because of the delay this treatment makes sense. By opening the theatre later than intended revenue was lost. The penalty simply replaces the revenue/profit that was been lost.
• If the penalty is considered revenue in 2004 there is also question of how it should be disclosed—segregated as an unusual item or included in ordinary revenue.
• The penalty is clearly unusual, but it may be replacing revenues/profits that will be recurring. Including the amount in ordinary income would mean that stakeholders would include the amount in any forecasts of future earnings.
• An alternative treatment for the penalty would be to net it against the cost of the theatre.
• Since the penalty is effectively a reduction in the cost IPC pays to the construction company it makes sense to record the cost of the theatre at the net amount. In this alternative the benefit from the penalty would be spread over the life of the theatre.
• This second alternative would serve an objective of income smoothing
• Accounting, What Could be Better?
• Revenue recognition from sale of tickets
► When should ticket revenue be recognized: on performance or on sale of tickets.
► CEO would prefer recognizing revenue when tickets are sold but there is little support for that critical event. Performance clearly occurs when the show is performed.
► If the show is not performed tickets would have to be refunded.
► Would also be difficult to estimate the costs associated with the revenue—would have to know future production costs and allocate them to individual tickets.
► Recognize revenue on performance—facts prevail here.
• Interest revenue
► Should the interest revenue be recognized as earned or deferred?
► CEO would want to recognize as earned because it would increase income.
► Recognizing as earned is justified because the interest is not related to the show being produced and interest will not be returned to customers if the tickets have to be refunded.
• Pre-production costs
► Should production costs incurred before the show begins its run be capitalized and amortized over the life of the show or expensed as incurred.
► CEO would want to capitalize (and amortize over as long a period as possible) to increase income.
► Capitalizing costs is appropriate and makes sense if the show can produce revenue to cover the pre-productions costs.
► Capitalizing and amortizing makes for better matching of costs to revenues.
► Evidence suggests that the show will be a success. Over $21MM in tickets have been sold for the first 40 weeks. The show has also been a long running success in Europe.
► However, the show has not yet sold enough tickets to be profitable. Taking the pre-production costs ($15MM) and the weekly operating costs ($250K) makes for total costs for the first 40 weeks of $25MM versus revenues of $21,840,000.
► Key question is how to amortize these costs. From the CEOs standpoint, the longer the better. A long amortization period would make IPC look better in the eyes of stakeholders. (The treatment used would be very difficult for stakeholders to assess.) Could argue for a lengthy run (say five years) over which to amortize the costs.
► Weekly production costs should be expensed as incurred.
► The argument for expensing is conservatism—uncertainty about the success of the show, but evidence suggests this should not be a concern.
► Tax minimization would be best served by expensing as incurred.
► Students should use the quantitative data in their analyses.
• Accounting for sale of real estate
• Issue here is whether sale of theatres is a normal part of operations or incidental.
• If it is normal then sale amounts should be included in revenue and costs somewhere in operating costs.
• If incidental the amount would be reported as a gain on sale.
• Arguments could be made for each treatment. If IPC is effectively in the real estate business because it buys and sells real estate (using the real estate for a theatre in the interim) then treating the sales of real estate as revenue makes sense.
• It is likely that revenue from sale of theatres is much more variable than revenue from selling movie tickets, concessions, etc. For that reason it would probably be desirable for stakeholders to have the different types of revenue reported separately. There is no requirement that the types of revenue be reported separately. (Segment disclosure does not apply to private companies—students are not expected to know this though.)
• The CEO would probably want to disclose little about the different types of revenue because in the current year at least the sale of theatres has generated a large amount of revenue. This could convey a level of ongoing success to stakeholders that would affect forecasts and ultimately improve IPC’s ability to raise capital.
• Classic movie library
• Revenue recognition from $1MM contract
► Revenue could be recognized on signing of contract, ratably over the life of the contract, as each movie is shown, or at the completion of the contract.
► CEO would prefer recognition on signing, but this is premature because IPC has not delivered the promised access to the movies. In other words, the obligation to fulfill the contract has not been met. If for some reason IPC cannot deliver the movies as required it does not get the revenue. (Amount of revenue, cost, and collectability are assumed not to be problems here.)
► Completed contract is too late because movies presumably would have been delivered over the four years of the contract.
► Ratably and as movies are shown are both viable alternatives.
► As the movies are shown is straightforward. IPC becomes entitled to cash when a movie is shown. Thus this method links cash with revenue. Once a movie is shown there is no uncertainty about the ability of IPC to deliver a film as required. If the broadcaster does not make full access of the library it will still be required to make a payment to make the total $1,000,000. This payment would be made and recognized at the end of the contract.
► Ratably makes sense because what the broadcaster has purchased is access to the film library over four years. Exactly when access will be used is unclear at the outset. However, the revenue is earned with the passage of time. This method could create a significant disconnect with cash flow if the broadcaster does not use films from the library over the life of the contract.
► For purposes of increasing income it is not clear which of ratably and as the movies are shown is preferred. Which method generates more revenue early will depend on how the broadcaster makes use of the library. If it uses a lot of films right away the “as used method” will generate more profit early. If it does not make use of the library right away the “ratably” method will generate more income sooner. The ratably method provides for more predictable income flows ($250,000 per year).
► Students should discuss “performance” in their responses.
• Valuation of the library
► Is the library overvalued on the books of IPC and should it be written down?
► The CEO would not want the library written down because of the negative effect on earnings.
► There has been little interest in the library in its first year. However, a contract has been signed with a broadcaster.
► The recent contract establishes a market for the content of the library, so it is arguable that other broadcasters will eventually come calling.
► The library is has an unlimited life (the movies don’t wear out) so there is plenty of time to generate revenue from the library.
► It could be argued that the lack of interest and a single contract worth 20% of the cost of the library suggests that it is overvalued and should be written down.
► While the latter argument has some validity an acceptable argument can be made for not writing down the library.
► Under any circumstances this is a challenging issue to resolve. The net recoverable amount associated with the library is highly uncertain. Can another $4,000,000 in sales be generated?

BUSINESS CASE: Angela Kellett, Barrister and Solicitor

2009-04-04T00:52:00.000-07:00

CASE 3: Angela Kellett, Barrister and Solicitor

Role: • An accounting advisor engaged by a lawyer to help with concerns about an earnout arrangement (payment for the purchase of a business based on performance after the sale has closed).
Key users: • Ms. Kellett and Mr. Jones are the only relevant users. Ms. Kellett will use the report to assist her in assessing the earnout agreement.
Key facts: • Earnout arrangement being proposed for sale of company.
• Selling price will depend on earnings after the sale closes and buyer (role is working for the seller) will prepare the financial statements.
• Ms. Kellett and Mr. Jones are unsophisticated financial statement users.
• Financial statements have a number of “soft spots” that could lead to Mr. Jones being disadvantaged by the earnout arrangement.
Constraints: • The purchaser has suggested the earnout state that the financial statements be prepared using GAAP consistently applied. A clean audit opinion would also be required. Tighter constraints are required because GAAP still provides significant leeway to the new owners that will allow them to disadvantage Mr. Jones.
Objectives: • Identify soft spots in the financial statements and propose ways to protect Mr. Jones from not receiving fair compensation for his business
Issues: • Possible non-arm’s length transactions.
• Inuvik will be a major supplier to other companies that the buyer owns.
• This is a reasonable strategy for the buyer but it creates risks for Mr. Jones because transactions between Inuvik and the other companies are not at arm’s length and the selling price used in the transactions may not be at market value.
• The new owner could require sales to occur at below market value, which would lower Inuvik’s net income and lower the payment to Mr. Jones. Doing this would be beneficial to the new owner.
• Contract should specify that sales to related parties should be at fair value and that independent verification be allowed if requested by Mr. Jones.
• Inventory valuation and write offs/downs.
• The contract protects Mr. Jones from changes in the accounting policies used for inventory because GAAP must be consistently applied.
• However, by its nature specific identification allows for manipulation because the managers can choose the actual items sold (if they are identical).
• Also a significant problem is that Inuvik has a supply of old inventory (that is still used).
• The new owner could decide that this old inventory is obsolete and write it down. This would reduce net income and the payment to Mr. Jones.
• The timing and amount of write downs is often arbitrary and with old, seldom used inventory a reasonable case could probably be made for a write down (with the auditor’s agreement).
• Mr. Jones and the buyer should determine which inventory is still useable and the earnout agreement should specify that that inventory should not be written down or off.
• New equipment purchase and accounting treatment of old equipment.
• New equipment could be amortized using a different amortization policy than the old.
• For example, the old equipment might be amortized using straight-line amortization while the new could have an accelerated method. This would not be a change in accounting policy so it would be allowable.
• Accelerated amortization would result in higher expenses in the first years compared with straight line, which would reduce the payment to Mr. Jones.
• The new owner could also choose a short amortization period.
• Mr. Jones and the buyer should agree on the amortization method that would be used on new equipment and the useful life and salvage value.
• If new equipment is purchased it result in the old equipment to be written down or written off.
• The information provided by Mr. Jones suggests that the old equipment would only be used on a limited basis if new equipment was purchased, which suggests the need for a write down.
• The amount and timing of write downs are subject to considerable judgement by the preparers of the financial statements.
• Mr. Jones and the buyer should agree to how possible write downs of the existing equipment should be dealt with in the earnout arrangement.
• Revenue recognition, returns, and bad debts.
• Inuvik should not be able to change its method of revenue recognition since the contract states that the financial statements must adhere to GAAP consistently applied.
• Change in revenue recognition policy would only be possible if the terms of transactions changed.
• There could be a problem with sales of components made using the new technology because the cost of the warranty may not be measurable (see the warranty issue).
• Otherwise there may be flexibility in setting the amount of bad debts.
• The earnout arrangement should specify the acceptable amount of provision for bad debts.
• Development costs.
• Development costs must have future benefits to be classified as assets (there are detailed rules for determining whether an expenditure can be capitalized as a development cost but students are not expected to know these rules).
• Judgement is required to determine whether they should be written down or off in a period.
• The new owner could elect to write the development costs down or off during the period on the basis that they are impaired.
• The new owner could also shorten the amortization period of the development costs.
• Both of the above two points would reduce net income and the amount of the payout to Mr. Jones.
• Mr. Jones and the buyer should agree on the status of the development costs at the time the sale closes. At that time the development costs should either be written down or off or the parties agree to no changes in how they are accounted for over the earnout period.
• Warranty costs
• Warranty costs should be expensed at the time the associated revenue is recognized (matching).
• Because the actual warranty costs will be incurred in the future it is necessary to estimate them at the time the sale is made.
• For existing products there appears to be a reasonable track record on warranty costs. Mr. Jones and the buyer should agree on the basis for determining the warranty provision (percentage of revenue that should be expensed).
• Without an agreement the buyer could increase the amount of the provision (probably by a small amount on a percentage basis).
• For the new product the issue is more serious.
• It is uncertain what the warranty costs will be for the new products and so the buyer may have significant flexibility in determining the provision.
• Revenue recognition rules allow for deferral of revenue recognition if it is not possible to make a reasonable estimate of the amount of the warranty provision.
• Mr. Jones and the buyer need to lay out the terms for the warranty on the new product. Some agreeable basis for determining the amount is necessary to avoid surprises described above.
• Goodwill
• Goodwill is not amortized but must be evaluated regularly to determine if it is impaired. If impaired the goodwill should be written down.
• Goodwill is a residual representing the amount of the purchase price of an entity that cannot be attributed to identifiable assets and liabilities. As a result what exactly goodwill is is not known.
• Because of its nature management could decide that a write down of goodwill is required. (The CICA Handbook provides rules for determining whether goodwill is impaired but students are not required to know these rules. However, because of its nature there is considerable judgement and subjectivity in the assessment).
• Management could argue that some or all of the goodwill is impaired with the impact that net income would be reduced and the payment to Mr. Jones decreased.
• Mr. Jones and the buyer should agree on the status of the goodwill at the time the sale closes. At that time the goodwill should either be written down or off or the parties agree to no changes in how it accounted for.
• Manager compensation
• The new manager of Inuvik will be the son of the new owner.
• Compensation will be a related party transaction and may not be at all related to the market value of the work the son does.
• Son could be significantly overpaid to reduce income and reduce the amount that would have to be paid to Mr. Jones.
• Earnout agreement should specify an appropriate wage for the manager, or not include manager compensation in the earnout calculation

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2009-04-04T00:29:00.000-07:00

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A date with irony, a short story

2009-04-01T22:39:00.001-07:00

The pitter-patter of the rain filled the void of silence in the bus. Lisa Springs, a 28 year-old designer, stared out the foggy widow into the darkness of the streets.
“I can’t wait ‘til I get home” she thought, “He’s the only bright spot of my day. He’s my rainbow after the storm.”
She reached up to ring the bell as the bus approached her stop. The bus stopped right in front of her small one-bedroom apartment, located in a nice middle class neighbourhood. Lisa stepped off the bus and reached into her pocket. The keys jangled a little as she fumbled through various receipts and lint in her pocket. She unlocked the door to find a dark and empty apartment.
“Shawn? Honey?” she called out. No response. She dropped all of her bags onto the ground and went straight for the kitchen. After a day of hard work, her only relief was Shawn and Haagen-Dazs. Lisa turned on the kitchen light and found a note attached to the door of the fridge.
It read:
Dear Lisa,
I’ve been sent to a business conference for the week. I think this is a perfect time for us to be apart because as we both know, things haven’t been going so smoothly between us. I’m going to be doing some serious thinking about us and I hope we can have a talk when I get back.
Love, Shawn
Lisa dropped the note in shock.
“I don’t understand it. Things are going great between us, what could ever be the problem?”
Lisa picked the note back up, and read it again to make sure she hadn’t missed anything. This time she read the end part that she had missed.
P.S. Is it OK if the guys still come over on Sunday to watch the game?
“The nerve of this guy to leave this kind of note and still invite his friends over to my apartment to watch their beloved game!” She paused. Maybe she should let them come. After all, this wasn’t the best of times to be alienating his friends. She couldn’t risk angering Shawn any more.
Two days later, and about 500 tear-soaked tissues later, Lisa was ready for Shawn’s friends to arrive for the game. She was actually awaiting this because she realized that it was an excellent opportunity to get some information from them about what Shawn was thinking about before he left. Lisa had a very odd relationship with Shawn’s friends. Lisa pretended to like them to please Shawn and they pretended to like her because of her big screen TV. The result was very awkward and fake conversations. Mid-way through the game, Lisa popped the question to them: “Hey, has Shawn said anything about me lately?”
The guys all looked at each other as if they were saying, “Uh oh here it comes”.
“Well, he has said he’s a little unhappy with you” replied Terrence, Shawn’s closest friend.
“But what’s the problem?! Please tell me, I’ll die without him!” she exclaimed.
“See! That’s exactly it, you’re too into him. Besides, he said most of the love is gone and you guys don’t have much in common anyways.”
“Alright, alright. Just tell me what to do, give me one last chance to prove to him that he still loves me.”
Another one of Shawn’s friends, interrupted the conversation.
“You know what you need, an elaborate scheme to get him back” he said.
“Yeah,” Terrence said, “Frank’s always been the smart one out of all of us.”
“Well what do you propose?” Lisa asked.
Frank looked to the ceiling as if he were in deep thought. “Well one time I was one this Internet relationship site and I met this really great girl. Long story short, it turns out that that woman was my mom.
Terence picked up that idea, “So you’re saying Lisa should go on an Internet relationship site and pretend to be another woman. Then talk to Shawn, make him fall I love with her, and reveal who she really is.”
“No I just thought that was a really cool story. But yeah, that’s a good idea.”
It wasn’t.
So the guys agreed to help Lisa, mainly for the big screen TV, but also because she deserved to be with him.
The next day, Terrence called Lisa and told her that Shawn agreed to join a site to look for someone new. Although she was a little disappointed that he was so into the idea, she was anxious to see if the plan would work.
A couple days later, Shawn logged into his account. There were only two women who had answered his ad. One was Lisa, under the name of “Miss P3rfect”, and the other was a 90 year-old woman named Mrs. Nee.
“Yikes, I’d better check out this ‘perfect’ girl” Shawn said. As the two exchanged messages, Shawn began to like her more and more. This was thanks to the fact that Terrence was helping Lisa with what to say, sometimes writing most of the messages for her. Numerous messages later, the week was over and Shawn returned home. As soon as he got home, he sat Lisa down for ‘the talk’.
“Look, we’ve had our fun but I really think its time to move on. I’m gonna be direct. I’ve met another woman on the Internet.”
Lisa tried her best to contain her smile. The plan had actually worked and she couldn’t wait to tell him her secret. This must’ve been the easiest breakup ever.
“But I still like its unfair to you” Shawn continued, “And I don’t think I can go through with this unless you are absolutely one hundred percent fine with it”
Normally, any woman would reply with: “Are you out of your mind? NO!” But of course, this was no ordinary situation.
“Sure Shawn. I realize that you need to be with someone who’s perfect for you. This girl from the Internet seems like just that and you should go for it.”
“That’s great, because I’d like you to meet her”
“I have a feeling that she’s right here”
“That’s impossible, because she’s just outside this door”
Lisa’s jaw dropped. Was she hearing right?
“Were there any other girls on the Internet?” she asked.
“Just one, she and I got along really well. She’s exactly like my friend Terrence, but I mean, who would want to date his best friend. Now if you’ll excuse me, I’ve got a date with Ira.”
As Shawn left the door and her life, Lisa sat on the couch and realized that it was her, not Shawn that truly had a date with Ira Nee.

English Vocab List C-C

2009-04-01T22:38:00.003-07:00

Word Definition Sentence
Craven Cowardly The craven boy hid under his sheets.
Credence Belief It is my credence that the egg came before the chicken
Credulous Inclined to believe anything The dim-witted person was credulous to everything she heard.
Culinary Pertaining to the kitchen The student knew he wanted to become a chef because of his excellent culinary skills.
Culmination Highest point This feeling is the culmination of all my hard work.
Culpable Guilty I find you culpable of murder.
Cupidity Greed The cupidity of the man made him keep all the money.
Cursory Hasty The man’s movements were cursory because he was in a hurry.
Curtail Shorten I’m sorry but I have to curtail this meeting.
Cynical Sneering; sarcastic The man had a cynical view of the world and hated everything.
Dearth Scarcity The Midwest is suffering from a dearth of water.
Debacle Collapse My plans for the weekend suddenly became a debacle.
Decorum Propriety The decorum of the service was very formal and mournful.
Decrepit Infirm; weakened After years of fighting, the decrepit army finally retreated.
Defection Desertion The defection of the party’s political star left them vulnerable in the upcoming election.
Deference Submission to another’s will or opinion The girl’s deference made her easily bullied.
Defunct Dead The Dungeons and Dragons club became defunct after two people showed up.
Delectable Pleasant All the food here tonight looks very delectable.
Delete Expunge I deleted all of the files on my computer.
Deleterious Harmful The toxic smoke is deleterious to my health.
Delineate Sketch This view is so beautiful that I must delineate it to remember.
Deluge Flood The onslaught of rain deluged the city.
Demagogue An orator who appeals to the passions and prejudices of his audience. The demagogue was famous for his passionate speeches that excited the crowds.
Demise Death The cancer in his lung was the demise of his life.
Demur Hesitate Before I took the plunge, I stopped and demurred.
Demure Affectedly modest After receiving praise, the man acted very demure.
Deplete Empty Our stash of food is depleting!
Deplore Lament; regret I deplore coming to this party.
Deprecate Protest strongly The man was against the idea and deprecated the entire meeting.
Derelict Abandoned vessel; social outcast; negligent All male models are stereotypically derelict.
Deride (adj.-derisive) Ridicule The group derided the boy because his voice cracked.
Derogatory Belittling The racist’s derogatory comments were unacceptable.
Desecrate Render unholy The dog desecrated on my homework.
Desiccant Drying My clothes are desiccant outside.
Destitute Poverty-stricken, deprived The destitute city was in shambles for the next 100 years.
Deviate Wander from the usual course The tourist deviated from his group to see the sites alone.
Devious Indirect; crooked The driver took a devious route to get to the school.
Dextrous Skilful The hockey player was very good because his moves were dextrous.
Diabolic Fiendish; devilish The mastermind’s plans to take over the world were diabolic.
Diagnosis Explanation resulting from a careful study of facts The doctor gave his diagnosis after the tests were done.
Diatribe An abusive speech The teacher gave her students a diatribe about coming to class.
Dichotomy Division into two parts The man took a knife and gave his steak a dichotomy.
Dictum Authoritative statement The president made a bold dictum to his people.

English Vocab List B-C

2009-04-01T22:38:00.001-07:00

Word Definition
Blithe Carefree and lighthearted
Bogus Counterfeit or fake; not genuine
Bombastic Characterized by language that is elevated and sometimes pompous
Bounty Something that is given liberally.
Brusque Abrupt and curt in manner or speech; discourteously blunt
Bucolic Of or characteristic of the countryside or its people; rustic
Buttress To sustain, prop, or bolster
Cabal A conspiratorial group of plotters or intriguers
Cache A hiding place used especially for storing provisions.
Cadaverous Suggestive of death; corpselike
Cadence Balanced, rhythmic flow, as of poetry or oratory.
Cajole To urge with gentle and repeated appeals, teasing, or flattery
Callous Emotionally hardened; unfeeling
Calumny A false statement maliciously made to injure another's reputation
Candid openly straightforward and direct
Canine of or relating to or characteristic of members of the family Canidae
Cantankerous Ill-tempered and quarrelsome; disagreeable
Capricious Characterized by or subject to whim; impulsive and unpredictable
Careen To lurch or swerve while in motion.
Carouse To engage in boisterous, drunken merrymaking
Castigate To inflict severe punishment on
Cataclysm A violent upheaval that causes great destruction or brings about a fundamental change
Catholic Of broad or liberal scope; comprehensive
Caustic Capable of burning, corroding, dissolving, or eating away by chemical action.
Celerity Swiftness of action or motion; speed
Celibate One who is unmarried.
Chaos A condition or place of great disorder or confusion
Charlatan A person who makes elaborate, fraudulent, and often voluble claims to skill or knowledge; a quack or fraud.
Cherubic having a sweet nature befitting an angel or cherub
Chafe To wear away or irritate by rubbing
Chastised To punish, as by beating
Chauvinist Militant devotion to and glorification of one's country
Chicanery Deception by trickery or sophistry.
Chide To scold mildly so as to correct or improve
Chimerical Created by or as if by a wildly fanciful imagination
Choleric Easily angered; bad-tempered.
Choreography The art of creating and arranging dances or ballets.
Circuitous Being or taking a roundabout, lengthy course
Circumlocutory Using of unnecessarily wordy and indirect language.
circumspect Heedful of circumstances and potential consequences; prudent.

English Vocab List A-B

2009-04-01T22:37:00.001-07:00

Word Definition Sentence
Argot (n) Slang The men used an unfamiliar type of argot.
Aroma (n) Scent; smell The flower released a pleasant aroma through the air.
Arrogance (n) Proud and offensive self-esteem His cocky arrogance appals me.
Artless (adj) Frank; without cunning They way she said it was very artless and to the point.
Ascetic Practicing strict self-denial as a measure of personal and especially spiritual discipline For three days the man stayed completely ascetic.
Ascribe (v) Attribute I ascribe all my success to my hard work.
Askance (adv) Distrustfully The area is so dirty that merchants report the tourists are looking askance
Askew (adj) Turned to one side The blanket was made askew after the night.
Asperity (n) Harshness; severity in temper The asperity of his voice was a signal to be afraid.
Assiduous (adj) Attentive; diligent The quiet student was always very assiduous in class.
Assuage (v) Soften; alleviate Can you assuage the weight that I’m carrying?
Astral (adj) Pertaining to the stars The astral sky in beautiful at night.
Astute (adj) Awareness; resourcefulness Living on the street those years made me very astute.
Atrophy (n) Waste away I am suffering from intellectual atrophy.
Attrition (n) Grinding down; wearing down This is a war of attrition.
Augment (v) To make greater in size, extent or quantity His computer was augmented with brand new equipment.
Augury (n) Prediction I have an augury that it will rain tomorrow.
August (adj) Inspiring awe or admiration; majestic The august presence of the monarch rang throughout the land.
Auspicious (adj) Attended by favorable circumstances Is now an auspicious time to ask for a raise?
Austere (adj) Severe; strict The teacher had a austere look to her.
Authentic (adj) Genuine I bought an authentic chair from the 16th century.
Autonomous (adj) Self-governing The mark of a civilization is when it becomes autonomous
Avarice (n) Greed His avarice made him keep all the money for himself.
Aver (v) To affirm positively; declare. I would like to aver that I have finished the project.
Averse (adj) Having a feeling of opposition, distaste, or aversion The investors were averse to taking risks.
Avert (v) Turn aside; prevent I averted the rain by taking cover under an umbrella.
Avid (adj) Having a desire or unbounded craving; greedy I am avid for a hamburger right now.
Avouch (v) Declare strongly She stood up and avouched that she was opposed to the idea.
Awry (adj) Turned to one side; askew Things went awry after he left.
Axiomatic (adj) Self-evident; evident without proof or argument It is axiomatic that people enjoy ice cream on hot days.
Baleful (adj) Deadly; evil That man an those weapons is a baleful combination.
Balk (v) Thwart; frustrate; prevent The plan to dominate the world was balked by the dog.
Balmy (adj) Mild; refreshing A balmy breeze blew by the group.
Banal (adj) Commonplace; predictable; trite His speech was so banal that half the audience was asleep.
Baneful (adj) Destructive Inside that head of his, is a baneful mind.
Banter (n) Good-humored, playful conversation. The two exchanged playful banter at lunch.
Bauble (n) Cheap toy; useless trinket That toy is a mere bauble compared to my stuff.
Beget (v) Produce offspring; cause She beget a family of five kids.
Beguile (v) Cheat; charm He beguiled his way into the building.
Bellicose (adj) Warlike The movie did an excellent job of creating a bellicose mood.
Benign (adj) Of a kind and gentle disposition The man gave her a benign smile on the street.
Benison (n) Blessing She could not go out without her father’s benison.
Bibliophile (n) Lover of books You’re such a bibliophile because you practically live in the library.
Bibliophobe (n) Hater of books The library was burned down by a bibliophobe.
Bigoted (v) Prejudiced In the 1950’s many people were bigoted because of their race.
Bizarre (adj) Strange; fantastic I had the most bizarre dream last night.
Bland (adj) Mild; boring; trite He had a bland look on his face.
Blandish (v) Persuade by flattery My secret weapon is to blandish others to get what I want.
Blasphemy (n) A profane act, utterance, or writing concerning God The man was shouting blasphemy on the street corner.
Blatant (adj) Unpleasantly loud and noisy The stereo was playing blatant music all night long.

English Vocab List

2009-04-01T22:36:00.001-07:00

Word Definition Sentence
Abate (v) To reduce in amount, degree, or intensity He abated the total number of sheep to 2.
Aberration (n) A departure from the normal His performance that night was quite the aberration.
Abet (v) To approve, encourage, and support His friends abetted him to stuffy for the test.
Abject (adj) Submissive; to shrink back, as in fear. After he was attacked, he acted very abject.
Abrogate (v) To abolish, do away with, or cancel I have decided to abrogate this program.
Abstemious (adj) Eating and drinking in moderation. He ate an abstemious amount of food tonight.
Abstruse (adj) Difficult to understand His speech was too long and abstruse for me to understand.
Accolade (n) An expression of approval The professor was received accolades from his peers.
Accost (v) To greet; To address The speaker accosted his audience before he began.
Accrue (v) To increase, accumulate, or come about as a result of growth I accrued interest in my savings account.
Acerb (adj) Bitter in taste Their coffee is always so acerb.
Acme (n) The highest point, as of achievement or development He reached the acme of his career.
Acolyte (n) Novice; young assistant My new acolyte makes many mistakes.
Acquiesce (v) To comply passively; yield She acquiesced her spot when the bully came.
Acrimonious (adj) Bitter and sharp in language or tone. He told her to go away in an acrimonious tone.
Acumen (n) Quickness, accuracy, and keenness of judgment or insight. He would make a great lawyer because he has excellent acumen.
Adamant (adj) Persistent; stubborn They were adamant that they could go first.
Admonition (n) Cautionary advice or warning. The teacher gave the troublemaker an admonition.
Adulation (n) Excessive praise The man was showered with adulation when he returned.
Adumbrate (v) To foreshadow The events that night adumbrated what was to come.
Adventitious (adj) Happening by chance It was very adventitious of us to bump into each other
Aeon (n) An indefinitely long period of time He was in the dressing for aeons.
Aesthetic (adj) Pertaining to the beautiful Makeup is an absolute aesthetic necessity.
Affable (adj) Sociable; easy and pleasant to speak to The politician proved to be an affable man.
Affluent (adj) Prosperous; rich After high school, she became the most affluent of us all.
Aggravate (v) To make worse or more troublesome. The clumsy man aggravated the situation further.
Aggregate (adj) Total; to form into a mass or whole The aggregate count of the votes was 4057.
Agnostic (n) One who believes that it is impossible to know whether there is a God. An agnostic knows that life is too complex to understand.
Alacrity (adj) Cheerful willingness; eagerness The children were bursting with alacrity outside the toy store.
Alleviate (v) Lighten; make more bearable I took an Advil to alleviate the pain.
Alluvial (adj) Pertaining to mud left by running water The ground was alluvial after the rain.
Altercation (n) Intense quarrel The two dogs got into an altercation at the park.
Altruistic (adj) Unselfish; characterized by kindness The philanthropist was adulated for being so altruistic.
Ambiguous (adj) Vague; open to more than on interpretation This story has a very ambiguous message.
Ameliorate (v) To make better I think I will ameliorate my computer soon.
Amenable (adj) Responsive to advice, authority, or suggestion The amenable acolyte listened carefully.
Amity (n) State of friendship The amity between those two is very strong.
Analogy (n) A comparison based on similarities I made an interesting analogy between cars and life.
Anathema (n) A ban, curse, or denunciation The adult announced an anathema on the child.
Anomalous (adj) Abnormal; irregular The way he dressed is anomalous from everyone else.
Antipathy (n) A strong dislike I could tell she had a strong antipathy for that man.
Antithesis (n) Direct contrast; opposition Black is the antithesis of white.
Apathy (n) Lack of interest or concern By falling asleep, you could see his apathy.
Apocryphal (adj) Not genuine or authentic The student submitted apocryphal plagiarism of another person’s work.
Apostate (n) A renegade; a person who defected The apostate left his group to join the rival group.
Apposite (adj) Strikingly appropriate and relevant His answer was apposite to the question.
Apt (adj) Exactly suitable; appropriate The essay began with an apt quotation.
Arbiter (n) Judge; one with power to judge The arbiter decided in his favour.
Arbitrary (adj) Biased; prejudiced The decision was an arbitrary one because the judge knew the accused.
Arboreal (adj) Pertaining to trees The man stood and stretched his arms in an arboreal way.

Hair by Milos Forman

2009-04-01T22:34:00.000-07:00

1. What is the significance of Claude Bukowski’s father parting words with in Oklahoma?
Before Claude left Oklahoma for New York, his father said to him “it's just the smart people that have to worry. The Lord will take care of the ignorant ones”. This advice is significant because it foreshadows the tragic ending of the movie. Berger was the one with the smart idea to help Claude escape his army base but in the end he is forced to fight in Vietnam. Claude was completely ignorant of this plan but by luck all of this happened and saved his life.

2. What is the significance of the lyrics in the song “Colored Spade”? What information can you glean about the United States in the 1960s from this song?
Based on the lyrics of the song “Colored Spade”, one can infer that the United States in the 1960s was still not readily accepting of African-Americans. The song lists several derogatory terms for African-Americans such as “jungle bunny” and “jigaboo coon”. Furthermore, the only jobs they could get were menial labour such as “cotton pickin’” and “shoeshine boy”, however he refers to himself as the “president of the United States of love”. The song ends with a list of several stereotypical foods that African-Americans enjoy. The situation presented by this song is a place of harsh segregation, where the white upper-class of America looks down on the African-Americans by calling them names, giving them low paying jobs, and sharing false stereotypes. Unfortunately, this was a reality in the 60s and the racial tensions of the time were poignantly captured in the song.

3. The song “Ain’t Got No” is about feelings of disenfranchisement. What things do the tribe feel disenfranchised from according to its lyrics?
The Tribe feels disenfranchised about pretty much everything in the world. They complain that they are invisible to the government and it is because of their race and orientation. They do not have the necessities of life such as a home and warm clothing. Furthermore, they lack the proper schooling and do not have jobs to afford for the necessities. The song epitomizes the paradox of the hippie culture. They complain about not having anything yet they do not feel compelled to do something about it. Their nonchalant attitude about life means that they don’t care but they still try to find excuses for why they are in this situation.

4. Why is Sheila attracted to hanging out with the Tribe?
Sheila is attracted to hanging out with the Tribe because it gives her the opportunity to rebel against authority. Growing up in a high-class family, she has been raised to behave and obey the rules, however with the Tribe she is free to do whatever she wants. She also wanted to join the Tribe because she was flattered that they crashed her family’s party just to see her.

5. What do the following initials stand for? LBJ, IRT, LSD, CIA, FBI. What is the significance of including them all beside each other?
LBJ was the initials for the thirty-sixth president of the United States, Lyndon Baines Johnson. His term in office spanned a majority of the sixties, from 1963-1969. In the song “Initials”, he “took the IRT down to fourth street USA”. The IRT stands for the Interborough Rapid Transit, which is the name of a subway line in New York. LSD was a popular drug of the 60s and stands for lysergic acid diethylamide. The CIA (Central Intelligence Agency) and FBI (Federal Bureau of Investigation) are two government agencies based in America. The significance of including them beside each other is to emphasize the contrasts of the two sides of the 60s. On one end, there is the side of law and order with the President and government agency but on the other end is the people, who rode the IRT and endulged in LSD. There was such a disconnect between these sides, which led to the oppressed youth to rebel against authority.

6. What internal conflicts surface during Claude’s LSD “trip”? Based on the scene, what moral dilemmas does he seem to be facing?
Sheila offers Claude with an opportunity to evade the military draft by marrying her. In Claude LSD trip, he fantasizes that he is marrying Sheila while a group of hippies dance around them. His moral dilemma is whether he should drop out of the draft and stay with the group of hippies or continue with his current plans of fighting in Vietnam.

7. Explain the irony uncovered by the end of the movie. Connect the very beginning to the very end.
The irony at the end of the movie was that Berger, an advocate of the anti- war effort was killed fighting in the Vietnam War. This event is foreshadowed by Claude’s father’s advice that “it’s just the smart ones that have to worry”. Berger’s plan to get Claude out of the base but in the end he is hurt it. Claude who just ignorantly follows orders, whether from his superiors or from Berger, is saved from the war.

8. In this film, music plays a very prominent and very important role. How does this situation mirror the 1960s era? What function did the music serve for “hippies”?
In the film, the characters used music to express their thoughts and views. Similarly, the hippies of the 60s expressed themselves through their music, sharing their views with the rest of the world. Songs that represented what the widespread beliefs of the hippies became anthems that were sung across the country. In a time where the government would not listen to what the youth had to say, they could have their voices heard through the use of song. Music also served as an escape from the depressing reality. Mixed with the use of drugs, hippies were taken away into a fantasy dream world when listening to the psychedelic melodies of the music.

Physics Equation Sheet

2009-04-01T22:33:00.001-07:00

Kinematic equations
1) v2 = v1 + a ∆t
2) ∆d = ½ (v1 + v2) ∆t
3) ∆d = v1 ∆t + ½ a ∆t
4) ∆d = v2 ∆t – ½ a ∆t²
5) v2² = v1² + 2a ∆d

Cos Law
c² = a² + b² - 2ab cos C

Sine Law
sin A = sin B = sin C
a b c

Newton’s 2nd Law
F = ma

Force of Gravity
Fg = G (m1)(m2)
r²
G = 6.67 * 10-11 N*m²/kg²
mEARTH = 5.98 * 1024 kg
rEARTH = 6.38 * 106 m

Friction
Ff = μ FN

Hooke’s Law
FS = k x

NCAA vs NBA basketball

2009-04-01T22:31:00.000-07:00

Every year, people are comforted by the reassuring images of blooming flowers, and melting snow and it can only mean one thing: the return of college basketball. Ah yes, the sounds of swooshing nets and cheering fans can excite even the most casual of fans, which is more than can be said about its professional counter parts. Plain and simple, college basketball is more exciting to watch than the NBA.

Sure watching millionaire players dunking over each other may be fun, but ultimately there’s one key quality missing: Passion. Passion is what entices the fan to keep watching, passion is what brings a human quality to these super athletes, passion is what the NBA lacks. With their multimillion-dollar contracts already guaranteed, players don’t seem to care anymore and don’t try as hard as they could. *cough* Vince Carter *cough*. In college, these players are playing simply because they love the game. Who else would choose to endure morning practices and long road trips? This is quite evident during the games where players are running hard and diving into the crowd for balls. When was the last time you saw Shaquille O’Neal diving into the crowd? Then again, what sane person would want 300 plus pounds flying in their face.

Perhaps the most exciting event in sports today is college basketball’s annual championship tournament, also known as March Madness. This tournament pits the nation’s top 64 teams against each other in single elimination rounds. Last team standing becomes the national champions. This is a refreshing change from the boring best 4 out of 7 process that the NBA uses, which can drag on throughout months and ultimately lets the best team come out on top. However, in one single game, anything can happen. Even the worst of teams can get lucky and upset a heavy favourite. This as we all know, results in exciting TV. Another attracting element is the emotion of the players in the collegiate level. It is commonplace in many games to see players embrace each other in sheer happiness, while on the other side, the occasional tear after a heartbreaking loss. Seeing this reminds us that they are just like the rest of us, that 19 year-old on TV could just as likely be my neighbour. Meanwhile, NBA players today are often idolized and expected to be perfect. Nothing can bother or affect them because they are on another level.

The NBA may be more skilled and experienced, you can’t argue with the interactive experience that college basketball provides. Watching college basketball may rekindle what you originally loved about the game, instead of focusing on what is wrong about it (can anyone say the Raptors?).

For Your Convenience

2009-04-01T22:30:00.001-07:00

Gift giving is possibly one of the hardest things a person can do. Especially for Valentines Day when the gift is expected to have some meaning and thought in it. It doesn’t help if you’ve completely forgot Valentines Day either. Luckily, here are the top five gifts you can get at your local convenience store that will still make you look like the sweetest person in the world.

5. A chocolate bar – Who doesn’t like some good chocolate on Valentines Day? Just because it wasn’t made in Belgium or there isn’t any fancy wrapping on it doesn’t make it any less special.

4. Magazines – Give the gift of literacy by picking out some of their favourite magazines. Be sure to tab any specific pages you want them to read such as “How to forgive someone when they obviously forgot Valentines Day”

3. Some lottery tickets – Try to come up with some cheesy line when you give the gift like “Baby I felt like I won the lottery when I first met you”. Maybe they’ll forget the fact that you just got them lottery tickets for Valentines Day.

2. Buy a card and write an IOU in it – If you’re really out of ideas try to stall for time by writing “I owe you…” in the card, and promise something really nice. That way the person actually receives something without you having to get anything.

And if all else fails…
1. A hug – No not from the convenience clerk but to your significant other. A hug tells that person that no material good can ever adequately express my feelings and the greatest gift of all is you two being together. It also means that you ran out of time and money but no one has to know.

Symbols in Lord of the Flies

2009-04-01T22:28:00.001-07:00

Conch – The conch is a symbol of order and authority. It gives whoever is holding it, the power and respect to speak. This is crucial to the boys as it is one of the only things keeping them civilized. Once it is broken, all authority and civilization is lost on the island.

Island – Since Lord of the flies is an allegory, the island represents our world. On the outside, it seems perfect but when you look closely, it soon becomes a terror. On the island, there is a lot of destruction of the island by the boys and that shows how man has destroyed our environment.

Jungle – The jungle is a vast and unknown area that seems to frighten the boys. In particular, the creepers are often mentioned as scary to the boys and it represents how the boys are still young and are afraid by things as little as plants.

Scar – The place that the plane crashes in is also known as the scar. It is a constant reminder of the destruction that man can create and the place that they came from. Calling it the scar could mean that it lasts forever and will not go away, just like their experience on the island.

Fire – Fire represents commonsense and is their only way of rescue. It is a product of their technology and knowledge and represents what the children can accomplish if they work together. However, it also leads to the destruction of the island, which also represents the destruction that man can cause.

Simon’s hiding place – This is the place where Simon goes to get away from it all and where he has his seizures. This is sort of his place of freedom where he can be himself and not hide anything. It is also the site of the lord of the flies which shows that no matter where you go, you cannot escape man’s inherit evil.

Lord of the Flies – The severed cow’s head known as the lord of the flies is a representation of evil on the island and within man. The name lord of the flies is also a reference to Beelzebub, a demon in hell thought to be the devil. The Lord of the Flies is the ‘beast’ in each of the boys and the evil in every man.

The beast (Jack’s) – Jack believes that there is an actual beast but does not believe that it can harm them. Nevertheless, he is determined to kill it but is still afraid. His beast represents the unknown and how we are curious about it yet afraid to find out.

The beast (Simon’s) – Simon is the only person to realize that there is no beast and that it is inside each of the boys. His beast represents how everyone has their inner evil and that no one is truly good. Even those as pure as Simon still have a beast inside of them.

Face paint – Later in the novel, the boys begin to paint their faces and participate in a ritualistic festival. The face paint represents their decent into savagery as it is often associated with uncivilized tribes. They are also not themselves anymore and look like they have become someone else.

Spear, knife, rock – These are all examples of useful tools that can, if used wrongly, lead to a lot of destruction. For example, the spear can be used to hunt for pigs but instead it is sometimes used as a weapon for each other. At first, the boys used them for good but as the book went on, they began to commit evil with them. This shows how the boys started as a civilized group and soon turned into savages.

Piggy’s glasses – Piggy’s glasses are a symbol of intellectuality, control through reason, and rational thinking. They are used to start fire, which is a symbol for technology on the island and a beacon of hope to be rescued.

Wild boar – The wild boar is essentially their source of food and it also represents the struggle for survival. The children work so hard and spent so much time just trying to kill a pig.

The dance – The dance represents their descent into savagery because like the painted faces, it is often associated with uncivilized tribes. They forget all about rules, order, and their problems in a sort of ritualistic dance.

The choir procession – The choir procession acts like Jack’s little army that carries out his orders. It shows that although Jack has many ideas and aspirations, he does not want to do any of the work. This is typical of many humans who expect to get everything they want without working for it.

Water (the sea) – The water is like a boundary that separates the boys from the civilized world. Although it is the barrier that keeps them on the island, it is also the place of resuce as they must look for passing ships in the water.

Red rock in the ocean – The red rock is a place where civilization and order gets lost. The two most important parts of order on the island, piggy and the conch get killed and crushed respectively on the red rock. Like the castle rock, the red rock is composed of rocks and is very cold and dead.

Feast – The feast is a symbol of how man easily gives into their desires. The people of Ralph’s tribe could not resist the thought of a huge feast and gave up their royalties to Ralph to go to Jack’s feast.

Killing of mother pig – This is another act of savagery as instead of killing a boar, they kill a mother pig and her babies. The thought of killing has taken over their minds and now they’ll just kill anything. This goes even further later on as the boys begin to get killed by each other.

British officer – The British officer is really the only adult contact in the book. Since he has came to rescue them, the officer is instantly related to hope and safety. For once, the boys finally feel safe are brought back to reality.

Piggy’s auntie – Piggy’s auntie is a constant reminder to the boys of the adults and society. She is their connection back to the real world and acts like a parent would. Whenever the children think of doing something wrong, he reminds them of what his auntie would think which makes Piggy like the parental figure. This probably attributes to the boys hatred of Piggy.

Pig runs – The pig runs help the boys catch the pig and it represents how humans need so much help to survive. In this case, the boys must be practically led to the pigs by the tracks and even then it’s a struggle. Like in real life, where most humans have their food mostly given to them.

Grammer Terms

2009-04-01T22:27:00.001-07:00

Noun - word that refers to a person, place or thing

Pronoun - a word that is the name of a person, place, institution, etc. and is written with a capital letter

Main Verb – a word or group of words that expresses an action, an event, or a state.

Adjective - a word that describes a noun

Adverb - a word that adds more information about place, time, manner, cause or degree to a verb, an adjective, a phrase or another adverb

Conjunction - a word that joins words, phrases or sentences

Preposition - a word or group of words used before a noun or pronoun to show place, position, time or method

Interjection - a short sound, word or phrase spoken suddenly to express an emotion.

Article - the words a and an

Four Kinds of Sentences - declarative, imperative, interrogative, and exclamatory

Subject - a noun, noun phrase or pronoun representing the person or thing that performs the action of the verb

Predicate - a part of a sentence containing a verb that makes a statement about the subject of the verb

Object - a part of a sentence containing a verb that makes a statement about the subject of the verb

Phrase - a group of words without a finite verb, especially one that forms part of a sentence

Clause - a group of words containing a subject and a predicate and forming part of a compound or complex sentence

Transitive - type of verb that directly affects a noun

Intransitive - designating a verb or verb construction that does not require or cannot take a direct object

Copula - a verb such as be or become that connects a subject with the adjective or noun that describes it

Infinitive - the basic form of a verb

Gerund - a noun in the form of the present participle of a verb (ending in -ing)

Participle - a word formed from a verb, ending in -ing

Franklin Delano Roosevelt

2009-04-01T22:26:00.000-07:00

Franklin Delano Roosevelt, the 32nd president of the United States of America, was one of the most influential and greatest American presidents. Hated by his critics, and loved by his supporters, Roosevelt served a record 4 terms in office from 1933-1945. In that time, his importance was shown in guiding America through arguably it’s two worst epidemics, World War Two and the Great Depression. Despite guiding America out of the ravages of the Great Depression, many opponents accused Roosevelt of being socialist, the enemy of American capitalism. While there is some truth in it, to accuse a great American president of this would be absurd. However, it is true that, Franklin D. Roosevelt was USA’s most socialist and left-wing president in history.

Roosevelt’s famous plan for America, also known as the ‘New Deal’, introduced several socialist reforms to America. Roosevelt first proposed this in a speech before the 1933 election. It called for drastic measures to heal the weak economy and bring America out of the depression. However, this deal was harshly criticized by its opponents who deemed it un-American because of its unprecedented ideas. In fact, the Supreme Court rejected many of the legislatures because it violated the constitution. It brought intense government control and regulation to most of the country’s economy. Numerous programs such as the National Recovery Administration (NRA), and the Federal Deposit Insurance Corporation (FDIC) promoted agricultural and business regulation, price stabilization, and public works. Most of the land became owned by the government which was extremely left-wing. The United States had never experienced such a thing. To raise more money for public works, Franklin Roosevelt also had to raise taxes. As a left-wing politician, he believed that America needed higher taxes to get out of the depression.

Throughout all of his terms, Franklin Roosevelt would always try to gain as much power as possible for him and the government. To Roosevelt, America needed the government to control many aspects in order for it to get out of the Great Depression. Consequently, the government took over the banks, social welfare, utilities, securities, and other economical factors. In his Emergency Banking Bill, Roosevelt received control over banks, currency, and foreign exchange. Furthermore, Roosevelt’s Industry Recovery Act let the government intrude on businesses the much higher levels. Other bills such as the Executive Reorganization Act only gave more power on his stronghold on America. It is very obvious that Roosevelt did not believe Americans could not get out of the depression by themselves. Instead they needed strict rules and control from the executive branch and himself.

No matter what Franklin Roosevelt did, he would always look out for the working class. This was largely what helped him rise to a landslide victory in 1933 and in his following elections. The working class devastated the most during the Great Depression and they looked towards Roosevelt as a saviour. In speeches, he would call out the “forgotten man at the bottom of the economic pyramid” and promise economic relief. In fact, the second part of his New Deal was solely dedicated to social and economic legislation to benefit the mass of working people. After he was elected president, Roosevelt began establishing many relief programs such as the WPA (Works Progress Administration) and the CCC (Civilian Conservation Corps). These programs greatly lowered unemployment in the nation by employing thousands of workers for building and construction. In fact, the CCC alone employed over 2.5 million out-of-work men to help and preserve the environment. This showed that not only was Roosevelt concerned with the economy, but he also wanted to help the environment. Another crucial part of his New Deal proposed programs to aid tenant farmers and migrant workers, other groups that were hit the hardest by the depression. This all followed Roosevelt’s socialist views of equal rights for the whole public, giving no preference to the upper-class.

There’s no doubt that Franklin Delano Roosevelt was a great American president. Whether he did it with traditional American ways is still in question. Roosevelt himself even said, “Let it be symbolic that in so doing I broke tradition” Roosevelt was assigned the tough task of getting America out of the depression and that’s exactly what he did it. By giving the government total control over many aspects of the economy, he slowly eased it back to strength. The workingman also got a well-deserved hand, by providing them jobs, and better services. Even if it meant raising taxes, which primarily affected the upper class. Ironically, in America’s darkest times, their most socialist president helped them regain strength in their capitalist system. Never one that was afraid to stray away from capitalism, Roosevelt may be the most socialist president America will ever have.

How to be an Entrepreneur

2009-04-01T22:24:00.000-07:00

One-page summary

http://www.2shared.com/file/5233628/596df2b7/Unit_4_-_Becoming_an_Entrepreneur.html

Richard Bedford Bennett

2009-04-01T22:22:00.000-07:00

"I propose that any government of which I am the head will at the first session of parliament initiate whatever action is necessary to that end, or perish in the attempt."
-- R.B Bennett, June 9, 1930, on eliminating unemployment.

Canada’s 11th Prime Minister, Richard Bedford Bennett, had the difficult task of guiding Canada out of its difficult times in the 1930s. From, August 7, 1930 to October 30, 1935, Bennett’s main objective as Prime Minister was to get Canada out of the “Great Depression” which peaked during the early 1930s. Many attempts to help the unemployed such as the $20 million aid and the Relief Act, which gave single unemployed men a subsistence living, were among his many plans to help the people of Canada. However, his attempts to help Canada as a country were largely unsuccessful such as preferential tariffs, which failed to increase trade exports. Bennett’s new deal promoted minimum wage, health, unemployment insurance, and government regulation of banks and trade. Unfortunately, it was too little too late as Bennett’s Conservatives lost to Mackenzie King and the Liberals in the 1935 election. The Great Depression would forever be synonymous with Richard Bennett and the Conservatives. Bennett studied at Dalhousie University and got a teaching certificate at the New Brunswick provincial school. He worked as a teacher and principal in New Brunswick before moving to Calgary to practice law. Bennett became a member of legislature in 1909 and had constituencies in Calgary and Calgary West. In 1921, Bennett was appointed Minister of Justice by Prime Minister Arthur Meighen and became Attorney General. He became the Conservative party leader in 1927 and was elected Prime Minister in 1930. Among his achievements are the creation of the Bank of Canada, Canadian Wheat Board, and in 1941, he was made a Viscount. Although he was unable to fix Canada’s economy, Bennett did all he could to help the individuals of Canada. Bennett responded to all of the letters sent to him during the depression and replied with money inside. Throughout his successful life, Richard Bennett never married and stayed single until his death.

Labour Unrest in 1920s Canada

2009-04-01T22:21:00.001-07:00

After the Winnipeg general strike, the Canadian government became aware that working conditions were not good. A major labour issue was the exploitation of child labour. In 1929, the law was passed declaring that children under 14 years old were prohibited from working in factories. However, young children continued to work in the farming and fishing industry. Some of the kids that were treated to most unfairly were known as the ‘Home Children’. Home children were British orphans that were sent to Canada to start a new life. These children were placed under little supervision but were still overworked. The Co-operative Commonwealth Federation leader J.S Woodsworth declared “We are bringing into Canada in the guise of philanthropy and turning them into cheap labourers”. The problem was apparent, and many Canadians believed that the government did not do enough to solve it. New parties began to form, speaking for the interests of specific groups such as farmers, and French-Canadians. The United Farmers enjoyed success in the west when they formed the governments of Manitoba and Alberta in the 1920s. The United Farmers promoted social welfare measures like old-age pensions and widow’s allowances. In the East, Maritimers did not have the luxury of having a party speak for their interests. Industrial workers were working under low wages and poor working conditions. Furthermore, thousands of jobs were being lost and little development was occurring. Maritimers finally decided to do something so they grouped together to form the Maritimes Rights Movement. The movement pressed the federal government to act on Maritime concerns and King responded with the Royal Commission on Maritime Claims in 1926. This document called for assistance for the coal and steel industries and improvements to ports. Thanks to these new labour conscious parties, workers across the country finally began to get to conditions that they deserved since the end of World War One. Labour would continue to be a glaring issue for Canada but because of the new policies set by these parties, Canada was a lot closer to fixing it.

William Lyon Mackenzie King

2009-04-01T22:19:00.000-07:00

“The decision of Canada on any important issue… should be made by the people of Canada”
-- Mackenzie King, Imperial Conference, 1923

A fiery and passionate politition, William Lyon Mackenzie King transformed Canada from a British dominion, into a self-governing country. Born on December 17, 1874, in Berlin, Ontario, King would become an influencial figure in Canadian history. King studied at the Universities of Toronto and Chicago before getting a Ph.D from Harvard in Political Economy in 1909. At only 26, King became Canada’s first deputy minister of labour and the editor of the Labour Gazette. Throughout his life, his constituances included Waterloo North, Ontario; Prince, Prince Edward Island; York North, Ontario; Prince Albert, Saskatchewan; and Glengarry, Ontario. As a devoted liberal, he became the party leader in 1919 and was elected tobe Prime Minister on December 29, 1921. His term was shortly interupted during the ‘King-Byng” crisis in which he resigned on June 28, 1926. He returned as Prime Minister on September 25, 1926 after defeating the conservaties, who took over after he resigned, in a landslide. King was beaten by Richard Bennett and the Conservatives after his inability to deal with the Great Depression. Canadians re-elected King as Prime Minister on October 23, 1935 where he remained in power until November 15, 1948. During his three separate tenures as Prime Minster, King achieve many political accomplishments. Among his most important documents passed, was the Balfour declaration and the Statute of Westminster. Both documents led to the continuing independence and identity of Canada. King’s famous fight with Governor General Byng led to his resignation and fueled King’s belief that Canada should be more independent of Britain. King also created the Old Age pension in 1926, Unemployment insurance in 1940, and the Family Allowances Act in 1944. In 1930, King made history when he appointed Cairine Wilson as the first female senator. In the public eye, King appeared to be quiet and mannered but in his personal life, he was a hot tempered man who greatly believed in the spiritual world. King never married in his life and consulted a a psychic before any major decisions. William Lyon Mackenzie King retired from politics in 1950 and died on July 22, 1950.

1920s economic roller coaster

2009-04-01T22:18:00.001-07:00

For the most part, the 1920s was a period of extreme boom with Canada creating record quantities of crops. Unfortunately, Canada was too dependent on its staple products such as wheat as an export. When competition from the United States and Australia came to export wheat, less countries were buying Canadian wheat which hurt Canada’s economy. Furthermore, during the boom, Canada’s dependence on America rose as well. The United States was now Canada’s largest export market and anything that happened to America’s economy would directly affect Canada. Canada’s dependence grew because of the weakness of European countries as a cause of the war. Nevertheless, Canadians kept their confidence in the economy as more and more investors were buying stock. Then, in the months leading up to the great depression, the stock market became an economic roller coaster. It all began on March 25, 1929, when the first of several mini crashes occurred. Each mini crash would eventually recover only to have another mini crash come. It was a nervous time for investors around the world as their financial life was at stake. During the summer, the market appeared to stabilize and it appeared that investors had survived the roller coaster, unfortunately, the “ride” was ready for it’s biggest drop. By September, the bear market was firmly established meaning that the market was steadily decreasing. On Thursday October 24, 1929, a record 12,894,650 shares changed hands on the New York stock exchange. That was almost 4 times the amount of the previous record set in the previous year. By the end of the day, some stocks had recovered a little giving some relief in a day of panic. On Monday, October 28, 1929, the trend continued with 9.25 million shares trading places. But unlike Thursday, the losses did not recover which set the stage for Black Tuesday, the most infamous day in Wall Street history.
The are different explanations on what happened on Black Tuesday and the reasons why 16.4 million shares were traded, smashing the 5 day old record. At the time, most investors were buying stock on a margin which meant that they only paid at a fraction of the cost for their stock. Instead of paying full price, people could pay ½ and pay the difference when the stock increased in value. However, if the stock decreased in value, the investor would have to cover the loss as well as the remaining margin. On Tuesday, businesses were asking for money from the brokers who were asking for the margin from the shareholders. The shareholders who were unable to pay the margin quickly sold their stock which decreased the stock’s value even more. There was a sort of snowball effect where as more people sold their stock, it forced even more people to sell theirs. Thousands of companies had their stock values plummet as a result, some lowering as much as 50%. Little did they know, that this was only the beginning of a long and destructive crash. For several years after Black Tuesday, the market continued to crash and in 3 years, the market had lost a total of 89%. Today, financial historians and university classes study the roller coaster and the factors surrounding it. The historical eight months from March to October will forever be known as the day that changed the world.

Is picking a number randomly really random?

2009-04-01T22:13:00.001-07:00

Question:
Is picking a number randomly really random?

Materials:
1 hat, 1 sheet of paper, 1 pencil

Method:
Step 1- Tear up ten equally sized sheets of paper.
Step 2- Write the numbers from 1-10 on each sheet.
Step 3- Put the papers into the hat.
Step 4- Pull papers out of the hat 30 times.
Step 5- Record each time

Results:
#1 #2 #3 #4 #5 #6 #7 #8 #9 #10
IIIIIII III II II III III IIII III I II

My Conclusion:

After drawing numbers 30 times, I saw that 1 came up the most. It clearly wasn’t an accident because it was 3 (1/10) more than the second place number which had only 4. The lowest number was 9 with only 1 drawing of that number. The median of the results were 3.5 which was awfully close to the average of 3. So in conclusion, the answer to the question of “Is picking random numbers really random?” would be no, not really according to my investigation.

Grade 7 Geography Terms

2009-04-01T22:10:00.000-07:00

Sustainable Resource: Resource that cannot be renewed or reused by the government.
Desalination: Process of turning salt water from oceans into fresh water.
Introduced Species: A species brought into a new environment.
Biotic: All living thing in an ecosystem.
Abiotic: Inanimate objects in the ecosystem.
Habitat: A place where living things live.
Biome: A vegetation region.
Ecology: The study of ecosystems.
Ecosystem: Arrangement of plants and animals.
Photosynthesis: Process of plants changing water and carbon dioxide into their food.
Balance of Nature: The balance of plants and animals in an ecosystem.
Extinct: No longer existing.
Endangered: Almost extinct.
Fragile ecosystem: An ecosystem that needs many things to survive.

Marks Calculator in Excel

2009-04-01T21:47:00.000-07:00

Here's a simple marks calculator I made in Microsoft Excel. You can tweak it around to fit your needs.

http://www.2shared.com/file/5233503/fecff7e4/Marks_Calculator.html

Miseries of Life

2009-04-01T21:33:00.000-07:00

I wish I were a simple frog,
a simple frog upon a log.
'Cuz if i were a simple frog,
I wouldn't have to walk thy dog

Thy dog will walk upon thy log
and I will see upon that log
a simple frog beside my dog
Oh how I wish I were that frog

The frog jumped up and off the log
and in the mouth of my pet dog
and croaked two times just like a frog
that was eaten by my dog.

So I am glad I'm not a frog,
Cuz sitting simply on a log
is far no better than a frog
that can be eaten by my dog.