The Poverty Rate Of Texas Children - 1277 Words

â€Å"The fact that our poverty rate is increasing is something that I think is very alarming to those of us who care very much about the health and welfare of children and see the investment in children as really the future of Texas,† said Beth Quill, executive director of Children’s Defense Fund Texas. This goes to show basically a full quarter of Texas children are poor based on these statistics. Poverty is very important because these children are the future of this world. Children who are born into poverty are more likely to live in poverty and less likely to have consistent employments as adults. To prevent this from happening there are 3 solutions that I have done extensive research on to make this happen. Therefore these solutions consist of raising the minimum wage, expanding Medicaid and reforming the way the criminal justice system works. Based on the statistics of Poverty on Texas, I concluded that the poverty rate of Texas children is 7.5% points higher tha n the poverty rate of the total Texas population. At the age of less than 18 years old, 25% of the children in Texas are dealing with poverty. The poverty rate for Texas is 17.5% which is a huge number when it comes to this situation. There are many different causes of poverty in Texas. These include droughts and flooding’s, natural disasters, social inequality and even having to do with the government by having to afford primary healthcare, food, education, housing and essential goods. Health is a hugeShow MoreRelatedCalifornia And Texas Welfare Programs906 Words   |  4 Pagesand Texas Welfare Programs Poverty and unemployment are two national issues. Every counties are trying to solve them because these problems can lead to some serious problems later such as criminal problems, health problems, or economic problems in countries. There are 50 states in the United State, and government of every states have welfare systems under control of the federal government for helping poor people and unemployed people pay for their living costs including medical cost, children careRead MoreChild Rearing Practices By Margaretha Schurz1656 Words   |  7 Pagescharity for the working women who could not stay home to raise their children, privately run Frobelian kindergartens became more commonplace (O’Conner, 1995). Today kindergarten, with the unified starting age of five, has become the common standard in the United States; but once again an educational gap has occurred in children prior to age five (Baker Institute, 2010). Furthermore, the educational gap among children of poverty, p rior to starting preschool is more alarming and has prompted governmentRead MoreWhy Not Everything Is Better998 Words   |  4 PagesWhy Not everything is better in Texas Throughout the years Texas has been proclaimed as a strong and developed state that could rank amongst the top countries of the modern world. Individuals from Texas praise the state as the best state in the nation in every matter the states might be comparable. This belief is just an illusion; Texas might indeed rank high on some important aspects of a state, but ranks low on most other significant matters. Texas has policies with low taxing, low spendingRead MoreWhy Texass Education And Health Care System Will Improve Our State1392 Words   |  6 Pagesdifferent, right? Texas has been a conservative state for far too long and obviously it’s not a hundred percent the right answer. What can we do? We can start by pushing for a better educational and government system. Yes, this will raise our taxes, but, wouldn’t you pay more for better in quality of service. It is hard for people to succeed in a conservative state because the government is worried about politics and the states state budget. In this paper, we will look at why Texas needs to reformRead MoreThe United States : A City Of Great Wealth And The Great Poverty894 Words   |  4 PagesBackground Within the United States, in 2014 we had 1 out of 7 children born into poverty (C., 2016). That is an outstanding amount of children starting life out with a disadvantage. Statistics show that the U.S. has higher poverty rates than other developed countries (O., 2014). When a child is born into poverty, they are faced with many challenges that people are not very cognizant of. Children living in poverty usually have trouble accessing proper healthcare, education, and nutrition. These simpleRead MoreThe Teenage Epidemic Of Texas756 Words   |  4 PagesThe ongoing teenage epidemic afflicting Texas is comprised of two separate yet interconnected movements: a 20-year period of high rates of pregnancy involving teenagers, and a more recent surge in limiting reproductive health care access through state legislative actions over the past 5 years. Texas has the third highest number of unplanned pregnancies in the United States. Most of these unintended pregnancies are greatly concentrated among unmarried teenagers from low socioeconomic areas. In 2014Read MoreWhat Is The Total Population In The City Of Murphy, Texas?1628 Words   |  7 Pagesestimated total population in the â€Å"City of Murphy, Texas as of July1, 2016 was 20,482† (Bureau, U.C., 2017), compared to the â€Å"total population of Texas, which was 27,862,596 in the year 2016† (Bureau, U.C., 2017.) and the â€Å"United States population as of today, October 3, 2017 of 326,102, 454† (Bureau, U.C., 2017). There was data for The State of Texas on the United Census Bureau’s website, for July 1, 2016, but there was not a comparison for Murphy, Texas so the last comparison was April 1, 2010. As ofRead MoreInternet Research Assignment : High Teen Pregnancy Rate908 Words   |  4 PagesThe first article came from the Dallas Observer and is titled, â€Å"Here’s How to Fix Texas’ Sky-High Teen Pregnancy Rate† (http://www.dallasobserver.com/news/heres-how-to-fix-texas-sky-high-teen-pregnancy-rate-7626551). The author of the article, Eric Nicholson, is extremely critical of Texas’ sexual education program and voices his criticism with heavy use of sarcasm. This September 28, 2015 article was prompted by Texas’ recent decision to provide low-income teenagers with access to free birth controlRead MorePoverty Is A Social Problem957 Words   |  4 PagesStates is the wealthiest nation in the world, but yet poverty remains prevalent. Childhood poverty affects every aspect of their life. â€Å"Poverty is not having income for basic needs, food, medical care or basic needs and housing† (Crosson-Tower, 2014, p. 59). Poverty is affecting thousands of Americans every day, and it isn t sparing anyone of a particular race, age or gender, leaving people on welfare, and without homes, or transportation. Poverty is a crisis that deserves attention from everyone,Read MoreMigrant Youth : The United States847 Words   |  4 Pagescountries in search of the American Dream. This dream entails the belief that their lives can be improved because of the various amounts of opportunities in United States. Due to this, thousands of migrant youth move from Central and South America to Texas in search for a better life. By crossing the Rio Grande border, the migrant youth are escaping the corruption and violence in their native country. Although the migrant youth are in search of a better life in America, the United States has a policy

The Fear Of Death By Elisabeth Kubler Ross - 1231 Words

Death in Literature What humans don t understand, they fear or block out. People have a variety of different beliefs on what happens after you die. For example ones who follow the religion of christianity believe they will go to heaven, and the ones who follow hinduism and buddhism believe in reincarnation. No one has facts or evidence on what happens to you after death, so it is usually feared. In these three different works of literature, â€Å"On the Fear of Death†, â€Å"Allegory of the Cave†, and â€Å"The Beast in the Cave† they all have one thing in common. What these three works of literature have in common is death. â€Å"What has changed is our way of coping and dealing with death and dying and our dying patients.†(Kubler-Ross 109) In â€Å"On the Fear of Death† by Elisabeth Kubler-Ross, she discusses the changes that have happened over the past few decades. The author believes that these changes are responsible for the increased fear of death, the rising number of emotional problems, and the greater need for understanding of and coping with the problems of death and dying. The author says, â€Å"The fact that the children are allowed to stay at home where a fatality has stricken and are in included in the talk, discussion, and fears give them the feeling that hey are not alone in the grief and give them the comfort of shared responsibility and shared mourning.† (Kubler-Ross 110) She believes that allowing the children to stay and be involved in the grieving stage prepares them gradually andShow MoreRelatedElisabeth Kubler Ross On The Fear Of Death870 Words   |  4 Pages Elisabeth Kubler-Ross in On the Fear of Death claims that through the year’s death is becoming a taboo topic. No one likes to talk about it and no one wants to ever be around it. Kubler-Ross attributes this to a deep and ancient fear of death. She argues that children today, in particular, have been sheltered from death to the point that they cannot deal or even process death. Although I agree with her point that children cannot deal with death, I cannot not accept the overall conclusion that itRead MoreThe Fear Of Death Written By Elisabeth Kubler Ross Essay1924 Words   |  8 Pages Death is defined as the termination of all biological functions that sustain a living organism. Phenomena which commonly bring about death include biological aging, predation, malnutrition, disease, suicide, homicide, starvation, dehydration, accidents and the list goes on. People look as death as being a good and bad thing it could be looked at from different perspectives. No matter what one views about death they can’t stop it from happening because it happens too every living thing, it is justRead MoreOn The Fear Of Death By Elizabeth Kubler Ross1346 Words   |  6 PagesThere is huge difference between Death and Dying. Death is the end of life, while dying is the process in which you death, also including the choices and actions involved in that process. In â€Å"On the Fear of Death,† by Elizabeth Kubler-Ross she describes the different aspects of dying, the final days of individuals who are terminally ill, the grieving process, and how children are treated during the time of death. The dissimilitude in â€Å"old-fashioned† death and â€Å"modern† final days are presented. SometimesRead MoreBehind The Formaldehyde Curtain And The Fear Of Dying By Elisabeth Kubler Ross869 Words   |  4 PagesNo one can escape death. It’s one of so few unavoidable certainties in our lives and has held an important position in every human culture since time immemorial. Of course, this position has is different from culture to culture, and shifts over time. This is particularly evident in western culture. The shift is discussed at length in two essays: â€Å"Behind the Formaldehyde Curtain† by Jessica Mitford, and ‘The Fear of Dying’ by Elisabeth Kà ¼bler-Ross. Both explore different aspects of these themes –Read MoreAnalysis Of The Article On The Fear Of Dying By Elisabeth Kubler Ross1323 Words   |  6 PagesLiving In Fear Of The End Modern medicine has been fighting death and whether that is good or bad remains unknown. In the essay â€Å"On The Fear Of Dying,† Elisabeth Kà ¼bler-Ross dissects modern medicines effects on living and examines the mental and emotional toll it has taken on people. In the essay she talks about how regardless of modern medicine’s benefits, has allowed us to become more wary of acknowledging death and accepting it. The author explains that despite the advantages of these new advancementsRead MoreBrain Death And Its Effects On Society840 Words   |  4 Pageson the grounds that the masses fear what they do not understand. It is inconceivable for someone to die and return to give a clear account of what transpires when there is a permanent ending of the vital process. Santrock writes, â€Å"Twenty-five years ago, determining whether someone was dead was simpler than it is today. The end of certain biological function – such as breathing and blood pressure, and the rigidity of the body (rigor mortis) – were clear signs of death.† (Santrock, p. 413) As timeRead MoreOn The Fear Of Death By Elizabeth Kubler Ross2070 Words   |  9 PagesOn the Fear of Death There is a huge difference between Death and Dying. Death is the end of life while dying is the process in which your death, also including the choices and actions involved in that process. In â€Å"On the Fear of Death,† by Elizabeth Kubler-Ross, she describes the different aspects of dying, the final days of individuals who are terminally ill, the grieving process, and how children are treated during the time of death. Kà ¼bler-Ross describes death and why society is apt to be afraidRead MoreOn the Fear of Death860 Words   |  4 PagesThe Fear Of Death The title On The Fear Of Death, caught my eye as I was skimming the text for a story. After some thought, I concluded that the word death means more to me than most of my peers. I grew up as the daughter of a hard working man, one with an uncommon occupation. My father is a mortician. On The Fear Of Death intrigued me because many adopt such a negative view of death. Kubler-Ross takes the concept of death and embraces it, perhaps allowing her to ease her own fear of mortalityRead MoreThe Psychological Problem Of Death And Dying1273 Words   |  6 Pagesdoctors, thinkers, writers, artists, all of humanity as a whole and each individual thinks and reflects on the problem of death, trying to resolve the issues associated with its mysteries. Plato, Aristotle, Epicurus, and Schopenhauer, Nietzsche, Kà ¼bler-Ross, Freud, Jung, Adler, devoted the works to studying of a problem of the death. The problem of the man’s relation to death continues being the source of fair in modern soc iety too, and people prefer not to speak about it. Therefore, in our worldRead MoreGrief And Grief By Mark Twain1410 Words   |  6 Pages Mark twain once said, â€Å"The fear of death follows from the fear of the fear of life. A man who lives fully is prepared to die.† ( K.Costolnic, K.Baldwin, J.Dutton, quotes on death,par.3, 2011) But, are we really prepared? Death is inevitable and with it comes the grief, which for some may be a great burden, Merriam-Webster defines grief as â€Å"deep and poignant distress caused by or as if by bereavement† (2012, par.1). Grief is a process that, while an incredibly unique process, is an inevitable stage

Logistics and Supply Chain Management Zara

Question: Discuss about theLogistics and Supply Chain Managementfor Zara. Answer: History of Zara As all we know that Zara is a most famous international brand of fashion. This fashion brand is owned by the Spanish fashion group and this company started its operation in the year of 1963. Amancio Ortea Gaona, founder of Zara, opened its first outlet in the year of 1975 at La Corua. Talking about the background, then there was a factory named as Inditex established by Amancio Ortega in 1963 and this factory turns into an outlet after 10 years and it was known as Zorba in Spain and the cost of this outlet was Euro 30 at that time. After a few years, Amancio Ortega changed his outlet name Zorba to Zara. However, by the year of 1990, Zara expanded its fashion business in the US, Europe, New York, France etc. Recently, Zara also starts operating from India in 2010.ZARA successfully opened its outlets around the world and ZARA has three product lines Mens wear, children wear and Womens wear. ZARA is successful because it easily located the market trends and performs quickly according th ese changes. ZARA is now considered as global brand as it has 1820 stores all over the world and as per the records the annual sales of ZARA is around 3.8 billion EURO (Wang, et al., 2013). When comes into picture the famous Founder Ortega, his strategies always reflect high performance and best quality. Throughout his whole career as Founder, he made the people working under him reach the highest standards of quality work and always supported the employees to give their best and keep working and keep improving their performance at every level. Critical Analysis of Zara The Secret behind the success of Zara involves the Information delivery system that focused on the customers. The latest trend that is introduced in the market and the process of designing is affected by consumers at ZARA. This system is associated with the interactive communication between store managers and the creative team at headquarters in Spain. Firstly the information regarding the customer tastes, needs and about their demands is gathered by the store managers and then, this information is shared by the store managers to the design team into headquarters and this system helps in fulfilling the clients needs as well as give ideas to create new designs and styles as per the client requirement (Schlossberg, 2015). Moreover, the analysis of industry environment is must. Industry Environment: The Fast Fashion Apparel Industry ZARA is commented as the Fast fashion brand of the Fashion industry innovation. ZARA adapt the current and upcoming trends as per the needs of customers and deliver designs in just a few weeks as compared to the other fashion brands. Threat of New Entrants: For ZARA there is no threat of new entrants. The reasons for this low threat are that the costs for Marketing, production, and distribution are already divided over units of production that lowers the cost of production. For new entrants it is not an easy task as it is very difficult for them to compete and achieve its aim as in the starting point, the huge amount of funds or investments are needed to enter into the industry (Kim, et al., 2015). Bargaining Power of Suppliers: There are lots of people in the fashion industries who supply the raw material in the fashion industry and the raw materials are adequate and can be offered to the many rising countries. Due to this reason the bargaining power of suppliers is low. Bargaining Power of Buyers: The bargaining power of buyers of ZARA is reasonable as ZARA customers switching costs are low and the products offered by ZARA are at affordable prices. In the fashion Industry, the customer is the only one that is very flexible in choosing the style across a number of brands. The High Brand Loyalty of ZARA also the low possibility of customer integration is the reasons of lowering the bargaining power of buyers (Mo, 2015). Threat of Substitute Products: In this competitive industry, there is always a high threat of substitute products. There are many substitutes or can say competitors of ZARA that are a threat to this fashion industry like MANGO, HM, and FOREVER21. This high availability of substitute or competitors leads to the huge threat for the fashion retailers. There are many chances of Customer switching because of the price comparison for the same product of a different brand. Rivalry among Competitors: In this fashion industry, there are a large number of competitors and Rivalry among competitors is intense. There are a large number of fashion retailers who adopted fast fashion model like HM, TOPSHP, MANGO, etc. All the listed companies are unable to take a decision of exit the industry at will. Fundamental Reasons of Success of ZARA Business Level Strategy Cost Leadership- This is the strategy that is adopted by ZARA in order to achieve low costs but maintain high fashion. Zara gets some idea from the latest couture designs and inform to the design team then makes similar design with a less expensive fabric. Moreover, ZARA always tries to produce less quantity of dresses to sell because it is an easiest way of cutting the cost or loss when that particular design is not popular, and it can also cut the stock cost as well (Fan Lopez, 2009). Corporate Level Strategy In this strategy the Company can choose to do a multiple business. The sales revenue of ZARA comes from the business of clothing and its nearly about the 95% of the sales revenue. No doubt, ZARA is also doing the business of home furnishing items under the brand name ZARA Home, the contribution of this is nearly 2.3% of the total revenue. International Strategies Transnational Strategy- The aim of Zara is to attain both global efficiency as well as the local responsiveness. By adopting the vertical integration, Zara has more litheness than its competitors in terms of moving products from the designing to stores. Also, ZARA responds to the local customer preference changes by taking a proper feedback from the client itself and then intimate this information to the design team at headquarters to introduce the new varieties on national and international level (Dutta, 2007). SWOT Analysis of Zara SWOT analysis is very important for every organization that before making any plan or strategies. Because one should know that what are the consequences and positive outcomes of the implementation of strategies (Lewis, et al., 2003). Strengths Use of efficient IT funds to help reduce costs Interactive communication between customer and design team Inspired, quick, and responsive design team Up-to-date designs at good-looking prices Weaknesses Resist outsourcing, which leads high labor costs Negligible advertising Limited production of clothing Opportunities Fast-growing demand from Asian fashion markets Outsourcing when essential to further cut losses Launch more advertising campaigns Threats Competition from HM and the Gap MANGO (Bennett, et al., 2009). Increase in labor costs Changes in consumer tastes and preferences Saturation of retailers (Mo, 2015). Competitive Advantage of ZARA- Concept of Sustainability An organization is an established mechanism and has an organizational structure for achieving its objectives and competitive advantages on other brands. Effective organizations have strategies to mark and maintain a viable and feasible market for their products and services. The Founder, Amaciano Ortega has adopted the following growth strategies (Fan Lopez, 2009). Integration strategy is must for achieving its goals and objectives which generally include profit maximization, Goodwill and brand image, etc to sustain in the market. There are various types and forms of Integration that help the ZARA to maintain its image and sustainability in the market. For ZARA, the dynamic process of adapting to market changes and uncertainty of the market environment, organizational reorganization and integration is an important tool in effectively maintaining and efficient alignment with the ever changing environment. These include vertical, horizontal backward and forward integration. These have been discussed in detail as under: Vertical Integration: This is a strategy which is used by ZARA to utilize in order to gain effectual control over the players which are vertically placed under them in the value chain of production and distribution. This is a significant and a conscious corporate decision. This strategy includes design, just in time production, sales and marketing of the fashionable clothes and accessories. Through this integration, the corporate firms decide whether to venture into the vertically placed activity or just to focus only on production. In order to reduce transaction costs and have a secured supplier and distribution channel, the firms gain control over their distributors through various measures to increase its power in the market. Horizontal Integration: This integration strategy of ZARA involves acquiring of similar businesses and activities which are essentially placed at the same level of the value chain thus it is called horizontal integration. It includes corporate strategies of acquisition, mergers and joint ventures. This is mainly done to consolidate with competitors in the market and to drive them out in order to gain market power and control. Backward integration: Backward integration is also a strategy which entails the buying of an entity which lies above the main firm in the vertical value chain. This is done to purchase suppliers and results in better efficiencies and improved costs. Forward Integration: This is also one of the types of vertical integration and includes the acquisition of a previous firm in the market thus acquiring its consumer base. It means when the activities are increased to include several others in order to gain control in the straight and undeviating control over distribution of one's products (Crofton Dopico, 2011). The above four points are considered by the Founder Ortega to filter the processing of the company. These are followed at every step to make the organization work better. Differentiation and Similarities between ZARA DELL Zara and the other brands are very different in nature. The Dell Company follows horizontal supply chain integration, whereas Zara follows a vertical chain of integration. The production line of both the companies is very different as the products offered by the companies are not the same. Dell has come up with distinctive approach to the production of computers or electric items is dependent on third parties like on suppliers for the final product and delivery of these products, whereas the Zara is not dependent on any third party for its clothes production. The success of the company is totally because of the control on every aspect of designing, production, and distribution. This control in all business activities also helps Zara to manufacture and deliver new designs in a short period of time and this is the only reason that Zara is more successful than the other companies. The horizontal supply chain management has an advantage that it is very easy to control as you have only mi nimum responsibilities on the part of the company. On the other hand, coordinating a number of small activities has the benefit of being able to control the whole picture of the company (Bhardwaj, et al., 2011). Zara also has a control on the suppliers too, as it adopted the vertical supply chain. Also the brands, Gap Inc and HM have also developed new channels of sale. The GAP and HM developed a system of offering products, whereas Zara which does not offer its products online. A fashion brand HMs also follows the expansion strategy that involves the development of business systems in each country entered whereas the Zara has already wider range of international presence in contrast to both Gap and HM, this is the reason that ZARA become a global company in a very less period. Differentiation and Similarities between ZARA and MYERS Basically, Myers is the departmental store that is offering the basic needful product to the people. Thus, the products offered by the both the brands ZARA and MYER are different. Zara has always focused on the demographic and psychographic conditions before starting any outlet, whereas the Myers do not focus on the demographic and psychographic factors because the products offered by the departmental store do not need to analyze the location, taste of the customers because it already focus on the products which are a necessity for any individual. The market of Myers is uncertain as the target market of Myers is also comprised with different categories of customers. On the other hand, the market of Zara involves a lot of creativity and innovative approaches and changing trends so it attracts the people aged between 20 to 35 years. The products offered by the Myers are large in numbers and it is very difficult to attract the customers as the customer services of Myers are not very app roachable. (Orcao Prez, 2014). Conclusion and Recommendations Effective and fruitful leadership roles have proved to be not only an origin ZARA effective competitive advantage, but it is also a very significant hampering aspect to entry. For example, as we all know that ZARA is among that only Fashion Brand with all the essential abilities to establish a good Brand image. It has also built in important switching costs through heavy and advanced technology. In the healthcare sector, through its RD abilities, it has made a strong and the qualitative leadership position in advanced health sciences. By analyzing the strengths and weaknesses and threats and opportunities, it is imperative to work on them and make the company more progressive. Certain objectives should be set beforehand to develop the product strategy and hit it in the market and while setting out the objectives, following should be kept in mind. Some of the objectives are as follows: - The objective to compete against your competition will require more efficiency and efficacy from your team members. The objective to achieve a specific date for launching the product and services will be influenced by demand for such products during the time when it is launched. The objective to respond to your customers' demands and expectations requires time for setting out research to make sure that the product is developed at the right time, for the right person and in the right conditions. References Bennett, H., Bennett, S. Joines, H., 2009. HM vs. Zara: Comparing Marketing Strategies, Available at: https://dianajoines.files.wordpress.com/2009/09/final-term-paper-hm-vs-zara-marketing-strategies.pdf Bhardwaj, V., Runyan, R. Eickman, M., 2011. A case study on the internationalization process of a born-global fashion retailer. The International Review of Retail, Distribution and Consumer Research, 08 July, 21(3), pp. 293-307. Crofton, S. Dopico, L., 2011. ZARA-Inditex and the growth of fast fashion, Available at: https://www.ebhsoc.org/journal/index.php/journal/article/viewFile/216/218 Dutta, D., 2007. Retail @ speed of fashion: Third Eyesight, Available at: https://thirdeyesight.in/articles/ImagesFashion_Zara_Part_I.pdf Fan, Y. Lopez, C., 2009. Internationalisation of the Spanish fashion brand Zara. Journal of Fashion Marketing and Management: An International Journal, 13(2), pp. 279 - 296, Available at: https://www.emeraldinsight.com/doi/abs/10.1108/13612020910957770 Kim, M., Truong, N. Ha, J., 2015. ZARA in Korea: The Myth of Success . Journal of Marketing Thought, February, 1(4), pp. 64-71. Lewis, K., Lewis, M. Machuca, J., 2003. Zara: The Inditex Story. An International Journal, Volume 2, pp. 1-6. Mo, Z., 2015. Internationalization Process of Fast Fashion Retailers: Evidence of HM and Zara. International Journal of Business and Management, 10(3). Mo, Z., 2015. Internationalization Process of Fast Fashion Retailers: Evidence of HM and Zara. International Journal of Business and Management, 10(3), pp. 1-20. Schlossberg, M., 2015. This Spanish retailer with the 'best business model' in apparel is scaring Gap, Abecrombie Fitch, and J. Crew, Available at: https://www.businessinsider.in/This-Spanish-retailer-with-the-best-business-model-in-apparel-is-scaring-Gap-Abecrombie-Fitch-and-J-Crew/articleshow/50251799.cms Wang, X., Tan, T., Kao, H. Tao, Y., 2013. Zara Synopsis: history, Available at: https://www.sfu.ca/~sheppard/478/syn/1123/Synopsis6.pdf

Accounting & Financial Management

Questions: 1.What is the monthly payment? 2.How much of the first payment is interest? 3.How much of the first payment is principal? 4. How much will Casino.com Corporation owe on this loan after making monthly payments for three years (the amount owed immediately after the thirty-sixth payment)? 5.Should this loan be refinanced after three years with a new seven-year 7 per cent loan, if the cost to refinance is $250,000? To make this decision, calculate the new loan payments and then the present value of the difference in the loan payments? 6.Demonstrated knowledge of the nature of a bank, financial risks and asymmetric information? Answers: 1. The monthly payment for the present loan will be as follows: Calculation of Monthly Payments:- Particulars Amount Loan Amount $20,000,000 Period (in years) 10 Interest Rate p.a. 8% Nos. of Payments p.a. 12 No. of total Monthly Payments 120 Effective Interest Rate 0.67% Amount of Monthly Payments $242,655.19 2. The interest of the first payment is computed below: Calculation of Interest Amount on First Payment:- Particulars Amount Loan Amount $20,000,000 Interest Rate p.a. 8% Nos. of Payments p.a. 12 Effective Interest Rate 0.67% Interest on First Payment $133,333 3. The principal of the first payment will be as per the following table: Calculation of Principal Amount on First Payment:- Particulars Amount Amount of Monthly Payments $242,655 Interest on First Payment $133,333 Principal on First Payment $109,322 4. The balance loan amount after paying the monthly installments for first 3 years will be $15,568,578, as per the following table: Period Opening Balance Interest Rate Interest Amount Monthly Payment Principal Amount Due Balance 1 $20,000,000 0.67% $133,333 $242,655 $109,322 $19,890,678 2 $19,890,678 0.67% $132,605 $242,655 $110,051 $19,780,627 3 $19,780,627 0.67% $131,871 $242,655 $110,784 $19,669,843 4 $19,669,843 0.67% $131,132 $242,655 $111,523 $19,558,320 5 $19,558,320 0.67% $130,389 $242,655 $112,266 $19,446,054 6 $19,446,054 0.67% $129,640 $242,655 $113,015 $19,333,039 7 $19,333,039 0.67% $128,887 $242,655 $113,768 $19,219,271 8 $19,219,271 0.67% $128,128 $242,655 $114,527 $19,104,744 9 $19,104,744 0.67% $127,365 $242,655 $115,290 $18,989,454 10 $18,989,454 0.67% $126,596 $242,655 $116,059 $18,873,395 11 $18,873,395 0.67% $125,823 $242,655 $116,833 $18,756,562 12 $18,756,562 0.67% $125,044 $242,655 $117,611 $18,638,951 13 $18,638,951 0.67% $124,260 $242,655 $118,396 $18,520,555 14 $18,520,555 0.67% $123,470 $242,655 $119,185 $18,401,371 15 $18,401,371 0.67% $122,676 $242,655 $119,979 $18,281,391 16 $18,281,391 0.67% $121,876 $242,655 $120,779 $18,160,612 17 $18,160,612 0.67% $121,071 $242,655 $121,584 $18,039,028 18 $18,039,028 0.67% $120,260 $242,655 $122,395 $17,916,633 19 $17,916,633 0.67% $119,444 $242,655 $123,211 $17,793,422 20 $17,793,422 0.67% $118,623 $242,655 $124,032 $17,669,389 21 $17,669,389 0.67% $117,796 $242,655 $124,859 $17,544,530 22 $17,544,530 0.67% $116,964 $242,655 $125,692 $17,418,838 23 $17,418,838 0.67% $116,126 $242,655 $126,530 $17,292,309 24 $17,292,309 0.67% $115,282 $242,655 $127,373 $17,164,936 25 $17,164,936 0.67% $114,433 $242,655 $128,222 $17,036,713 26 $17,036,713 0.67% $113,578 $242,655 $129,077 $16,907,636 27 $16,907,636 0.67% $112,718 $242,655 $129,938 $16,777,699 28 $16,777,699 0.67% $111,851 $242,655 $130,804 $16,646,895 29 $16,646,895 0.67% $110,979 $242,655 $131,676 $16,515,219 30 $16,515,219 0.67% $110,101 $242,655 $132,554 $16,382,665 31 $16,382,665 0.67% $109,218 $242,655 $133,437 $16,249,228 32 $16,249,228 0.67% $108,328 $242,655 $134,327 $16,114,901 33 $16,114,901 0.67% $107,433 $242,655 $135,223 $15,979,678 34 $15,979,678 0.67% $106,531 $242,655 $136,124 $15,843,554 35 $15,843,554 0.67% $105,624 $242,655 $137,031 $15,706,523 36 $15,706,523 0.67% $104,710 $242,655 $137,945 $15,568,578 5. If the company would refinance the loan with a new loan for seven years with 7% interest along with $250,000, as cost of finance, then the amount of new loan payments will be as follows: Calculation for Payment for New Loan:- Particulars Amount Amount of New Loan $15,568,578 Period (in years) 7 Interest Rate p.a. 7% Nos. of Payments p.a. 12 No. of total Monthly Payments 84 Effective Interest Rate 0.58% Payment for New Loan $25,376,689 The difference between the present values of two loan amounts is calculated below: Difference between two loan amounts:- Particulars Amount Amount of New Loan Payment $25,376,689 Interest Rate 7% Period (in years) 10 Present Value of New Loan Payment $12,900,222 Cost of Finance $250,000 Interest Rate 7% Period (in years) 3 Present Value of Refinancing Cost $204,074 Present Value of Total New Loan $13,104,296 Balance of the Old Loan $15,568,578 Interest Rate 8% Period (in years) 7 Future Value of Balance Loan after Ten Years $26,681,806 Total Period (in years) 10 Present Value of the Balance Loan $12,358,839 Difference between Old and New Loan $745,457 As per the above, the present value of new loan would be higher than the present value of old loan. It indicates that the company has to spent higher interest for the old loan in comparison to the new loan, though the new loan would cause to additional cost of finance. Therefore, it can be stated that the company should refinance the loan after three years to reduce the interest expenses. 6. Banks are regarded as the unique financial institutions due to the particular mix of features. This makes them vulnerable to run with negative externalities for the economy and has potentially systematic consequences. Financial regulations coms at the cost of regulatory failure. Large banks diversify by shifting form the traditional deposit taking and lending it to the market based activities and wholesale funding that is more cost effective (Beatty and Liao 2014). Banks operate in the condition of fractional liquidity reserve and the majority of the assets are more illiquid loans. Banks would face serious problems if all the depositors demanded their money at the same time. Banks have added a wide range of market based operations and large banks are engaged in the market-based activities. Capital held by large banks is less as compared to small banks as they have less stability funding than the small banks (Imf.org 2017). They are more organizationally complex as they have number of subsidiaries. The systematic risk of the large banks refers to the externalities of the banking distress onto the real economy or the financial system. Since they are more engaged in the market based activities as measured by the share of the loan in the total assets or the share of non-interest income in the total income. Large banks operates in such way because of the economies of the scale is benign. Size of banks is regarded as economically beneficial and the size of banks may be large as compared to what is regarded as socially optimal. Bank size is related with the private interest of the shareholders and the managers (Internationalcompetitionnetwork.org 2017).The tradeoff between the bank size and the economies of scale concerning negative externalities would contribute to the systematic risk of the banks. The regulations of banking emerge from the microeconomic concern of the bank over the ability of the creditors of the bank to monitor the risks originating from the lending side over the stability of the banking system. The banking regulation theory has undergone significant changes due to the compounding effects occurring in the financial sector. Regulations has also been evolving due to the ongoing banking crisis. Asymmetric information theory has profound effect on regulation view (Lse.ac.uk 2017). It has been argued by the majority of authors that there is an important asymmetry between the information available to the outside investors, depositors and banks. In extreme case of the information asymmetry, it is not possible for the depositor to distinguish between the insolvent and solvent banks. It might be possible that the banks operates at the size that is quite large from a perspective of social welfare. The optimal size of banks is uncertain due to the potential for economies of scale in large banks. Larger banks creates risk that is more systematic and are more risky than small banks. The individual bank risk is not influenced by the involvement of large banks in market-based activities. However, this give rise to the systematic risk. Regulation deals with the organizational complexity of the banks, which facilities the orderly resolution of the complex banks and reducing the complexity with the help of ex ante incentives. Taxing on the size of the large banks would seek to correct the large negative externality of the banks as the systematic risk for the large banks are too big. Some significant social costs are generated by the size of the banks and the negative externality forces the organization to take up such risks. Banks will be able to internalize the social costs with the help of tax imposed on the size of the banks. Larger the size of the banks, it is less likely for the government to allow it to fail and it is shielded from the potential loss. The size of the banking industry is not regarded as the biggest issue. It is viewed in light of the investment by the investor in the large banks. Since the government effectively guarantees the debts too big to fail and amount of deposits, the investment with large banks as the safer investment than made with the small banks. If the externalities are created by size and such externality can be limited by imposing tax. It can be done through the capital requirements that are considered progressive in relation to the size of the business. As long as the banks are allowed to remain big by the regulators, the political leverage of the banks will also continue to be big. The economic tab and the taxpayer created by them will also be regarded as big (Kaplan and Atkinson 2015). If the regulators break up the large banks, then this will put the financial institutions at the competitive disadvantage position. Safety of the global financial sector will not be improved with this strategy. The managers can boost the size of the banks by increasing the leverage of the banks and attracting the additional funding. The study conducted details the scope and optimal size of the large banks. It has been observed that large banks create more systematic risk on average than smaller banks. Risks of such banks are high when they have unstable funding; insufficient capital and they are organizationally complex and engage in more market-based activities (Saunders and Cornett 2014). It is suggested by the literature that the size of banks are driven by the empire building incentives and too big to fail subsidies. In addition to this, the size of the banks are large from the perspective of the social welfare. However, the optimal size of banks are highly uncertain and the regulations restricting the size of the banks may be imprecise and difficult to implement. The regulations of large banks should be optimal and it should combine the macro and micro prudential perspectives. This may involve the measures to reduce the involvement of the large banks in the organizational complexity and market base activities (Petty et al. 2015). Moreover, capital surcharges on large banks are also included. Reference: Beatty, A. and Liao, S., 2014. Financial accounting in the banking industry: A review of the empirical literature.Journal of Accounting and Economics,58(2), pp.339-383. Imf.org. (2017). 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