The payback method has been criticized by financial experts and academicians as unsophisticated and theoretically incorrect because it ignores the time value of money, ignores cash flows beyond the payback period, and is inconsistent with the owner’s goal of maximizing wealth. In small and large firms, where the payback method...
The accounting rate of return (ARR) appraisal method is also known as the return on investment (ROI) or return on assets (ROA) method. It is calculated by dividing a project’s average accounting profits by its average investment. The average profits figure is found by adding up the profits for each...
One of the first chapters that an economics student will have to learn is probably the theory of demand and supply. Considering all the theories of economics that have evolved over the years, this theory of demand and supply must is one of the most fundamental. Like all other commodities...
It is of great importance to note that, the factors that contribute to the changes of demand either interplay in a way or are independent. In this case, the sharp rise in prices of houses in certain areas of Melbourne can be attributed to the low rate of supply of...
A customs union is a type of intergovernmental agreement involving a particular region composed of a free trade area. Within the region, the countries involved eliminate or reduce the tariff and non-tariff barriers. The involved countries establish a common external trade policy. The main purpose of establishing a custom union...
Different countries in the world have different currencies that are used in the exchange of goods and services. The value of goods and services in a country depends on the currency used. However, economists have come up with a measure that attaches the same value to a commodity irrespective of...
Prior to the global economic recess, the Japanese yen was affected by several factors that accelerated the effect of the economic meltdown on its economy. This basically was caused by the tragic fall in external demand for Japanese products. The fall in demand is estimated to have gone down to...
Trade balances with partner countries. First, it is necessary to give the general numbers of the foreign trade of the USA. The allover situation is represented on the following chart. (chart below) Originally, this is the chart of the total external debt of the USA. As McConnell and Brue state:...
Over the past couple of decades, the discussion surrounding the legitimacy of global governance has led to a divide between international relations theorists in regards to the standards of well-being and development established by inter-governmental organizations like the United Nations or the European Union. In my opinion, such measures of...
Cars are becoming more fuel-efficient and therefore get more miles to the gallon. As soon as people get access to fuel-efficient cars, they need less need for gasoline. Drivers would want to use an opportunity to save their money for gasoline and start paying attention to the offered cars. As...
The Earned Income Tax Credit, or the EITC, is the subsidy to the working-class families provided by the government. Although it is possible to use them for education or another long-term spending, the people receiving them are often forced to use them immediately for overdue payments, for example. Since the...
Shipler begins with enticing examples of what it means to be poor in America – not only to not have access to resources but to be presented with these unattainable things on a daily basis. He points out that poverty is difficult to define but that it is easier to...
Difference Between Debt and Equity Funding Options Equity funding involves retailing a share of a company’s equity in exchange for capital. For instance, the owner of XYZ Company might decide to give up 15% of the company’s ownership and sell it to an investor to raise capital for its expansion....
The idea of traveling and writing a food blog is an exciting choice due to the wide range of benefits that activities in this industry have. Gig work allows realizing one’s potential to the desired extent and does not require responsibility to employers since opportunities for self-employment today are wide....
When creating an efficient math curriculum for the students, teachers are to make sure that they use the most out of both school and home environments. The latter should concern consistent communication with parents on the matter of their child’s involvement in learning processes. In order to secure such communication,...
I believe that the introduction of a 20 % sales tax on marijuana will lead to a drop in sales, which is lower than 20%. In other words, I believe that demand for marijuana is inelastic, as the coefficient of change in demand will be between 0 and -1. When...
Direct and Indirect Exporting The problem of choosing a strategy for entering international markets has been given much attention over the past 50 years. The shape of entering strategy can be based on such criteria as strategic goals, speed, required level of investment, and risks of entering the foreign market....
Difficult economic times call for challenging decisions that can affect retailer business in a country. For instance, during an economic recession with increased unemployment rates, central banks may boost the economy by inducing an expansionary money policy to expand the money supply, raise loans, and reduction in interest rates. However,...
Fiscal policy is an economic framework used by federal governments to control their spending and taxation, thus influencing the economy. By the government acting to adjust the spending and tax revenue, it can impact the economic results by either lowering or raising the economic activity. For instance, when a federal...
Investment spending has a tendency to fall and rise on numerous occasions, thus said to be unstable due to several reasons. Consumption is complementary to saving or investing; hence if a household does not consume, it invests. However, it is easier to forgo investment than consumption which at most times...
When calculating GDP using the expenditure approach, components such as consumption, investment, government expenditure, and net exports are used. Consumption is all private consumer costs in a country’s economy, which include durable goods with a life expectancy of more than 3 years, non-durable goods, and services. Investment is the amount...
COVID-19 put the world in severe circumstances concerning healthcare and the economy. It adversely affects the livelihood and wellbeing of people all around the world. More than 3 million individuals have died due to coronavirus infection since the pandemic’s beginning. Many people lost their jobs because of staff cuts, while...
The establishment of minimum wage is a common practice in many countries as governments try to address the needs of the most vulnerable groups. At that, this type of regulation can do more harm than good to people in many cases. First, workers receive a specific amount of funds sufficient...
Neoclassical economic theories have become a dominating framework, which has had an effect on the approaches used by the government of different countries. Based on the premises of this theoretical paradigm, the market reaches equilibrium when the needs of sellers and buyers are balanced. This condition is seen as the...
There are several factors influencing demand and supply equilibrium, among them being the commodity price. First, some consumers are likely to buy a commodity because it is cheap, while others buy it because it is high, suggesting they are looking for prestige. Secondly, consumer income influences demand and supply equilibrium...
A recession reducing a consumer’s income by 10% will have a more significant effect on the consumers will and ability to purchase music compact discs over cabinet maker’s work. Since income determines the amount of disposable income available to a consumer, the choice of cabinet marker’s work over music compact...
The modern world is rapidly changing, and numerous factors influence it. One of them is globalization, which is an extremely complex issue. It is essential to note that it leads to both positive and negative outcomes. The process affects every country to different extents, and its consequences can be observed...
A terrorist attack on the U.S. would weaken its economy. A weaker economy comes because of the reduced valuation of stocks, as the country would be in a crisis. Moreover, capital flows in the country would be affected since investors would expect less investment. In addition, investors would expect less...
The idea of the exchange rate administration or regime can be described as the system employed by a country’s government so as to manage its currency in the perspective of other key world’s currencies. The Foreign Exchange Market (FOREX) is pretty significant in this situation as well. The history of...
Introduction An essential component of the structure of the commodity market is the services market. Service is a particular consumer good, which is expressed in a practical effect that satisfies the needs of a person or society. The peculiarity of the service as a commodity is that it is valuable...
Banks in the U.S. play a significant role in economic development. Banks lend to businesses, contributing to the production growth and lending to the population, increasing consumption in the population. However, some situations can influence the global economy and banks, respectively. For instance, the Great Depression, the most widescale crisis...
Introduction COVID-19 pandemic has strongly affected firms’ real investment (long-term capital) as attitudes, abilities, and behaviors of customers, employers, and employees change accordingly. The outbreak of Coronavirus disease is gradually influencing what and how customers purchase while quickening structural transformations in the consumer goods and services sectors. Even after the...
GDP, or gross domestic product, is a common measure applied to evaluate a country’s economic performance. It is the aggregate market worth of all the goods and services created in a country in a particular time interval. GDP is usually measured annually and can be calculated in several ways. One...
Firms must think not only about the revenues but also the costs incurred during business operations. Costs are essential to every corporation’s budget because if the finances are spent inefficiently, the firm will go bankrupt. To make effective business decisions, the company’s head must understand the entrepreneurial activity’s costs. To...
The current stage of economic development is characterized by deep integration of globalization processes, as a result of which foreign relations between countries are strengthened. One of the consequences of this strengthening is the formation of the currency market because, as we know, almost every state maintains its sovereignty by...
A company’s branding creates an emotional connection with the consumers and can connect people emotionally, making them loyal to its product. Businesses must sustain loyalty to their products to maintain and improve their marketability. A customer’s commitment to certain products occurs as a result of confidence. Trust is also critical...
Challenges to Social Cohesion Environmental health is a significant concern for public housing, especially in challenging conditions. Everything, from sanitation to safety, influences well-being and creates barriers to social cohesion in a community. Any sort of public or transitional housing is usually affected by a lack of care for the...
Abstract This paper is related to observing the effects that the economy of the United States of America has had on transportation and logistics management during the last two years. The paper focuses on the modern trends of the economy of the United States of America, considers international trends that...
A sharp rise in the rate of cryptocurrencies led to natural consequences – the rush demand for graphic processing units (GPUs) that can be used for mining resulted in their shortage. Moreover, high-performance GPUs have completely disappeared from the open market, severely damaging different industries such as gaming and designing...
Executive Summary For one and half year, the global economy has been experiencing an exceptional crisis for long term. Starting from the housing market of the USA as a crisis, it almost immediately spread out as a financial crisis of huge proportions in the mortgage market and by collapsing, the...
Executive summary China’s rapid economic growth China has an exceptional position the today’s world’s economy. There are several reasons for what makes the Chinese economy unique. These are the rapid growth rate, the characteristics of the Chinese economy and how china’s economic reforms resulted in increased productivity despite government control....
Introduction In the current global finance market, the issue credit risk management has become very important as banks try to ensure that they are not dangerously exposed to bad debts that may affect their sustainability. The 2008 global financial crisis and the credit crunch which followed created pressure among international...
Introduction The World Economic Forum identifies Nigeria as one of the big five economies in Africa. The country has a gross domestic product (GDP) of $448.10 billion in 2019 (African Development Bank, 2020, p. 6). Nigeria’s growth has materialized into an economic powerhouse despite its challenging political environment. It is...
There are a number of expectations placed on China both from within its borders and from the world at large. Having established itself as an industrial economy in the early 1980’s, china has become an important source of goods for both its domestic and foreign markets. As a result china...
Introduction PPP or the Purchasing Power Parity is a theory that is used to determine whether the exchange rates between currencies are equal when the purchasing power is equivalent in each of the two countries compared. Basically, it depicts the clarification between the fairness of how exchange rates are calculated...
Introduction The modern theories about capital structure have gained momentum since the groundbreaking 1958 article written by Modigliani and Miller (hereafter, MM). Before the issue of the article, there was only a vague knowledge of the real consequences of debts and equity problems for the capital structure without any analytical...
The four main types of the market structure include perfect competition, monopolistic competition, oligopoly, and monopoly. There are different economic structures that an economy can adopt, but the four main structures are the perfect competition, monopoly, oligopoly, and monopolistic competition. These structures of economies exist in the real world, except...
Introduction Price elasticity of demand means the extent to which the demand of the commodity would change if it price is altered. The relationship between the price elasticity of demand and slope of demand curve is an inverse one i.e. the greater the gradient of the curve, the lower the...
Introduction The economic dependence on oil-derived fuels has made global economies vulnerable to economic variability. This commodity has intrinsic price dynamism and hence the reliance on it as a major economic sustainer has proved to be a major macroeconomic challenge (Mina 384). The demand and supply of oil have historically...
The concept “time value of money” is based on the principle that an amount of funds costs more at the current moment than it may cost in the future because money can be invested and bring profit (Lane, 2017). This concept lays the foundation for the economic appraisal of investment...
Introduction The purpose of this report is to conduct ratio analysis to evaluate the performances of Abu Dhabi Commercial Bank (UAE), Commercial Bank of Dubai, Emirates NBD (UAE), First Gulf Bank (UAE), and Union National Bank over a period of eight years (from 2008 to 2015) with regard to the...
Oil exporting countries often rely solely on oil revenues, which is especially common in the Persian Gulf countries. Fluctuations in oil prices depend on many factors, both institutional within the country itself and on the policy and volumes of other exporters’ oil production. For countries which rely solely on oil...
Introduction Credit rating agencies refer to companies which assign credit ratings for issuers of debts and the debt instruments. They can also provide credit ratings to the servicers of the underlying debt. The issuers of securities include companies, state and local governments, special purpose entities as well as governments which...
Introduction Purpose of the paper This paper will provide a critical analysis of the financial and operational performance of Wal-Mart Stores, specifically for the three fiscal years 2011, 2012 and 2013. In addition, the company’s financial and operational performance will be viewed in comparison with another corporation- the US-based Target...
In the contemporary world, foreign direct investments (FDI) play a critical role in increasing the productivity levels of a host nation by enabling it to meet its domestic demand as well as the global demand for the goods and services that it is producing. Thus, FDI can be used as...
Meaning of the term hedging Hedging is mitigation against risk exposure by taking a position in one market to offset risk exposure expected in another market. Hedging protects the hedger from future fluctuations in prices or exchange rate consequently an investor is guaranteed expected future profits. The hedger can be...
Asquith and Mullins carried out a study to survey the impact of initiating a dividend payment on shareholder wealth. Their main objective was to understand further the impact of dividends on shareholder wealth. The survey made use of a sample of 168 firms. The dividend has been either the first...
Introduction The banking sector throughout the world has experienced a lot of crises. This is attributed to poor banking practices, inadequate revenue diversification and capital, credit risks and currency mismatches among others (Tektas & Ozkan-Gunay, 2006). These shortcomings prompted the introduction of liberalization and reforms in the banking sector in...
Introduction Financial statements are meant to provide the financial information of an entity as clearly and precisely as possible. They are records that clearly outline the financial activities of a business firm. Financial statements usually include a statement of comprehensive income, statement of financial position, statement of changes in equity,...
Payback period Payback period is the duration of time a project takes to recoup initial investment. The decision criterion is to accept a project with a shorter payback period. Table 1.0 Ranks of projects using payback period. Rank Project Period 1 Project B 2 years 4 months 2 Project A...
Introduction The core business objective of ordinary commercial banks is to make a profit. Banks lend money at interest rates, and at the same time, they encourage customers to deposit funds at an agreed rate. The deposits are ways through which banks access legitimate funds to lend at higher interest...
Introduction The European crisis is the financial crisis that affected, and is still affecting, countries within the Eurozone. The predicament is majorly attributed to the countries’ inability to repay their debts free of assistance that comes from third parties. Various intervention measures including European financial stability facility, European fiscal compact,...
Introduction Stock Exchange is an aspect of the market that provides a medium through which stocks, bonds and securities are exchanged (Gurusamy, 2009). The main players in the stock exchange are stock brokers and traders. Stock exchange also facilitates the issuance and redemption of financial instruments and securities. In addition,...
Introduction The five forces proposed by Porter are very essential in the understanding of a firm’s competitive position within an industry. The tools are simple but powerful in analyzing the business competitive situation (Cheverton 2004, p.113). Porter’s five force tools are not only used in determining the current competitive position...
Definition of the Basel accords The Basel accord is a set of regulatory agreements that were set by the Basel committee with the intention of regulating the banks. This happened after it was noticed that banks and other financial institutions were facing unforeseeable risks hence strategies to absorb the impact...
Introduction Financial reporting is a process of communicating financial information for public or private institution, government and non-profit organizations (Alexander & Britton 2004). Interest groups require financial information when making investment decisions. From the financial information, interest groups compare financial performance of different companies. Therefore, it is importance that standard...
Basel II The banking industry involves a risky business. To survive in the industry, the banks have to develop effective ways of taking and managing risks. The contemporary changes in banking and other financial markets have led to the complexity of the risks involved in banking. For instance, when a...
Stock valuation has been a vital factor when determining investment decisions in the economy. Most of the companies have their stock traded publicly, and General Motor Company is no exception. GM Company was founded in Michigan in the early 20th century. General Motors Company (GM) is concerned with designing, manufacturing,...
Daimler AG Description of the Company Daimler AG is a German transnational company that deals with the manufacturing of motor vehicles. The headquarters of the company are in Stuttgart, Germany. The firm ranks as the third-largest automobile manufacturer in the world. Apart from manufacturing motor vehicles, the firm also offers...
Introduction Real estate is defined as the type of an assets class that is tangible in nature. This class covers a variety of assets such as buildings that include residential property, office buildings, retail as well as industrial buildings. The real estates also covers land that can be used for...
The United States along with United Kingdom’s ruling authorities had to formulate various regulations to bring the arising global financial crisis under control. The Federal Reserve of the United States just like the other central banks within the globe had to implement regulations aimed at expanding the money supplies to...
Introduction It is worth noting that the company’s financial statements released at the end of each financial year are very important to build strong and sound relationships with the various stakeholders who are involved in the organization’s businesses. Financial ratios are tools used by different stakeholders within the company to...
Introduction Financial reporting is one of the most important accounting practices that profit and non-profit making organizations should integrate into their operation. Public organizations are under a legal obligation to disclose their performance to the public. One of the ways through which they attain this is by publishing their financial...
Introduction The State of Investment Policy intends to explore constraints, purpose as well as policies of Brandes mutual funds.Brandes mutual fund is based in Canada. Its major objective remains to make adequate returns for its clients. It is also focused towards attaining global excellence. In addition, the Statement Investment Policy...
Introduction Islamic banking has grown steadily in the recent past. Past studies have noted that they have moved into other regions like Europe and the wider Asian region. For instance, Juan Solé observes that the Islamic banking system has expanded not only in countries with most Muslims, but also in...
Introduction Capital Asset Pricing Model (CAPM) in finance is normally used to establish a hypothetically suitable return of a security, if that security can be included to a well-diversified portfolio, provided that security is of non-diversifiable risk. CAPM takes into consideration security’s sensitivity to systematic risk or market risk, frequently...
Investment Philosophy and Market View Investment philosophy Investment philosophy can be defined as those strategies or principles that guide an investor in his investment decisions such as value, technical, growth and the fundamentals (Shleifer 2000). In this case, the portfolio is strictly focused on small carefully selected assets, after carrying...
Introduction This paper contains a comparison of the actively managed funds and the index funds. To begin with, the actively managed fund is the liquidity pool which has a portfolio that is used as a platform of a trade by investors to meet their long-term objectives in an investment. On...
The worldwide financial meltdown is among the various types of financial crises, which are known to have serious long-term implications on the global economy. Various financial economists have tried to raise theories regarding the issue as well as trying to offer possible solutions on how to prevent such situations. The...
Introduction Taxation can be described as the way by which governments finance their spending by imposing charges on individuals and companies. Most nations use taxation to encourage and discourage economic decisions (Smith, 2006). For instance, taxation on personal income in terms of the amount paid as interest on mortgage leads...
Introduction The fear of the Euro plunging into dilution had gripped the financial world completely. The developed economies in Europe Union (EU) failed to raise money for their bonds due to a decline in the confidence of the international financial market on euro zone. EU’s debt crisis worsened further since...
Strong economies are emerging all over the world, but both China and India are still ahead because they are taking international markets by storm. Their rapid growth has pushed them into global markets and possibilities of development in their own regions. Nevertheless, these possibilities are rapidly turning into real development...
Introduction The aim of every organization is to maximize profit while minimizing costs. The operations of an organization in a given business environment aims at ensuring that the organization achieves its objectives. Financial performance of an organization is important for investors. However, it is not the only measure of the...
Introduction Government policy has contributed to the growth of the insurance policy in Saudi Arabia. This has mostly been through the creation of favorable conditions for the development of insurance firms and their ability to thrive. The paper has successfully looked at laws that were established in order to increase...
Introduction Foreign Direct Investment (FDI) is defined as a process where residents from another country acquire ownership of assets of a firm in a foreign country with the purpose of controlling production, distribution among other purposes (Moosa 2002 p.1). The IMF defines FDI as ‘ an investment that is made...
Introduction American companies seeking to get loans from banks to expand their businesses are unable to access them due to the reluctance of banks to lend. This is because the banks have not yet fully recovered from the losses they incurred from the sub-prime mortgage crisis. The industrial and commercial...
Inflation is one of the many economic heats that confront the world. Economic experts have always congregated to look for solutions by developing strategies to deal with inflation. Its adverse effects have made the issue to be the most understood aspect of the global economy by the learned and those...
Introduction The European financial crisis arose out of fiscal measures adopted in several European countries. The international community got concerned in late 2009 and at the beginning of 2010. The European countries had accumulated high amounts of sovereign debt. In Ireland, the debt had increased due to bank bailouts. There...
Improved international relations, technological development, growth in international trade, and development of reliable communication channels have led to rise in globalization. Globalization is the process through which regional economies integrate into a global network of trade; with globalization, multinationals and private companies are able to take advantage of enlarged global...
Introduction More and more economies have developed the tendency to rely on private capital flows to sustain themselves and therefore have also become more prone to risks that come with the volatility associated with such capital flows (Baumol 2007). Researches have been carried out to help establish a comprehensive framework...
Introduction There is a large volume of studies on the correlation between oil prices and macroeconomics variables. Most of these studies have discussed the important effects of oil prices fluctuations on economic activities in the emerging and developed countries. One important factor of using oil price changes as a cause...
The last several decades could be characterized by the dramatic changes in the structure of society and market. These alterations are conditioned by the blistering development of technologies and approaches used to attain success and become beneficial. Furthermore, the changes in the structure of market conditioned the growth of its...
The risk and return associated with any type of investment bear several similarities. The more the “appetite” for high returns, the higher the level of risk a business entity has to accept. In other words, risks and returns are directly proportional to each other when it comes to investment (Greenwood...
Introduction Written by Khanna, Palepu, and Sinha (2005), the article ‘Strategies that Fit Emerging Markets’ is an informative piece that acknowledges the biggest challenge, namely globalization, which major businesses face today. Top-level management of large multinational corporations reveals how globalization has made it almost impossible to apply traditional strategies that...
Abstract This research will investigate factors that determine the capital financing structure of firms within a tax-exempt economy, Kuwait. It will question why companies in a tax-exempt economy, regardless of the lack of debt incentives, continue to prefer debt financing to internal sources of capital. The research attempts to fill...
Before the oil crisis in 1974, private and public pension plans were considered in terms of total social security benefit package. The economic troubles arising from the crisis triggered renewed thinking resulting into integration of the two systems. Overall private pensions plans was not a widely practiced tradition and the...
Dens Coffee shop is set to become a central part of the lives of coffee addicts in Tower Hamlets, London. It will offer the perfect environment for people to meet or just waste the day away as they sip a cup of coffee. The coffee shop will have 1200 square...
Introduction Commercial Bank of Dubai disclosed its financial results with reports of positive prospects. The bank had registered a one percent increment in its net profit as compared to the previous year with AED 0.40 earnings per share. Its return on average equity and return on average assets were reported...
Advantages of Speculation Speculators play an important role in financial markets, because they give the markets the extra buoyancy needed to carry out trades. They are also important in the financial markets because “they provide information about the fundamental values of investments” (Duffie). Speculators will only buy when the conditions...
I humbly forward my request for a loan of $50,000, which I will use to purchase ABC, a Japanese restaurant. I will secure the loan using my equity of $200,000. I will be comfortable to pay the loan in 5 years’ time covering both interest and principle. Currently I am...