Capital Budgeting Individual Project Assignment

Capital Budgeting Individual Project - Assignment Example Strategic planning is important to the future success of a business enterprise. Capital budgeting is one of the ways that can help a company achieve its long term success through proper planning. Lack of good road map that a strategic plan provides, may lead to misallocation of company resources through addressing short-term issues. This would in turn compromise the long term needs of the company. Necessary Information Sparklin Automotive Company (SAC) has been a successful company within the automotive manufacturing industry, operating since the last eight decades. The company has come up with an innovative idea to launch a new spark plug which offers an enhanced mileage to vehicles i.e. up to 100,000 miles. In order to initiate the new spark plug production, the company needs to set up a new manufacturing plant which would need to be analyzed financially in order to consider it viable for SAC. The entire setup would require information pertaining to the cash inflows and the cash ou tflows that would occur as a result of carrying out the production of the new spark plugs. The financial information that would be needed should only include the relevant costs that would only be attributed as a result of carrying out the new spark plug production. ... owing data would be used to evaluate the capital project: The new spark plug plant would need an initial investment of $1 billion in 2013, which would further be followed by another $500 million investment in 2014. The cash inflows that are expected as a result of this investment are: $300 million (2015), $350 million (2016), $385 million (2017), $400 million (2018), $450 million (2019), and $500 million (2020). All of these expected inflows are considered to be after-tax inflows. It is also expected that the new plant would not attract any Capital Gains; hence no tax savings would be gained. SAC’s current cost of capital is 10%. Capital budgeting The firm’s senior financial officers are faced with two important tasks in a firm. One of the tasks is to make decisions for improving the company’s return on equity. The other task is to find adequate funds for investment opportunities that may arise (Dayananda, 2002). Capital budgeting is the process in which a busine ss management determines whether projects such as long-term investment or building a new plant are worth undertaking. Basically, business should pursue all opportunities and projects that will increase shareholder’s value. However, because of limited nature of capital available for new projects, management needs to implement capital budgeting techniques to determine which will result to high return on a given period of time. Weighted Average Cost of Capital (WACC) Weighted Average Cost of Capital is the calculation of a firm’s cost of capital that involves proportionate weighting of each and every category of capital. When calculating the firm’s weighted average cost of capital, all capital stock such as preferred stock, common stock, bonds, and any other long-term debt are all included. The formula

Women Trafficking around the world Research Paper

Women Trafficking around the world - Research Paper Example This trend is expected to grow in the future with the fact that it is highly profitable, lowly investigated and few traffickers are usually prosecuted. In the Middle East, trafficking in women and girls is a prevalent crime where the victims are usually discriminated against by the prevailing cultures and customs. Some laws in the region do not even recognize human trafficking as a crime, which is why the crime continues to fester in the region (Murphy, 2001). Though victims of human trafficking are usually sold for reasons like slavery and forced labor, trafficking for sexual exploitation is still the biggest problem faced in the region. In most states in Arab regions, trafficking for sexual exploitation is not restricted. This is because some countries in the region have retrogressive laws that discriminate against women and favors the men. For example some countries allow temporary marriages, where the man decides when the marriage ends, which means that women and girls can be use d as sex slaves. Another supporting factor is that the women and girls who are caught up in the trafficking syndicates are usually prosecuted as illegal immigrants, which only serves to increase instances of human trafficking. ... The other economic factor that contributes to the women trafficking is the demand for cheap labor in destination countries. For example, Saudi Arabia demands for a lot of cheap labor, so women and children are trafficked from other countries and forced into slavery in this country. The other main cause of women and girls trafficking in the world is the increasing demand for sexual services. In the Middle East, women are usually discriminated against and can be exploited for sexual services Anti-Slavery International (2006). The traffickers understand that victims of human trafficking do not usually have any real rights in the countries of destination, so exploit this chance. Most of the women trafficked into these countries are transformed into sex slaves and commercial sex workers to earn a revenue for their masters. This increased sexual abuse of trafficked persons is recognized by the UN as a cause of increased demand for sexual services and should be addressed separately. The oth er reason why there is an increase in women trafficking is the fact that there are retrogressive laws in the destination countries. As already mentioned, some of the countries of destination of trafficked women and children do not recognize the rights of these women and children. Government lack of control and the lack of laws that prohibit women trafficking serve to increase its instances. For example, lack of legislation that expressly prosecutes human traffickers means that it is going to continue. In many countries, human traffickers are not sufficiently investigated or prosecuted. Domestic violence and organized crime are two other reasons that usually