A project namely as Bisham came up by Virgin Media Inc Essay

A project namely as Bisham came up by Virgin Media Inc - Essay Example The paper tells that investment appraisal techniques basically work on the basis of incremental cash flows and not on the basis of net income. Incremental cash flows are the additional cash flows that a firm generates by investing in a particular project, thus the cash flows being generated from that project are added to the projected net income of the firm. However, in order to ensure whether a certain project is viable for the firm or not, the decision lies on the overall net cash flows pertaining to that project. The net cash flows of a particular project can be obtained by subtracting the net income of the company without accepting a project, from the net income of the firm with accepting a project. The basic formula for the incremental cash flows of a particular project is: Net cash flows of the project = Net Income of the company with the project - Net Income of the company without the project The reason behind using incremental cash flow approach in investment appraisal techniques is that it clearly states the actual cash outflows and inflows of a particular project. In case, when a firm has more than one projects and the firm has to decide which project needs to be opted, at that time this incremental approach assists the financial managers of the company, as the overall net income of the company might increase with every project, but the incremental cash flow approach clearly distinct between every project and their viability. As a result, the incremental approach is more useful in appraising different projects. ... These difficulties are as follows: Future projection of cash flows is subject to judgment of the financial analysts which vary with person to person. Inflation rate is subject to unpredictability as local economy as well as global economy may perform either way. The decision of operating cash flows are subject to pure judgment as nobody knows about the cost of direct material, future wage rates and above all the factory overheads estimates during the project life. The tax rate may change due to change in government’s policy. The working capital requirements are subject to pure judgments as to how to estimate them and the assumption regarding their reversal in the last year of the project. Net Cash Flows of Project Bisham under current conditions The following are the net cash flows of the project Bisham for 8 years project life. Yrs 0 1 2 3 4 5 6 7 8 NCF (1,400,000) 199,700 334,000 317,125 304,469 294,977 287,857 282,518 398,514 In the above table, year 0 indicates the year in which the initial investment is made in the project in the form of purchasing of two machineries naming as Machinery A and B for $1,200,000 and $200,000 respectively. The other figures included in the net cash flows from year 1 to year 8 are derived in such a manner that operating cash flows are computed first. Cost per unit of the product is first calculated by adding up per unit cost of each material, labor and factory overhead. Then these variable costs are deducted from the selling price per unit to obtain the contribution per unit. Contribution per unit for each year is then multiplied by the total number of units to be produced and sold each year to obtain

Critical thinking Essay Example | Topics and Well Written Essays - 1000 words

Critical thinking - Essay Example And this has come with so much military concerns. In other words, religion has been a fundamental part in the organization of nations' military policies and military campaigns. This paper seeks to argue that religion is a major cause of war. In order to undertake this discourse, it is important to identify the origins of organized religion. This will provide the basis for the identification of the important variables and undertake a comparison of the era before organized religion and the era after organized religion. In providing a background to what we will call organized-religion today, Wilson identifies that â€Å"Jesus did not call what he taught Christianity nor did Buddha call what he taught Buddhism† (2011 p62). This implies that what we call religion today evolved years after the founders of those groups died. In other words, these great teachers in history lived for a given philosophy and idea that was meant to improve the lives of people and get human beings closer t o the Creator. However, after these exemplary teachers died, people who came after them sought to spread their creed and spiritual beliefs. These individuals are the ones who can institutionalize religions and make it imperative for people to adopt those religions and live according to these fundamental ideals. With time, these â€Å"religionists† philosophize and put religion in a context that binds all people and all members of the community. This is because they feel that the teachings of the founders of the sect are universal and every human being must be forced to comply with those religious ideals in order. A further analysis of the emergence of religion indicates that the founders of these religions were mainly individuals with very modest visions and modest views. However, after they died, some people believed in the institutionalization of the religious views and in doing this, they got closer to people in authority and created a symbiotic relationship that made reli gion self-serving and a tool for the control of the masses and the wider sections of the society (Gooding, 2006, p45). As Karl Marx opines, religion is the opium of the people (Ott, 2007). In his writings, Marx challenged the status quo and he identified a lot of things about the abuse of religion, power and authority. In doing this, he provides a thesis that religion is used by the people in power and the people in authority to control the masses and get them to do what the leaders want. This observation of Marx can be identified in many societies ranging from the Far East to the Atlantic and down to the southern tip of Africa and the southern continents. Religion was used by people in authority to guide and to control the minds of people in society. In notable examples, religion was used to organize Empires. Caroll writes that Emperor Constantine unified Europe and kept the Roman Empire alive through the adoption of Christianity as a state religion (2012). It is worthy to note tha t Christianity was an outlawed religion that came with a death penalty in the Roman Empire before Constantine came to power. However, realizing that there were economic challenges ahead and there was pressure and rebellion from the â€Å"barbarian† tribes in northern Europe, Constantine decided to adopt Christianity to unify the masses and create a single code. Thus, through the Church, an organized religion was formed in Europe and this helped