Article Review 2 Case Study Example | Topics and Well Written Essays - 1500 words

Article Review 2 - Case Study Example 19% of children had severe autism, 36% were moderately autistic and 43% showed symptoms of autism. 67% of children were 12 years or younger. 80% of the children were male. Questionnaires were used to get the Peruvian parents’ stress profiles which were translated in Spanish for easy understanding. The t-test was used for analyzing data. Research findings: `Research revealed that parents for children with autism were more stressed than those for children with no disabilities. The parents for autistic children with cognitive impairment and life span care were highly stressed. Security and safety were the main reasons for children as they could not be left alone and required constant looking after. Moreover, there was huge concern for their future welfare when parents would be no more. Taking the income group as independent variable, it was also found that financial aspect was not very relevant for parents from middle and high income group. But it was a critical factor for parent s belonging to low income group. They were considerably more worried because they could not afford care services for their children with autism. The children required specialized medical care and skill which was not easily accessible due to financial constraints. Stated implications by investigator(s): The study has important implications as it focuses on difficulties and anxieties faced by parents, caregivers and family. The plethora of problems like decreased efficacy, increased stress and other health related issues have negative impact on the autistic child and may even reduce or even nullify positive interventions. The major implications of the study revealed that stress had adverse impact on the overall development of children with autism. It significantly changed the behavior of the parents towards their autistic children which increased the potential for negative development outcome as against those parents’ behavior who were less stressed out. This was important beca use behavioral shortcomings of parents may also be reflected in the behavior of autistic child who could become more agitated and violent, thus endangering his/her own safety along with that of others. Bringing up of autistic children is onerous experience for parents, families and caregivers. It was also deduced that if the specialized services are accessible either free or at reduced cost to low income group parents of autistic children, they have better chance of gaining employment and meeting their needs as well as the needs of their children, especially autistic children. Full day care services will allow parents with more opportunities for employment and give them time for completing household and other important chores which was hitherto used in caring for their autistic children. This would reduce their stress level and help them to focus on the needs of their children with autism. Moreover, with local care centers, travel time would be significantly reduced thereby ensuring better care for autistic children. The self efficacy of parents therefore, emerges as key issue for improving and improvising the care services for autistic children. The cognitive and adaptive limitations of the autistic children were crucial issue for parents, family and caregivers as they significantly limit their ability for independent living. The fact they require some

The Silk Road Essay Example | Topics and Well Written Essays - 500 words

The Silk Road - Essay Example Traveling and exchange of goods were at a limited and minimal level until the establishment of the Silk Roads. Silk Road is the collective term used to point the interconnected routes for transportation of goods across China and Mediterranean (Liu, 2010). The seemingly safe route established from the halted military conflicts among regions attracted merchants from different parts of the world (Liu, 2010). This focus in trade and market roads have enabled the city of Changan to receive the arrival of distinct merchandise – â€Å"Roman glass ware, India cotton textiles, spices, fragrances, gemstones, and woolen textiles of various origins† (Liu, 2010). Premium goods are those rarely found. Silk is common in China but were considered to be infrequent to nomads of the West (Liu, 2010). This is primarily the origin how the term Silk Road is coined. In addition to its perceived high value, silk is one of the items that drove trade because it is light and beauteous (Christian, 2000). Things which are exotic created a demand for them; hence, the trade was dominated by precious stones, spices and silver (Whitfield, 2004). These products were associated with glamour and thus, are deemed precious (Whitfield, 2004). Gems, stones and other jewelries conveyed luxury and very well became symbols of one’s societal status (Whitfield, 2004). Possession of such expensive items became a definition of a person’s capability and societal influence. It is men’s nature to strive to be different. Allocation of foreign goods was one of the measures for people to display grandiose peculiarity. Amidst global diversity, there still is a common ground with which every culture can be identified (Haskoz, Iyer and Seshadri, 2012). McNeill emphasized the significance of contact and communication among civilizations. He also gave focus that aside from material goods, diseases and immunity to some of it are passed onto different cultures

Foreign Exchange Risk Exposure on Toyota Motors

Foreign Exchange Risk Exposure on Toyota Motors The globalization phenomenon allows companies to internationally expand their sales and production activities. A consequence of this phenomenon, however, is the existence of foreign exchange rate exposure which can impact the companys profitability, net cash flow and market values. In the past years, several academic researches have been developed in order to explain and analyze how foreign exchange risk exposure fluctuations affect a multinational company or a purely domestic company value, and how this risk is influenced by the companys risk management strategy. Consequently, this dissertation aims to find some knowledge on these subjects for a specific company, Toyota Motor Corporation. By applying the capital market approach and analyzing three different periods, it is possible to conclude that Toyota Motor Corporation, in a crisis situation, was able to protect itself against some of the primary exchange rates fluctuations it is exposed to. Thus, the predictability of higher fluctuations allows the company to apply effective risk management strategies. Considering a ten year period, bilateral exchange rate fluctuations are more significant to the company stock returns than for other periods. However, being an exporting company, its coefficient for exposure is not consistent with the competitive advantage an exporter holds when its company home currency depreciates. It is consistent, however, when the broad currency index is considered. Additionally, the impact of foreign exchange risk fluctuations is small for company stock returns. This can thus indicate that exchange rate fluctuations dont have a significant impact on company stock price returns. INTRODUCTION The globalization phenomenon has allowed the integration of national economies into the international economy, giving them easier access to information, goods and services through trade and foreign direct investment around the world. This process has been encouraging an increasing number of companies to start operating on a global scale, expanding their networks worldwide. In recent years, the number of multinational companies has grown in order to respond to the competitiveness experienced in the domestic market and explore new markets to produce or sell new products and services. Multinational companies, or purely domestic companies with a broad network, are exposed to several risks. An important risk that has a significant impact on the management of a company is the foreign exchange risk, due to the fact that it may affect the companys cash flows, value and performance. Nevertheless, besides the foreign exchange risk, many other risks affect companies, such as the interest rate r isk. Several financial and operating instruments and techniques are being used and developed by multinational companies to handle these risks. However, in order to manage these risks, companies must know exactly what their risks are and how to measure them. With regard to foreign exchange rate exposure, several studies conducted in recent years have presented various risk management approaches in order to understand to what extent its fluctuations affect the companys value and performance. However, there is little consensus among the different studies, which indicates that exchange rates are complex and can affect and be affected by different factors. The most traditional approaches are the cash flow approach and the capital market approach. In this study, the capital market approach is used to assess, through quantitative methods, to what extent foreign exchange rate fluctuations affect the companys value. It is important to note that several studies using quantitative methods found no statistical significance when trying to understand the impacts of foreign exchange fluctuations on the companys value. Thus, an explanation given for this fact was that the company was able to protect itself against foreign exchange rate fluctuations by means of hedging instruments and techniques. The main purpose of this study is to analyze the foreign exchange risk exposure of a multinational company using the capital market approach, and also to what extent the various assumptions underlying this approach produce different results. The choice of the multinational company was based on the following requirements: it had to be a public company operating in a competitive industry and could not be the subject of any other study in the same area. Accordingly, the Toyota Motor Corporation was chosen. Its main plants are located in Japan; it operates in the Automotive Industry and was the worlds largest manufacturer in 2009. Furthermore, 61.4% of total sales to external costumers are overseas, which indicates that the company is likely to face considerable impacts from foreign exchange risk exposure. In order to achieve the main purpose of this study, Toyotas foreign operations are analyzed in a first phase to understand to what extent the company is internationalized. Moreover, this initial analysis also envisages the foreign exchange rate fluctuations against the companys stock price returns and their direct impact on its report accounts, as well as the hedging instruments used to handle the foreign exchange risk. In a second phase, the capital market approach is used to suggest that foreign exchange risk exposure could be measured as the sensitivity of stock price returns to exchange rate movements. This approach requires the implementation of statistical regressions. For this purpose, market, stock price and foreign exchange rate data were collected from 1999 to 2009. Considering the studies developed by different authors, regressions involve several hypotheses for the exchange rate variables, such as a Nominal Broad Index that is like a basket of currencies and several bilateral exchange rates, in order to understand which variables affect stock price returns. In this second phase, the quantitative method is applied to three different periods in order to compare how the company handles the foreign exchange risk. As this dissertation takes into account the investors point of view, it can help to understand how investors determine and quantify the exposure of their portfolio to the foreign ex change risk. Moreover, this approach allows comparing the companys exposure to foreign exchange rate fluctuations with that of competitors in order to understand the effectiveness of the hedging activities. To complement this study, this dissertation is organized under the following sections: The first section is a thorough review of the literature on this subject. It explains why it is important that companies know how to handle the foreign exchange risk and presents the findings of past research. In the second section, the traditional categories of foreign exchange risk exposure are described, the effects of hedging the foreign exchange risks are shown and the most used analysis methods are discussed. The third section provides an overview of Toyota and an analysis of its foreign operations. The main purpose of this section is to support the interpretations that emerge from the regression results and this information is used as the basis for selecting the variables for the regression model. In the fourth section, relevant analyses are provided about the variables that may be a source of risk for Toyota and which were chosen for the regression model. In addition to this, it presents the hedging programs undertaken, the designated and undesignated financial instruments used and the reasons why the company does not need to have financial instruments to hedge translation and economic exposure. The fifth section describes the methodology used. The reasoning, as well as the issues of each variable included in the model, is expressed in this section. It also presents the study time periods and data sources. In addition to this, it provides an analysis of the descriptive statistics for the data and different periods used in the model. The sixth section contains the regression results and provides an analysis and explanation of the findings. It also presents the limitations of the software used for the regressions and a brief analysis of the foreign exchange risk exposure of Honda and Nissan Motor Corporation. The seventh and last section summarizes the main conclusions of this study and presents some suggestions for further research. LITERATURE REVIEW The goal of creating a global business has, in the past years, been the fundamental reason behind the growth of multinational companies. Such an example is the registered growth in Japanese companies exports. In 2000 and 2009, exports from Japanese companies amounted to 0.8%  [1]  and 10.8%1 of the GDP, respectively. An annual growth of 32.9% in foreign activity, for a nine year period, is one of many advantages that companies can obtain by opening themselves in many ways. Other advantages include the opportunity to diversify labor force, to enter new markets and sell more, to reduce transport costs and to benefit from economies of scale. This, however, also creates new problems, challenges and demands. A multinational company is either a company with operating subsidiaries, branches or affiliates in more than one country, or a purely domestic company engaged in international activities (imports and exports). Some of the new problems and challenges these companies face include an increased exposure to foreign risks, such as exchange rates, interest rates and commodity prices [Miller, 1998]. Moreover, the risks associated to exchange rates appear do to the contact with new currencies  [2]  . Exchange rates constitute one of the most important macroeconomic risks, which can potentially impact, positively or negatively, the companies profitability, cash-flows and market value, due to exchange rate fluctuations. Consequently, in order to handle exchange risk exposure, companies can adopt several hedging tools. In the past decades, thanks to the increasing number of international trade activities and multinational enterprises, as well as the large currency fluctuations registered, the volume of research that tries to measure and analyze the impact of exchange rate fluctuations in multinational companies and their vulnerability to it has grown. However, produced results/conclusions have a mixed nature due to the complexity of this subject. The main goal in this section is to understand, through previous researches, what types of companies are most affected by exchange risk exposure, the importance of hedging, several types of foreign exchange risk exposure, types of hedging activities depending on the foreign exchange risk exposure the company is facing and traditional approaches to measure exchange risk exposure. Exchange Risk Exposure of Multinational Companies vs. Domestic Companies Thanks to the phenomenon of globalization, as well as the increase in companies foreign activities, several researches have been developed in order to give some input on what type of companies show a higher exchange risk exposure: multinational or domestic companies. The results of previous empirical studies suggest that only certain industries and/or companies are exposed to foreign exchange risk  [5]  . In the other hand, even a purely domestic company with importing or exporting activities is impacted by fluctuations in exchange rates. This idea is connected with competitive advantage; for instance, the products an exporting company sells abroad can still affect the companys value due to the effect of exchange rate fluctuations in competitors, suppliers and in customers demands. Muller and Verschoor (2006) concluded in their study that a companys size is also an indicator of its foreign exposure. They found that a companys lower dividend payout ratio results in a stronger short-term liquidity position and, consequently, a smaller hedging motivation and a higher exchange risk exposure. Other authors however, such as Choi and Jiang (2009), defend that multinationality is important for a companys exchange exposure, but not in the popular notion that was mentioned. Some authors found evidences that foreign exchange risk exposure is actually higher and more significant in absolute magnitude for domestic companies, when compared to multinational companies. The existing explanation for this finding is the fact that multinational enterprises are more capable to effectively and easily use financial hedging and operational hedging in order to reduce their position against foreign exchange risk, and also to increase their stock returns. Additionally, these companies are more aware of foreign exchange risks. Dominguez and Tesar (2006) agree with this finding and they also found that small companies, rather than large and medium-sized companies, show a higher exposure due to the same reasons. As a result, companies that dont engage directly in international business but compet e against foreign companies can be affected by exchange rate fluctuations [Dominguez, Tesar, 2006]. Dominguez and Tesar (2006) also found that the industry level may influence exposure. They suggest that exposure increases in highly competitive industries. In more competitive industries, however, an almost perfect pass-through can be expected since they are more aware of their vulnerability and are consequently better motivated to hedge foreign exchange risks, when compared with less competitive industries  [6]  . Regarding purely domestic companies, Pritamani, Some and Singal (2005) found that importing companies are more affected by fluctuations in exchange rates than exporting companies. Therefore, companies with importing activities should have more reasons to hedge exchange risk exposure. The Importance of Hedging Exchange Risk Exposure Hedging means taking a position when acquiring a cash-flow, an asset or a contract in order to protect the owner from losses and to eliminate any gain in the position hedged. Several researches indicate that currency risk management is very important to manage earnings and unexpected losses. Consequently, this should be done in order to reduce any impacts on the stockholders equity and to prevent value declines for the equity holder due to cash flow changes and unfavorable exchange rate fluctuations, respectively. Hedging currency exposure can therefore reduce some of the expected fluctuations in future cash flows and increase their predictability [Smith and Stulz, 1985]. It is believed that foreign exchange rate fluctuations impact financial decision-making in production, marketing, planning and strategy [Moffett and Karlsen, 1994]. It is therefore necessary to make contingent investments or develop long-term strategic plans and management perspectives in order to understand the volatility of foreign exchange. Companies can implement hedging tools based on policies that define when and how to hedge against foreign exchange risks. Hedging tools are not static mechanisms, companies are able to dynamically adjust their behavior in response to foreign exchange risks; for instance, a company can decide to hedge only part of their foreign transactions. To undertake these policies, the company needs to determine its risk tolerance and needs to understand the direction that the currency to which it is exposed is likely to take. A value maximization corporation that hedges its exposure to exchange risks can reduce the costs connected to financial distresses and taxes, as well as agency problems existing between shareholders and bondholders [Martin and Mauer, 2005]  [7]  . A possible reduction of financial distress costs allows investors to require lower risk premiums. Consequently, the company value increases [Smith and Stulz, 1985]. Therefore, as mentioned by Smith and Stulz (1985), hedging is part of the overall corporate financing policy. Moreover, Dumas and Solnik (1995) concluded that part of the return rate of an assets price is influenced by the foreign exchange risk premium. Thus, when a company implements risk management activities that decrease its foreign exchange risk exposure, the cost of capital is reduced. Some authors sustain that exposure management may not reduce total risk. Copeland and Joshi (1996) argued that anticipating hedging strategies is difficult given that so many other economic factors change when foreign exchange rates fluctuate. This is confirmed by Moffett and Karlsen (1994), who argue that the uncertain nature of future cash-flows hinders the implementation of long-term strategic plans and better investment decisions. It is also argued that risks connected to an inefficient hedging activity can increase exposure [Hagelin and Pramborg, 2004]. Additionally, currency risk management usually consumes some of the companys resources, consequently lowering its expected cash-flow [Eitman, Stonehil and Moffett, 2010]. Therefore, companies need to know whether their hedging strategies are successful or not, and if they are relevant to shareholders [Hagelin and Pramborg, 2004]. Findings regarding the Vulnerability of Multinational Companies to Foreign Exchange Risk Exposure Hedging tools that handle exposure to foreign exchange risks are not simple and they dont hold only a few complexities, since the companys exchange risk exposure correlates with its size, multinational status, foreign sales, international assets and competitiveness and trade at the industry [Dominguez, Tesar, 2006]. Adler and Dumas (1984) suggested that a companys foreign exchange risk exposure can be measured by the stock prices sensitivity to unexpected foreign exchange rate fluctuations. On the other hand, it could also be measured as the companys cash flows sensitivity to foreign exchange rate fluctuations. Considering that the main goal of this dissertation is to analyze economic exposure, it is important to note that several authors have developed researches that try to measure and analyze unexpected impacts of exchange rate fluctuations on companies performances, portfolios and Industries. Nevertheless, these researches have produced mixed empirical results. Jorion (1990) found that only 15 of 287 US multinational companies were statistically significant concerning the impacts of exchange rate fluctuations in companies stock returns. Additionally, the author detected that higher company foreign operations reflected higher exposure to exchange risks. Nevertheless, Bartov and Bodnar (1994) found that 208 of the companies with foreign operations that composed their sample were not statistically significant to the effect of US exchange rate fluctuations on companies stock price returns. Additionally, other researchers have reached mixed conclusions using different methodologies, samples and alternatives for the main variables. The inconsistency in these results, therefore, doesnt allow a sustainable conclusion on this subject. Recent studies, however, found evidences that exchange rate fluctuations do have an impact in companies performances. Such an example is the research developed by Dominguez and Teaser (2006), who found exposure to be statistically significant due to the effect of exchange rate movements on stock returns at Industry and country level. Some explanations have been pointed out by several authors for these mixed results. The registered contradiction can be explained by limitations concerning data, variables and methodologies used. Different researches develop different alternatives in order to determine foreign exchange risk factors and company values, which include different samples, the use of companies with less opened economies (USA) or more opened economies and different periods; all of these affect research. Bartram (2008) also explains that the use of stock returns to measure company value reflects the hedging position of companies, and the analysis is thus considering a lower level of risk exposure. Crabb (2002) also suggests that these mixed results can reflect different financial hedging strategies on data or simply reflect noisy data. Additionally, Bartram and Bodnar (2007) found that operational hedging activities help companies reduce their exposure and, consequently, have no statistical significance over the impact of foreign exchange rate fluctuations on companies returns. Therefore, as suggested by Crabb (2002), a statistically non significant exposure to exchange rates can result from an efficient hedging strategy set in place by the company. Types of Foreign Exchange Risk Exposure The hedging decision depends essentially on the level of risk exposure, its magnitude and the magnitude of hedging that companies deem necessary. Companies should essentially hedge activities that put them in a position with a high level of uncertainty, i.e., risk exposure in the strategy field (competitive, input supply, market demand and technological risk) and fields of interest to finance and international business scholars (foreign exchange risk), [Miller, 1998]. Before initiating the hedging process, the company has to decide what exchange risk exposure to hedge and how. There are three traditional foreign exchange rate exposure categories  [8]  that impact companies and that have a specific managing method: the transaction exposure, the operating exposure and the translation exposure. Generally, these exchange risk exposures can be hedged through the use of derivatives and financial instruments, such as commodities, futures and forward contracts, options and swaps [Miller, 1998]. The main goal of this dissertation is to measure and to analyze how unexpected foreign exchange rate fluctuations affect a multinational company. Notwithstanding it is also important to understand how the other two types of exposure impact companies and the types of hedging mechanisms available to handle exposure, in order to reach a deeper analysis and optimal conclusions. Economic Exposure Economic exposure, also known as operating exposure, is an unexpected change in exchange rates that affects the present value of the company by changing future operating cash flows, arising from inter-company and intra-company activities [Eitman, Stonehil and Moffett, 2010]. The unexpected exchange rate fluctuations affect the expected future operating cash-flows changing the volume, price and/or costs of future sales [Moffett and Karlsen, 1994]. Economic exposure approaches the impact of long-term currency exposure and analyzes the health of a companys business in the long run. The changes registered in the expected future cash flows depend of the change in the position the company holds in international competition  [10]  . Managing economic exposure involves all aspects of a company. Before establishing hedging policies, a company needs to measure its economic exposure. In order to do that a company should invest some resources in assessing its exposure, i.e., identifying the set of environmental contingencies affecting and relevant to the creation of shareholder value [Miller, 1998]. This identification allows the assessment of alternative environmental scenarios and consequent adoption of improved strategic decisions by the company. This is the reason why identifying and measuring economic exposure can be complex and difficult, bearing in mind that environmental contingencies vary across industries and across companies within those industries. Moreover, some authors mention economic exposure as being subjective, since it is based in estimates of future cash flows. Hedging Strategies The main goal of economic exposure management is to anticipate and influence unexpected and unpredictable effects in exchange rates. This can be accomplished if a company diversifies and changes its international operating and/or financing policies. This diversity allows the company to react in an active or passive way. The company can diversify operations through sales, location of production facilities and raw material sources or inputs [Eitman, Stonehil and Moffett, 2010]. A company can expand its sales through subsidiaries distributed across different countries, bringing its products or services to new markets and taking advantage of economies of scale, being also capable of diversifying its exposure to foreign exchange risks. Flexible management policies allowing a faster sourcing of raw materials and components can easily mitigate this exposure if this adaptation considers the impact of exchange rate fluctuations in the company costs and revenues. Additionally, RD can also mitigate this exposure, allowing the cutting back of costs and enhancing productivity as well as product differentiation. Choi (1989)  [11]  pointed out that international investment is one of the major instruments in managing economic exposure. In the same line, Miller and Reuer (1998) developed a study that showed this exposure is considerably reduced with a higher and direct foreign investment by the company (foreign market entry mode). Additionally, Smith and Stulz (1985) found that mergers achieve results that are similar to hedging results. Consequently, a company may wish to diversify the location of its production facilities internationally in order to mitigate the effect of exchange rate movements. This mitigation is possible because the company measures its cash flows in different currencies. Thus, exchange rate fluctuations in all currencies the company is exposed to can be naturally offset as can, consequently, the gains or losses while the company still reacts competitively. Diversification in financing is achieved by raising funds in more than one capital market and in more than one currency  [12]  . This method allows the company to reduce future cash-flow variability, to increase capital availability and to reduce costs, as well several risks, such as political risks. Allayannis et. al. (2001) observed that companies with geographical dispersion are more likely to use financial hedging strategies to lower their foreign exchange risk exposure. Accordingly, the use of exclusively operational hedging does not increase the companys value. However, if companies combine operational and financial hedging they will improve their value and, consequently, reduce exposure to foreign exchange risks. Companies can also adopt proactive policies (including operating and financing policies) to offset anticipated foreign exchange risk exposures. These policies allow a partial management of this exposure. The most generally employed are  [13]  : matching currency cash flows, risk-sharing agreements, back-to-back loans, currency swaps, leads and lags and reinvoicing centers. [Eitman, Stonehil and Moffett (2010)]. Transaction Exposure Transaction exposure measures gains or losses resulting from unexpected changes in future cash flows already contracted in a currency-denominated transaction [Martin and Mauer, 2005]. The uncertainty stems from the impact of exchange rate changes on the consolidated financial reports [Friberg and Ganslandt, 2007] and the fact that it is not anticipated in any line item of a financial statement [Eitman, Stonehil and Moffett, 2010]. Thus, the uncertainty can be the specific quantity of foreign currency or the timing of cash-flow [Moffet and Karlsen, 1994]. Transaction exposure approaches foreign exchange risk exposure in the short-term. It is therefore easier to identify and to measure, allowing a greater effectiveness of hedging strategies to be expected. Hedging Strategies The exposure to foreign exchange transactions can be hedged by contractual, natural, operating and financial hedges. The company, however, needs to determine its own risk tolerance and its expectations concerning the direction the exchange rates will assume. Contractual techniques include hedges in forward  [17]  , policies that imply proportional hedging. A natural hedge is basically an unhedged position where the transaction is left uncovered. Crabb (2004) suggests that this is not a very good hedge because it doesnt control variation over time and, consequently, companies cannot perfectly hedge their exchange rate exposure. An operating hedge means that the company will simply create an off-setting operating cash-flow (account payables, for instance). This hedge can also be implemented through several techniques, such as invoice currency, leads and lags in payment terms and exposure netting [Eun and Resnick, 2004]. Hedging through invoice currency allows the company to shift its foreign exchange risk exposure, invoicing foreign sales in home currency, or share foreign exchange risk exposure  [18]  , pro-rating the invoice currency between foreign and home currencies. Additionally, a company can also diversify its exposure to foreign exchange risks by invoicing sales in a market basket index [Eun and Resnick, 2004]. By hedging with leads and lags companies can accelerate or decelerate the timing of payments (receipts) made (received) in foreign currencies. This hedging strategy is efficient if a currency is expected to appreciate or depreciate against another [Eun and Resnick, 2004]. Finally, the technique of exposure netting suggests that a multinational company should not consider its deals in isolation, focusing rather on hedging the company in a portfolio of currency positions. This means that companies should consider overall payments (receipts) that must be done (received) after taking in account the opposite operations that naturally hedge each other. To use this technique some companies have re-invoicing centers, separate corporate subsidiaries that serve the parent or related unit in one location and all foreign subsidiaries. The reinvoicing center receives the invoice between the subsidiaries, taking legal title of the good that manufacturing plants sells to distribution subsidiaries of the same company, managing all foreign exchange transaction exposure for intracompany sales [Eun and Resnick, 2004]. Additionally, the reinvoicing centers can guarantee the exchange rate for future orders  and also manage intra-subsidiary cash flows [Eitman, Stone hil and Moffett (2010)]. Financial hedging refers to the creation of an off-setting financial cash flow by either borrowing or lending in the currency the company is exposed to. The company can use some type of proactive policies such as back-to-back loans and currency swaps. A back-to-back loan occurs when two companies in different countries coordinate themselves to borrow each others currency for a specific period of time. They then return the borrowed currencies at an agreed terminal date. By hedging via currency swap, the company and a swap dealer agree to exchange an equivalent amount in two different currencies (for instance, a company enters a swap paying yens and receiving dollars) for a specified period of time. The swap dealer assumes the role of a middleman. A matching currency cash flow proactive policy can act like a financial hedge or an operational hedge. The first alternative to offset a long-anticipated and continuous exposure to a particular currency (i.e., the Japanese Yen) is to acquire debt in that currency (in Yens). Suppose the following exposure: A US Corporation exports goods to a Japanese corporation. The inflow of the Japanese Yen creates a foreign currency exposure. An hedging technique requires that the debt payments in Japanese Yens, which consist of the principal and the interests paid by the US Corporation

Ayn Rand, Aristotle, and Selfishness :: essays research papers

Ayn Rand, Aristotle, and Selfishness Selfishness is an act that humans innately have implanted within them. Ayn Rand being a rational egoist had many moral beliefs, one being especially about selfishness. She believed that: â€Å"Self-interest, properly understood, is the standard of morality and selflessness is the deepest immorality.†( Ayn Rand 279) This basically emphasizes that you should see oneself, as an end to oneself. A person’s own life and happiness are their highest values, and that they don’t exist as servants or slaves to the interests of others. In the same way, others as well don’t exist as servants or slaves to a person’s own interests. Each person's own life and happiness is his/her crucial end. Ayn Rand, Aristotle, and Frederick Nietzsche all had theories behind this, which was that Humans are innately selfish. Threw out society today all humans are selfish and it is proven by these philosophers that it is naturally developed and there is no cure to prevent it. Ayn Rand, a great Russian philosopher, once questioned why shouldn’t one be selfish. Ayn Rand responded to that question with her theory which she called objectivist ethics. This theory states that humans are innately selfish. â€Å"Everyone does what they really want to do otherwise, they wouldn’t do it†.(Ayn rand 66) Rand believed that humans are rational beings and maintained the idea that rational people will help others if they get something in return. This idea is a voluntary co-operation, which applies to dealings with trade and justice. It also applies to human relationships. In developing her theory she criticized the ethics of altruism, which says that people should act out of selfish concern for others. Ayn Rand says in her book called â€Å"The Virtue of Selfishness† that the proper method of judging when one should help another person is by reference to one’s own rational self-interest and one’s own hierarchy of values. Ayn Rand followed Aristotle’s point of view. However unlike Aristotle she focused on an individual other than a community. â€Å"There is no such thing as ‘society’ †¦ only individual men† (Ayn Rand 279) Ayn Rand followed her great acknowledged teacher Aristotle. She changed her view slightly different from Aristotle which was to focus on an individual rather than focusing on a whole community. Aristotle believed that one’s own life is the only life one has to live for. Aristotle also stated that the â€Å"good† is what is objectively good for a particular man.

Home by Toni Morrison Essay

Over time, Frank’s journey to rescue his debilitated sister, the siblings’ dependence on each other becomes more evident. Frank and Cee Money, the protagonists of Toni Morrison’s Home, exemplify this powerful need, a need that at times flirts with greed. The reason Frank feels so responsible for Cee is due to the fact while growing up they had neglectful parents as well as an abusive grandmother, his failed relationship with Lily, and lastly him facing his inner turmoil due to his actions in Korea. Toni Morrison states numerous times in the text, how Frank would do anything for Cee. Frank recalls, â€Å"Only my sister in trouble could force me to even think about going in that direction† (Morrison, 84). His parents certainly did not inculcate this instinct into Frank, for they have neglected their two children, leaving them with the witch of a Grandmother, Lenore. The relationship between Frank and Cee, which exceeds romance, sanctions Frank while handicap ping Cee. Due to the unfortunate circumstance of having careless parents and cruel grandparents, at a young age Frank is occupied with the unspoken role of Cee’s Guardian. â€Å"Their parents were so beat by the time they came home from work, any affection they showed was like a razor—sharp, short, and thin† (53). To grab hold of the relationship, Morrison, uses the first person point of view with Frank Money, and the third person perspective from Cee, along with other characters. Frank, as the acting guardian of Cee, the responsibility he has taken on is a significant and perhaps be one of the more important and well-developed themes of the novel. Frank, through the first person point of view describes how he was â€Å"guarding her, finding a way through tall grass and out of that place, not being afraid of anything† (104). Frank gladly took ownership for Cee, and was heroic in the process which he loathed about in his own mind. Frank needs to take possession of hi s sister for his own wishes. He experienced rough times in Korea and it was his way of burying the past and paving a new road for his future. This is the sole reason for Frank’s journey south back to Lotus, Georgia; he is frantic to rescue Cee after she was in dreadful hands. Cee went through much more hardship while Frank was away due to the lack of experience she was accustomed to. Once more, Frank wanted to be the defender he had been as a child; to revivify the feeling in his heart of fearlessness. Frank needs something to protect. Cee, his dearly loved sister, take up this role for most of the novel. Concurrently, Frank satisfies his troubled need to care for someone and loves his sister. Willingly, Frank admits, â€Å"I’ve had only two regular women. I liked the small breakable thing inside each one. Wherever their personality, smarts, or looks, something soft lay in each†¦A little V†¦that I could break with a forefinger if I wanted to. But never did† (67-68), Frank expresses his obsession with weakness. Frank denotes this weakness as a small child to whom he is the parent. He handles it cautiously, cares for it, and provides a home for it. He needs it to feel needed, which happens to be a reoccurring theme throughout the novel. â€Å"When†¦I caught my reflection in a store window, I thought it was somebody else. Some dirty pitiful-looking guy†¦Right then, I decided to clean up† (69). In this moment, Frank’s search of his relationship with Lily begins from a forceful self-hatred that has presented itself since his deployment to Korea. After his relationship with Lily fades and crumbles, Frank returns to the seed that from the beginning he was in need of, his sister. After all, his journey was certainly always, to his sister, who needs him far more than Lily ever did. â€Å"She was the first person I ever took responsibility for. Down deep inside her lived my secret picture of myself—a strong good me†¦In my little boy heart, I felt heroic†¦Ã¢â‚¬  (104). Without Cee, Frank is nobody. Without Cee, Frank has no purpose. As Frank and Cee rummaged through their uneasy childhood, they consistently found each other as a safe, comfort zone. The burial that occurs in his first memory of the novel, Frank recalls, â€Å"I hugged her shoulders tight and tried to pull her trembling into my own bones because, as a brother four years older, I thought I could handle it† (4). Immediately, as readers, we are aware of Frank’s self-imposed responsibility for Cee. The instinct was natural. Nature tends to prevail over nurture, as is certainly the case with Frank Money. Persistently his sister’s shield, to put it in a nutshell, for example, by his actions against the man who flashed her, Frank exaggerates Cee’s dependence on him. â€Å"†¦ [Cee] was prevented from any real flirtation because of her big brother, Frank. The boys around knew she was off limits because of her overbearing, over protective brother. That’s why when Frank†¦enlisted and left town, she fell for†¦the first thing she saw wearing belted trousers instead of overalls† (47). Regardless of Frank’s good intentions, he really put Cee at a disadvantage and at risk. Their childhood was a clear indicator that Cee’s role as the helpless damsel in distress and in need of protection, and Frank’s role as her dedicated protector. Frank and Cee, over the course of the novel, show many unclear indicators about the relationship between the siblings. Toni Morrison has a job well done with portraying the characters as more reliant on each other than lovers, but one could simply mistake the relationship between them. Frank, shaped by his inclination to protect, seeks to redeem himself for his unspeakable actions in Korea; he â€Å"[decides] to clean up† (69). Cee cleanses him. She grounds him, without even knowing it. He shuns away from his violent tendencies, he came across during his w ar experience in Korea. At the start, he believes he needs â€Å"the rage that had accompanied killing Korea†¦to claim his sister† (102). Before retrieving Cee, however, his mindset evolves. â€Å"He couldn’t let things get so out of control that it would endanger Cee† (110). Given his failure to show Cee the evils of the world, Frank’s attempt to protect her as an adult is a difficult assignment. He could not save her from everything. He was late upon re-entering her life and missed her greedy husband, not the twisted doctor. Cee’s infertility symbolizes her permanent scarring, credited, in part, to her own brother. Frank, although a loving, kind brother, failed to teach Cee to be a woman. Now, she will never be. It is inevitable that no person can go through life without hardship.

Postal Service Case Analysis

Postal Service Case Analysis The United States Postal Service receives no tax dollars from the federal government for their operations. They are a self-supporting agency, using the revenue from the sales of postage and postage-related products to pay expenses. Each year the postal service delivers 212 billion pieces of mail to over 144 million homes, businesses and Post Office boxes in virtually every state, city and town in the country, including Puerto Rico, Guam, the American Virgin Islands and American Samoa. Delivering this much mail, requires managing almost 800,000 employees and contractors, 38,000 facilities and 214,000 vehicles. Managing 214,000 vehicles to deliver an abundance of mail, it is no wonder that accidents happen but many can be avoided. According to www. usps. com, in 2005, the Postal Service incurred $49 million for traffic accidents and in 2006 reported 100,000 motor vehicle accidents. How can the United States Postal Service reduce the annual number of motor vehicle accidents thus saving money? The three options to address the issue of reducing the amount of motor vehicle accidents per year are as illustrated below. One option is to offer an accident-free incentive plan to drivers. Regardless of fault, if a driver remains accident-free during the course of a year, they will receive a bonus. The bonus amount will fluxuate each year depending on the dollar amount saved on accident reductions that year. So for example, if the Postal Service saves $10 million in 2007, the bonus amount would be a certain percentage of the $10 million. Another option is to offer annual driver training. Each year, drivers would have to attend a drivers training in-service in order to continue driving a motor vehicle for the Postal Service. The in-service would be a hands-on training session where the drivers would need to pass a road course. Lastly, the Postal Service can execute a more stringent driving record policy. Upon hire, the candidate would need to provide a certified driving record as a condition of employment. On an ongoing basis, the Postal Service would run annual driving record checks. If any new traffic violations appear, depending on the severity of the violation, the employee would be transferred to a position that does not require driving or their employment would be separated. The time it would take to implement the accident-free incentive option would be 6-12 months. The policy would need to be developed and approved, then an effective date would need to be determined, it could be the first of the year or the beginning of the fiscal year for the Postal Service. The cost and ease of implementation would be fairly straightforward, just the cost and resources utilized to develop the policy. The annual bonus payout wouldn’t be determined until the savings from the year is figured out. Once the savings is figured out, the bonus would be a percentage of that amount and of course, each year that amount would vary. Having an incentive for drivers to take the time and think about their actions while driving, could result in a high return on investment for the Postal Service. If traffic accidents decrease even the slightest bit, the cost savings could be hundreds of thousands of dollars. The time and cost to implement the annual drivers training option would be more lengthy and expensive. The Postal Service would need to locate a facility in each state to hold the driver training and hire qualified trainers. Providing more intensive driver training could also result in decreased traffic accidents for the Postal Service. The problem with this option is not only is it costly, employees may not take the training seriously. There have been many trainings that I have attended where employees tend to goof-off and not take it as seriously as they should. The last option regarding implementing driving record checks would be relatively inexpensive. Upon hire, the candidate would absorb the initial cost of obtaining their driving record but going forward on annual basis, the Postal Service would be responsible for the cost. A driving record costs around $10. 00 and with an estimated 214,000 drivers, the annual cost would be around $2,140,000. This option seems costly; however, if the traffic accidents decrease as a result of the checks, the amount of money saved would more than the Postal Service pays for the driving record checks. To conclude, the option I think would be best is the accident-free driver’s incentive plan. When a company offers an incentive to earn more money, employees seem to respond. Not only will employees take this option seriously, the Postal Service would see a dramatic decrease in traffic accidents. By putting the onus on employees and providing them a bonus opportunity they are more likely to make better decisions when driving. Source: www. usps. com OptionsCriteria 1Criteria 2Criteria 3Criteria 4 Time to implementCostEase of ImplementationReturn on Investment Accident-free incentive plan6-12 monthsVaries depending on cost savings on accidentsRelatively easy-policy development and researchPotentially high-money talks to employees Annual Driver TrainingMore lengthyExpensive-need to buy/rent land and/or building plus equipment, trainer, etc. DifficultPotentially low-employees may not take training as seriously More stringent driving record checksImmediate~$2-3 million per yearEasyUnknown-Could lose employees due to results of check