Terms of Projects Profitability and Financing Issues

Question: Requirements 1 Calculate the post-tax cost of capital for the move of Arden Ltd into the air freight industry having incorporated both business and financial risk into this evaluation. Further evaluate why the air freight Industry may have a different Beta than the passenger airline industry. Requirement 2 Critically evaluate CAPM as a methodology to get a value for the cost of equity for a company. Explain to Steve Culley, the CEO, what unsystematic risk is and its relevance to the CAPM calculation. Discuss why increasing gearing links into an increasing cost of equity and then briefly whether this would then lead to an increasing WACC. Requirement 3 Evaluate the NPV on this project using your previously calculated WACC. Steve Culley is also interested in your views on some other financial evaluation techniques he has heard of, namely MIRR and discounted payback and would like you to explain two benefits of the use of each of the techniques for Arden. Finally Steve is intensely aware of the risks around sales falling in this project and would be interested in you helping him to understand the significance of this variable. Requirement 4 Steve is also interested in understanding the Black Scholes formula better and specifically how it could accommodate the air freight opportunity. He has seen the call option formula but would like your reasoning on the effect of the 5 components specifically the way a change in each of them individually would lead to a higher value for the call option on the potential expansion after the 4 year point. Reducing risk (details in Appendix 2) Requirement 1 Explain a range of internal techniques for mitigating risk on the fuel payments that Arden has to make. In discussing these techniques critically evaluate their use under the circumstances of Arden. Requirement 2 Evaluate the hedging options available to Arden (based on the data in appendix 2) for the $20,000,000 borrowing requirement, assuming that on Oct 1st 2016 US Libor equivalent is 6% and the closing Futures price available is 93.80. The evaluation should include a numerical analysis and an identification of the steps involved in each hedging strategy selected, along with any advantages and disadvantages of the selected strategy. Requirement 3 Evaluate the use of using US dollar denominated debt (as opposed to UK debt) to finance the potential new US operations. Your analysis should also include the potential benefits that may accrue from a currency swap with a US company who may be looking to borrow in UK pounds. Illustrative calculations can be used to show this benefit to Steve Culley. Financing issues (details in Appendix 3) Requirement 1 With respect to the Financing needs linked to the purchase of the new planes, critically evaluate the logic for using more Debt finance, versus equity, for Arden with particular focus on its own circumstances and the industry conditions of the Airline industry. Requirement 2 Critique the proposal to sell off the Hotel division of Arden as a way of raising finance but also as a long term commercially sensible solution for a business requiring accommodation for its employees. Requirement 3 Discuss the key reasons why Arden should list on a Stock exchange, focusing on benefits outside of just the raising initial finance through an Initial Public Offering (IPO). Detail for Steve responses on those areas of the IPO process that he doesnt fully understand and explain to him the benefits of a premium market listing on the London Stock exchange.(Premium listing versus Standard listing). Also briefly assess whether this will be a significant challenge for Arden in meeting these criteria for a premium listing. Answer: Air freight opportunity Requirement 1 Calculation of Post-tax Cost of Capital Cost of equity capital: It can be calculated by using the following CAPM formula: E (Ri) = Rf + i [E(Rm) - Rf] Here, Rf = 4% = 1.65 E(Rm) = 10% Thus, cost of equity will be: = 0.04 + 1.65(0.10 - 0.04) = 0.04 + 1.65(0.06) = 0.04+0.099 = 0.139 = 13.9% Cost of debt: It can be computed by using the below formula: Cost of debt = Here: I = Interest rate (Assumed as 10%) T = Tax rate (20%) = Market price of debt (Assumed as 125) Thus, debt cost will be: = 6.4% Now, WACC can be calculated as below: Source Value of share Weight After tax cost % Total capital cost Equity share capital 100m 0.33 0.139 0.04587 Debenture 200m 0.67 0.064 0.04288 Total 300m 1.00 0.08875 or 8.875% Thus, it is clear that the cost of capital for the company is 8.875% or 9%. The air freight industry must have a different beta than the passenger airline industry because beta is calculated from movements in the historical stock price that include both industry and finance risk. As industry risk is influenced by factors such as demand of the product, raw material prices, substitutes availability, etc., there must have a different beta for the air freight industry (Brown, 2010). Requirement 2 Evaluation of CAPM methodology to Obtain the Cost of Equity Value For the valuation of risky securities, capital asset pricing model (CAPM) is an effective framework. The CAPM model defines that an asset's expected return is related to its risk as measured by beta (Pratt and Grabowski, 2010). The below is the formula for CAPM model: E(Ri) = Rf + i [E(Rm) - Rf] (Stowe, 2007). Where E(Ri) = Expected return on asset Rf = Risk free rate of return (Stowe, 2007). E(Rm) = The expected return on the market portfolio i = beta, or the sensitivity of the assets to returns on the market portfolio (Stowe, 2007). CAPM based expected rate of return can be used for valuing the cost of equity for a company. It is because as the CAPM depicts equilibrium and all risks are captured by beta, risk adjustments can be made by the investors based on beta. In addition, as the calculation of CAPM requires only some inputs and based on some simplifying assumptions, it is a preferable method to calculate firm's cost of equity (Viebig, Poddig and Varmaz, 2008). But, at the same time, as this model only considers systematic market risk, such risks might not be the only factor for defining all the variations in share prices. It shows that the major disadvantage of this method is related to the ignorance of unsystematic risk. It is because due to the ignorance of the unsystematic risk, the CAPM and beta are unable to define the amount of significant differences in stock returns (Pratt and Grabowski , 2010). In contrast, this model views that all the firms face the systematic risk (identified through beta), whic h no investor can remove from their chosen portfolio investments. Therefore, CAPM method provides as effective measure to value the company's equity cost of capital. On the other hand, unsystematic risk is a company-specific risk that can be eliminated by the investors in their portfolio through diversification. The CAPM model also considers that by holding a broad portfolio that wipe out the effects of unsystematic risks, such risks can be eliminated. It reflects that CAPM methodology ignores the unsystematic risk and thus, this risk in not relevant to the CAPM calculation. It can also be discussed that increasing gearing results into an increasing cost of equity. Gearing refers 'to the ratio of borrowed capital by the firm at a fixed rate of interest to the firm's total capital' (Collin, 1998). The main reason behind this is that due to increasing gearing or issue of more debt, more interest is disbursed of profits before stockholders can get paid their dividends (Heffernan, 2005). Furthermore, bigger interest payments increase the unpredictability of payment of dividends to shareholders. It is because if the company has inadequate profits in a year, there is still need to pay increased interest payments, which may affect the ability of the company to pay dividends. Moreover, it increases the financial risk to shareholders, due to which they require more return on their investment to compensate the increased risk resulting in increasing the cost of equity (Heffernan, 2005). In addition, the increase in cost of equity due to increasing gearing would als o result in an increasing WACC. It is because WACC (weighted average cost of capital) is a simple average between the cost of debt and the cost of equity. Concurrently, as the cost of equity increases, it would also lead to increase in the WACC. Requirement 3 Calculation of NPV The below table shows the calculation of cash flows for the project: The following table summarizes the NPV calculations: It is clear that this project has positive NPV of 35.34. Thus, it can be stated that investment in this project would be beneficial to maximize the shareholder value and attain positive benefits. There are also other techniques, which can be used for assessing the viability of an investment project. The main techniques include modified internal rate of return (MIRR) and discount payback period. The benefits of these techniques for Arden is as below: MIRR: The main advantage of this technique is that it considers all the project's cash flows and also considers time value of money, which will be helpful for Arden to produce more effective results (Fabozzi, Drake, and Polimeni, 2007). It will also be beneficial to inform about the increase in the company's value through an investment. It also considers the risk of future cash flows through the cost of capital while making decisions (Brigham and Daves, 2014). Discount Payback: It also considers the concept of time value of money, thus it would be supportive for Arden to effectively evaluate the new project and produce valid results (Fabozzi and Drake, 2009). Another benefit is that it would also be advantageous for Arden to assess the risk of new business venture's cash flow through the cost of capital (Fabozzi, Drake, and Polimeni, 2007). Sales is an important variable while assessing the viability of a project. It is because sales figure is used to determine the cash flows from a project by reducing the operating expenses and making adjustments for depreciation and tax. Therefore, it is essential to accurately make assumptions regarding sales by considering the market and demand factors. Requirement 4 Black Scholes formula The Black-scholes formula was developed by the three economic experts including 'Fischer Black, Myron Scholes and Robert Merton' (CvitaniĆ¡ and Zapatero, 2004). The formula can be used for calculating the European put and call options' theoretical price. Similarly, it could accommodate the air freight opportunity by providing a way to evaluate call and put option. There are certain assumptions, on which the formula works. These include 'during the option's life no dividend is paid, the options are European and can only be worked at the end, no movement in the market, no commission, constant risk free rate and volatility, and normally distributed returns' (Mayo, 2016). The below is the Black-scholes formula: C = SN(d1) - N(d2)Ke-rt (Mayo, 2016). In this, d1 and d2 can be calculated as follow: d1 = d2 = d1 - s. Here, C = Call premium S = Current stock price T = time K = Striking prices of the option R = Risk-free interest rate N = Cumulative standard normal distribution e = Exponential term s = Standard deviation In = Natural log It shows that the formula has five main components including 'current underlying price, options strike price, time until expiration, which is expressed as a percent of a year, implied volatility, and risk-free interest rates'. There is a relationship between each independent variable and the call value due to which the changes in the each component leads to higher call option value. For example, An increase in the stock's price, increases the call options value. It is because the intrinsic option value rises as per the increase in the stock price (Mayo, 2016). Similarly, a decrease in the strike price, increases the call option's value. A gain in to the time to expiration also increases the value of a call option because as time decreases, the value of option also falls (Mayo, 2016). A rise in the stock's variability also increase the value. For the reason, a speculator will get an option more attractive with a volatile stock than an option with a stable stock price. Interest rate increase will also increase the call option value as higher interest rates are related with higher call option valuations (Mayo, 2016). Reducing Risk Requirement 1 The below are the techniques available that can be used by Arden for mitigating risk on the fuel payments. Internal Control Framework: Firstly, to mitigate the risk, Arden should establish a internal control framework approved by the company's management and board. The framework must ensure internal control in different areas including fraud prevention, exact management information, separatism of duties, execution of approved strategies, and fuel payment audit in order to mitigate the risk (HSBC Bank Middle East, 2014). For example, management must be provided accurate information about the fuel payments so that effective decisions can be made to control the risk related to fuel payment. This technique will be beneficial for Arden as by making an effective internal control system, the company can avoid the use of external hedging techniques. It would also be cost effective for the company due to assurance about the optimum utilization of available resources. Scenario Planning: It would also be an effective technique for Arden to mitigate the fuel payment risk. In this, the risk managers at Arden Ltd. can evaluate the business sensitivity to the changes in fuel prices and can develop contingency plans accordingly to reduce the adverse impact of the changes in the price of fuel (Kinder, 2008). The implementation of this technique can create additional cost for the company due to requirement of expertise people for scenario planning. Collaborative Technologies: The use of such technologies can also be beneficial to mitigate the risk effectively. For example, combined human knowledge and sharing of information can be beneficial for Arden to reduce the extent to which fuel payments can adversely affect the business (Kinder, 2008). Continuous Business Process Optimization: Implementation of effective risk management processes along with the use of proactive measures and technologies can be beneficial to get early information about the changes in fuel prices and thus, find suitable ways to control the situation in an effective and efficient manner (Kinder, 2008). Requirement 2 Calculation of interest =20,000,000*6%*90/360 =300,000 Profit earned on the future position = 100-6 = 94 Thus, profit earned will be = 94-93.80 = 0.20 Future Hedging Strategy The below are the pros and cons of the future hedge strategy: Advantage: Lack of credit risk, Possibility to extend the delivery date as well as closing out prior to maturity (Jovanovic, 2014). Limits price risk (Friedman and DeCorla-Souza, 2012). High Liquidity, and Extremely standardized contracts in the form of location delivery, quantity, and quality. Disadvantage: Require daily settlement, Likely profit is limited (Jovanovic, 2014). Uncertainty of future returns. Requirement 3 In order to finance the new US operations, the company can use US dollar denominated debt as opposed to UK debt. Such kind of transactions are known as SWAPs. Swaps are OTC products, which 'require the swapping of one future cash flow for a different future cash flow, where both flows are defined by a benchmark' (Loader, 2013). Equity, Currency, and interest rate swaps are common examples. 'A currency swap is an interchange of certain amount of cash flows in one currency for a series of cash flows in another currency at pre-defined period and interest rate basis' (Loader, 2007). For example, through currency swap with a US company, which is also searching to borrow in UK pounds, Arden Ltd. can borrow money cheaper. It is because with the help of currency swap, 'Arden will borrow British Pounds on a floating rate basis from its bank and then swap this GBP principle amount for USD with the swap bank counterparty' (Loader, 2013). Both the companies can agree to pay a fixed interest rate on the USD and recieve a floating interest rate on the GBP, which Arden can use to pay the floating rate interest on the original GBP loan from its bank. Another benefit of currency swap for Arden is that it will protect the company against changes in foreign exchange during the period of swap as well as defend against changes in the interest rate in the UK market throughout the borrowing period (Loader, 2007). The negative aspect of currency swap is that Arden may need to exchange the principle amount at both the swap term beginning and end at an fixed rate agreed. However, the positive aspect of currency swap outweigh its negatives, thus, it can be discussed that use of swap will be an effective option for the company. Financing Issues Requirement 1 In order to purchase the new planes, Arden require significant funds. There are several financial sources available including debt finance and equity finance that can be used by the Arden as per the suitability with its business nature. The below section critically evaluates the logic behind the use of more debt finance against equity for Arden: The meaning of debt financing is to borrow money from an external source with the assurance to pay back the borrowed money plus a specific interest on a particular date. Debt financing has many advantages over equity financing for a business like Arden. For example, as the Airline industry is a capital-intensive industry with the high cost, it is beneficial to maintain high debt-to-equity ratio to reduce the capital cost by obtaining the cheaper debt (Bloomberg, 2016). In addition, the another advantage of debt funding against equity is that it will provide range of choices to Arden in order to obtain the required finance. For example, Arden can get money either from bank loan, other financial institutions, corporations, and by issuing debentures. At the same time, debt would also be advantageous over equity for Arden in terms of lack of interference of the lenders in the business decisions and operations. In addition, as currently, Arden has a debt-equity ratio of 1:1, it would be easy for the company to raise more funds through debt financing. But, concurrently, the negative aspect of debt funding versus equity financing is that Arden will need to repay debt along with interest each month no matter what will be the performance in the end of the year. However, it can be discussed that due to high cost and huge capital investment requirement, the use of debt financing would be more beneficial for the company as compared to equity financing. Requirement 2 Arden is also considering the sell off the Hotel division in Paris in order to raise fund to finance the new project. This proposal can have both advantages and disadvantages for the company. The main benefit of raising finance through sell off the hotel part is that it can easily raise fund at comparatively less cost and with fewer legal requirements. In addition, this option would also be beneficial for Arden to gain access to money engaged in hotel division (Jowsey, 2014). It is because due to the reduced flight schedule in the last couple of years, Arden is planning to sale spare capacity in the hotel. Moreover, the released funds from the hotel division can also be beneficial to finance the new service business. In addition, Arden can also get other benefits from this option such as use of assets and transfer of the property value risk to a third party. In contrary, this option will also create disadvantage for the company as the hotel division will no longer be owned by Arden, which will weaken the company's balance sheet (Jowsey, 2014). At the same time, it will also close the option to gain access to the funds by securing a loan using the hotel division. Moreover, it is also possible that the long-term value of the property will be greater than if they remain in the company's ownership. Concurrently, it will also end of the option to use the hotel division 'as a long-term commercially sensible solution for a business requiring accommodation for its employees' and generate a new revenue source for the company. Thus, it shows that the option to sale the hotel division of Arden has both positive and negative aspects and as negative aspects outweigh positive aspects, it can be stated that this is not an effective proposal for the company. Requirement 3 An initial public offering (IPO) is the process by which a firm that is managed privately issues shares of the stock for the first time to the public (Gullifer and Payne, 2015). In the growth of a business, IPO is an important stage as it provides access to wide capital market and also increase the company's credibility and vulnerability. The below are the key benefits that reflect the reasons why Arden should list on a Stock exchange: Bettered Financial Position: In an immediate manner, an IPO can improve the financial condition of Arden. For the reason, sale of shares to the public brings in money that does not have to be repaid, thus it helps in improving the financial position of the company (Ernst and Hcker, 2012). Increased Shareholder Value Commencing with an IPO, may increase the stock's value unusually. In addition, publically traded shares also command upper prices in comparison of those that are not, thus, it would be beneficial for Arden to increase the total shareholder value. Investors are also willing to pay for listed companies due to shares liquidity, maturity, and the availability of more information (Gullifer and Payne, 2015). Variegation of Shareholder Portfolios IPO will also provide an opportunity to Arden to pull parts of its assets out of the company (Ernst and Hcker, 2012). In simple word, it can be stated that by going public, Arden can secure the company's future. Creates Opportunities for Future Fundings Through an IPO, Arden can improve the company's net worth as well as create a border equity base (Ernst and Hcker, 2012). Moreover, the bettered equity ratio will make easier the borrowing of additional money as requires and will also reduce the borrowing's current cost. More Capital The main benefit is that the net proceeds from the sale of shares through an IPO provides working capital for a firm (Gullifer and Payne, 2015). Similarly, in the case of Arden Ltd, the capital can be used to fulfil the financial needs to purchase new planes. Thus, it shows that in addition to raise initial finance, an IPO also provides other benefits related to ensure about future financiang requirements and improve current financial position. IPO Process Lead Manager The main logic for the lead manager is to prepare the company to go public in an effective manner. The lead manager has the responsibility to develop confidence and respect within the industry as well as provide innovative ideas to make sure about the future growth. Underwriting Underwriting is an important step in an IPO process as the underwriter act as a mediator between the company and the capital markets. There are different kinds of underwriting agreements such as best efforts, all or none, and firm commitment that can be used by the company to start with an IPO. For example, through a firm commitment agreement, the company can transfer the risk of not selling the shares to the underwriter, which is the main reason behind underwriting of the share issue. A prospectus is prepared by the company to attract investors and shareholders to invest in the company. Content of the Prospectus The following content should be included in a prospectus: Information about the group structure of the company and its subsidiaries, Company history and share capital, Details of the industry sector, in which the firm operates and its main competitors, Last three years financial information, Current and future business plans, Compensation of the directors and their interest in the company, Compliance with the UK corporate governance code (Withers Worldwide). Information about current or any planned share option schemes, Any ongoing judicial proceedings of a material value, Risk factors influencing business (Withers Worldwide). Material contracts including IPO advisers, Information about listing process. Benefits of a Premium Market Listing on the London Stock exchange Premium listing and standard listing are some of the main routes to join the main market of the London stock exchange. Premium market listing provides additional benefits including lower cost of capital, greater transparency, and improved investor confidence to the company (London Stock Exchange Plc, 2016). The main reason behind the availability of these benefits under premium listing is that it requires compliance with the highest standards of regulation of the UK as well as corporate governance (Poitras, 2012). In addition, companies with a premium listing are also required to comply with the 'UK's super-equivalent rules which are higher than the EU minimum requirements (required to comply under standard listing)' (London Stock Exchange Plc, 2016). Another difference in both listing routes is that premium route is only open to equity shares while standard listing route is open to the issuance of equity shares, debt securities, global depositary receipts, and securitised derivative s. In addition, it is also assessed that Arden will face considerable challenges in order to meet criteria for a premium listing. It is because it is difficult to understand and comply with the high standard UK's rules and regulations without the help of a right adviser. Moreover, the company also needs to be aware about different key obligations related to notice period, relationship agreement, directors' retirement, dealing restrictions, etc. in order to avoid corporate governance issues (Withers Worldwide). Thus, in order to ensure the success of an IPO through premium listing, the company should take the service of a adviser such as lawyers, PR consultants, and an investment bank. Conclusion From the above discussion, it can be summarized that the use of CAPM methodogy provides an effective tool to measure the firm's cost of equity capital. It can also be summarized that before using a particular finance source, the firm must evaluate each option available in terms of its costs and benefits so that an effective decision can be made. This can be also inferred that as the aviation industry involves high risk, the use of more debt finance would be appropriate to reduce the overall firm's cost of capital. References Bloomberg (2016) Available at: https://www.bloomberg.com/news/articles/2009-12-04/raising-capital-equity-vs-dot-debt [Accessed: 3rd August, 2016]. Brigham, E. F., and Daves, P. R. (2014) Intermediate Financial Management. USA: Cengage Learning. Brown, R. E. (2010) Business Essentials for Utility Engineers. USA: CRC Press. Collin, P. H. (1998) Dictionary of Business. UK: Taylor Francis. CvitaniĆ¡, J. and Zapatero, F. (2004) Introduction to the Economics and Mathematics of Financial Markets. USA: MIT Press. Ernst, D. and Hcker, J. (2012) Applied International Corporate Finance. Vahlen. Fabozzi, F. J. and Drake, P. P. (2009) Finance: Capital Markets, Financial Management, and Investment Management. USA: John Wiley Sons. Fabozzi, F. J., Drake, P. P., and Polimeni, R. S. (2007) The Complete CFO Handbook: From Accounting to Accountability. USA: John Wiley Sons. Friedman, D. M. and DeCorla-Souza, K. (2012) Guidebook for Evaluating Fuel Purchasing Strategies for Public Transit Agencies. Transportation Research Board. Gullifer, L. and Payne, J. (2015) Corporate Finance Law: Principles and Policy. UK: Bloomsbury Publishing. Heffernan, S. (2005) Modern Banking. USA: John Wiley Sons. HSBC Bank Middle East (2014) Managing and mitigating risks in treasury. Available at: https://globalconnections.hsbc.com/uae/en/articles/managing-and-mitigating-risks-treasury [Accessed: 3rd August, 2016]. Jovanovic, S. (2014) Hedging Commodities: A practical guide to hedging strategies with futures and options. Harriman House Limited. Jowsey, E. (2014) Real Estate Concepts: A Handbook. UK: Routledge. Kinder, A. (2008) Mitigating Risk through Best Practices. Available at: https://www.sdcexec.com/article/10289589/mitigating-risk-through-best-practices [Accessed: 3rd August, 2016]. Loader, D. (2007) Fundamentals of Global Operations Management. USA: John Wiley Sons. Loader, D. (2013) Clearing, Settlement and Custody. UK: Butterworth-Heinemann. London Stock Exchange Plc (2016) About the Main Market. Available at: https://www.londonstockexchange.com/companies-and-advisors/main-market/main/market.htm [Accessed: 3rd August, 2016]. Mayo, H. B. (2016) Investments: An Introduction. USA: Cengage Learning. Poitras, G. (2012) Handbook of Research on Stock Market Globalization. UK: Edward Elgar Publishing. Pratt, S. P. and Grabowski, R. J. (2010) Cost of Capital in Litigation: Applications and Examples. USA: John Wiley Sons. Pratt, S. P. and Grabowski, R. J. (2010) Cost of Capital: Applications and Examples. USA: John Wiley Sons. Stowe, J. D. (2007) Equity Asset Valuation. John Wiley Sons. Viebig, J., Poddig, T. and Varmaz, A. (2008) Equity Valuation: Models from Leading Investment Banks. USA: John Wiley Sons. Withers Worldwide (n.d) Obtaining a premium or standard listing on the London Stock Exchange. Available at: https://www.withersworldwide.com/system/files/3404/original/ObtainingAPremiumOrStandardListingOnTheLondonStockExchange.pdf [Accessed: 3rd August, 2016].

The aim of this project is to find out which factors affect the selling price of a house Essay Example Essay Example

The aim of this project is to find out which factors affect the selling price of a house Essay Example Paper The aim of this project is to find out which factors affect the selling price of a house Essay Introduction The aim of this project is to find out which factors affect the selling price of a house. I have been given four districts, and in each there are four streets. In each of the 16 streets there a number of houses which the previous factors effect and result in a different house price. In the data presented I have found several rogue results (results that do not fit in with the rest of the results). If these were to be kept, the results would be biased and so these rogue items must be removed. The rogue items were à ¯Ã‚ ¿Ã‚ ½475, 000 in house price, 13,000 in squared ft and 20 in number of bedrooms. They are too large to fit in with the other data. The ranges (highest – lowest values) where à ¯Ã‚ ¿Ã‚ ½161, 800 in house price, 2900 in square ft and 6 in number of bedrooms. 27% of the homes had a large garden, 62.5% had a small one and none was 10%. In Garages 68% had a garage and 32% didn’t.In order to get an idea of the nature of this data I have been given, I will divid e Price into suitable groups and draw a histogram. Then I will make a cumulative frequency table and draw a cumulative frequency curve. I will then state my median and the inter-quartile range for my cost, as outliers do not affect them.Out of the fields given, some of these affect the price of the houses. The fields that will affect the house price are if the house has a garden, if the house has a garage, the number of bedrooms in a house and the area (square ft) of a house. The field that will not affect house price is house number.The fields in order of importance are, number of bedrooms, area (sq ft) of a house, if the house has a garden, if the house has a garage and finally house number which has no importance at all.My main Hypothesis is that â€Å"Price will be affected by some factors†PlanI am going to investigate the correlation between price and no of bedrooms in one street and one district (Arlington, Primrose Street). This is so that all other variables will rema in constant.Then I will make a sample to make it more manageable, it will contain even amounts on all four streets so that it’s not biased, and isn’t biased to any district or street. After this I will draw a histogram and cumulative frequency for the population and sample then I will compare my results.I will then draw several box plots for the price for each district to see if my data is valid, this could affect my observations.After this I shall draw several scatter graphs, and I will analyze the correlation, each will be named and have a line of best fit and equation for the line presented.First HypothesisI expect that as the number of bedrooms increase; the price will increase accordingly, the correlation will be therefore positive.The reason in taking one district and street is because when the houses are in the same street they are roughly the same price; the other variables that are not number of bedrooms will be kept constant.Testing the HypothesisSamplingAs t o make this unbiased, we first picked a number from 1 – 5 randomly, if I were just to pick number 1 that would mean all the numbers at the bottom would not be included in our sample. We picked 1 – 5 as we can count out 10 numbers from each of the points. I picked each 5th value. Next I had to determine the size of my sample using stratified sampling, I chose 40, as it is easy to work with and allowed me to get 10 streets from each district.x- – – – – – X 40 =200With this equation I can find the same proportion in sample as we have in the population. In this case x is number of houses.As we do not just want to pick a random 10 numbers from my sample, as this would be biased, I used systematic sampling and decided to choose every 5th data entry.Using The SampleI am going to draw a histogram for the sample and compare the values with that of the histogram for the whole population. I then drew a cumulative frequency curve of the sample an d compared it with the cumulative frequency curve of the whole population.Below is a table of median, lower quartile, upper quartile and inter-quartile range.CF Graph of theMedianLQUQInter-Quartile RangePopulationà ¯Ã‚ ¿Ã‚ ½68,000à ¯Ã‚ ¿Ã‚ ½44,000à ¯Ã‚ ¿Ã‚ ½108,000à ¯Ã‚ ¿Ã‚ ½64,000Sampleà ¯Ã‚ ¿Ã‚ ½76,000à ¯Ã‚ ¿Ã‚ ½44,000à ¯Ã‚ ¿Ã‚ ½128,000à ¯Ã‚ ¿Ã‚ ½84,000Modal class is the value, which the highest frequency occurs in.From looking at our histograms it is clear that there is a definite modal class in both, it is in the à ¯Ã‚ ¿Ã‚ ½40,000 to à ¯Ã‚ ¿Ã‚ ½50,000 section, this value is highest in both. The lowest values in both are in the à ¯Ã‚ ¿Ã‚ ½160,000 to à ¯Ã‚ ¿Ã‚ ½200,000 bar. The Inter quartile range of the population is lower than that of the sample; this shows the measure of spread is greater in the sample. The greater measure of spread is because the results are more spaced out, i.e. a higher upper or lower quartile in the sample than that of the populations. The layo ut in both sample and population histograms is very similar proving the sample that has been taken is a good representation of the population.I then drew box plots for the price. I found that in Arlington the median was à ¯Ã‚ ¿Ã‚ ½129,800, therefore on average the house prices in that district are dearer. In Castlemains there is an even distribution of mid-priced houses. In Tobermory there are more expensive houses than cheaper ones. Also in Westlake most of the houses are cheap compared to the others. If the median is closer to the LQ it is positively skewed, in my box plots Tobermory and Castlemains are positively skewed. Therefore this means the values above the median are more spread out that than below the median. If the median is closer to the UQ it is negatively skewed. Westlake and Arlington are negatively skewed in this case; this means the values below the median is more spread out.The stronger the gradient the stronger the relationship is. Price of a house = in Arlington ’s case: -Price = 18650 times number of bedrooms plus 51900 the answer to the equation would therefore be more reliable with a greater gradient.I calculated the IQR of each district and found that Arlington an IQR of 21,750 this shows a greater range in prices. This compared to Westlake with an IQR of 10,675. This means that the smaller the value the less range of prices in the district. Castlemains had an IQR of 15,300 and Tobermory an IQR of 18,475; again from this we can establish a pattern.The stronger the gradient, the stronger the relationship is.Looking back at my scatter-graphs using the R squared value I can determine the correlation of the graphs. The strongest graph of positive correlation is for Arlington with an R squared value of 0.9272. The graph that shows the weakest graph of positive correlation is for the Castlemains district.Using the equation of the line I was able to interpret the missing data. I will demonstrate how I gathered the missing data. These ar e 2 examples.Arlington (house number 154)Y=18650x + 51900122400= 18650x + 51900(-51900)70500=18650xx= 3.78 xà ¯Ã‚ ¿Ã‚ ½ 4Castlemains (house number 76)Y=17379x + 11107Y= 17379 (3) + 11107Y= à ¯Ã‚ ¿Ã‚ ½63244The missing data is presented in the blue. They are:DistrictStreetHouse NumberNo. Of BedroomsHouse PriceArlingtonCherrytree1544à ¯Ã‚ ¿Ã‚ ½122400ArlingtonOakhill845à ¯Ã‚ ¿Ã‚ ½146650DistrictStreetHouse NumberNo. Of BedroomsHouse PriceCastlemainDeerpark763à ¯Ã‚ ¿Ã‚ ½63200CastlemainHighfield274à ¯Ã‚ ¿Ã‚ ½80600DistrictStreetHouse NumberNo. Of BedroomsHouse PriceTobermoryArchvale512à ¯Ã‚ ¿Ã‚ ½38600TobermoryBallyrae193à ¯Ã‚ ¿Ã‚ ½50500TobermoryParkmore453à ¯Ã‚ ¿Ã‚ ½48000DistrictStreetHouse NumberNo. Of BedroomsHouse PriceWestlakeMaltby613à ¯Ã‚ ¿Ã‚ ½41500I rounded these values to the nearest à ¯Ã‚ ¿Ã‚ ½100, as the R Squared value is not 1, it is not exact.I compared my missing data with the trends of the houses in my sample. Also all of my graphs had positive correlation and a hi gh R squared value. Although they cannot be perfect values as the R squared value is not exactly 1 and the number of bedrooms is discreet data be. Also there is some data that breaks the trend e.g. Tobermory no. 49 Millrow has an area of 40900 sq ft and 3 beds which costs à ¯Ã‚ ¿Ã‚ ½48000 whereas 17b Ballyrae Tobermory has 2 beds and an area of 45150 sq ft and costs à ¯Ã‚ ¿Ã‚ ½50,5000. So the number of bedrooms is not the over-ruling factor in all of these houses.From this I can conclude that my first hypothesis has been confirmed as it fits the pattern.†Number of Bedrooms does affect the Price of Houses†ConclusionI found that the number of bedrooms in a house does affect the overall price. I drew various graphs including Scatter graphs, Box plots and Cumulative Frequency Curves, these all support my hypothesis, therefore I believe it to be correct that â€Å"some factors do affect house price†We were given a population that contained 200 houses in 4 districts w ith 50 houses in each district. There were a few limitations of the data as parts of the data were incomplete (missing) and some more information would have been helpful like e.g. age of house and where is it situated (as we do not even know it these houses are in the same town). It was not appropriate to use the whole range of data, as some of it was rogue.My sampling technique was the most appropriate as it was easy to work with, but it was small, if I were to repeat my sampling I would take 60 values instead of 40. The population was represented well by the sample.My overall strategy was effective; my only criticisms are that I could have drawn both Histograms on the same graph, as well as both Cumulative Frequency graphs on the same sheet. It would have been easier to compare to one another using the % Frequency Density/Cumulative Frequency values. I did address the problem I had hoped. The limitations were that I could not draw box plots for the number of bedrooms as it is disc reet data, instead of a box plot I could have drawn a pie chart or bar chart to represent the number of bedrooms. Also we do not know about the condition of the house or its interior. Modifications could have been made to the houses like extensions, central heating fitted, double-glazing or a loft conversion.If I were to have more time I would investigate the square footage of the house using the same sample and technique I employed earlier. Then after that I would investigate if a garage affects the price of a house also.Any house that breaks the trend could be down to its condition or modifications made to its interior or exterior. More data would have been helpful to gather a clearer overall picture. The aim of this project is to find out which factors affect the selling price of a house Essay Thank you for reading this Sample!

Want to Know More About Percy Jackson Essay Topics Sea of Monsters?

Want to Know More About Percy Jackson Essay Topics Sea of Monsters? The Characteristics of Percy Jackson Essay Topics Sea of Monsters Training to compose essays on various topics is going to be the ideal preparation to the exam. Other folks think that it wouldn't help. Studying should incorporate task of essay that argues a specific idea. Students will discover that it's simpler to write about topics which they are interested in, and it'll make the researching process much simpler. They are not able to come up with a good piece of prejudice essays, not because they can't write essays but probably because of the fact that they are not able to develop good titles for essays on prejudice. Just writing the essay outline isn't going to do, you have to be well conscious of how to use the exact same to propagate your essay. The more information you are able to gather about the subject, the better prepared you'll be for writing your essay. You could possibly be offered a list of essay prompts to select from. The subject can be associated with science or literature. Remember that you may make funny argumentative essays if you do a few things. After you imitate the job written by somebody else and move it as your individual it's generally referred to as plagiarism. Persuasive essay topics don't always need to be of a severe nature, you can write about things which are connected in your life. In an issue of speaking, picking out persuasive essay topics is similar to telling yourself what you wish to convey to the rest of earth. On the flip side, if you've got to compose a persuasive essay, all the matters mentioned previously don't play such significant function. B efore making up a last choice, think about the simple fact your essay is a bit of academic writing, which means it ought to be relevant and rather formal. In most instances, you will need to think of a topic which will allow other people to realize your perspective, and telling them to think that what you write is true. You should have accessibility to proper resources which will enable you to compose the essay with appropriate sense and structure. There are some essential rules when you're thinking about deciding on this issue. To choose which subject you're likely to discuss, it's vital to see the complete collection of good persuasive speech topics from the specific area of study. There are invariably a broad range of opinions on the field of technology, and here are our favourite things to consider on the subject. Taking into consideration that there's a variety of topics and ideas for persuasive papers and unique strategies to create them, often it becomes difficult for students to pick the most relevant and intriguing topic and method to follow. Percy Jackson Essay Topics Sea of Monsters Explained The book ends as summer draws to a close, and the many demigods leave to return to school in the standard world. For a student in the center school the usual topics are associated with science and history. Finding out how to compose an essay is something which will help students not just in their school and college career, but throughout their life too. Sometimes teachers give individual topics to every student, and at times they don't. Kissing in public needs to be banned Men needs to be sent to a different planet. Percy having no idea what's happening and so Grover explains where they're going. Percy is in fact the son of Poseidon. Although Percy struggles to be successful in his classes, he's hardly worthless. If you are pleased with the degree of your knowledge on a specific subject, hen you may safely consider it as the topic for your essay. Once you comprehend the form of essay, it's time to choose a topic. You have to make sure you're very interested in the topic before you are able to persuade others about it. You will probably locate a different and fantastic topic you will love to write about. After you have the topic, answer the question and support your answer with three or more explanations for why you believe it. Second, talk what you shouldn't do instead of what should be done. There are just a few things that define whether an essay you're working on is going to be a good one. When it has to do with writing an argumentative essay, the most crucial issue to do is to select a topic and an argument you may really get behind. Pets should be permitted in school. Pregnant couples should get parenting lessons. Parents should speak to kids about drugs at a youthful age. Parents of bullies should need to pay a fine.

How to Incorporate an Interview Into a Research Paper

How to Incorporate an Interview Into a Research PaperUnderstanding how to incorporate an interview into a research paper is a key skill that most students fail to possess. These students will then find themselves finishing the paper before they even get around to reading it.The fact is that writing is not something that can be perfected overnight. Many students begin to realize that there is no shortcut to this process, and they just give up trying. This is why the ability to incorporate an interview into a research paper is so important.An interview can take your research paper from being a pile of half finished work to one that you can be proud of. When you are able to integrate an interview into a research paper, you will learn that writing for the audience that you are writing for, in order to convey your ideas in the most effective way possible, is imperative. This means that you will need to know how to answer the questions that they will ask, as well as how to answer their que stions.A question that many people ask when they are asked to read a research paper is, 'how do I include an interview into my paper?' The answer to this question is actually quite simple. By making use of a research software program that is completely automated, it is quite simple for the student to write each and every section. This makes the entire process so much easier.Another thing that is important to remember when using these types of software programs is that they are very thorough. All of the information that you need will be sitting right at your fingertips, all you have to do is to choose what information you want to take from the interview and then integrate it with the information that you already have.The good news is that once you are able to incorporate an interview into a research paper, the professor who is grading your paper will not be able to tell the difference between it and any other part of the paper. If you have any doubts about the quality of the paper yo u will be able to explain them.To sum up, the key to how to incorporate an interview into a research paper is to be able to write it yourself. There are several programs available that are completely automated and will allow you to write any part of the paper without the need for an editor.Overall, when you are asking yourself how to incorporate an interview into a research paper, the answer is simple. Just make sure that you are writing for your audience and do not rely on professional help to do it for you.

Synthesis Essay Topics - Making Your Argument

Synthesis Essay Topics - Making Your ArgumentArgument synthesis essays typically use arguments as a method to demonstrate knowledge about the topic being covered. The essay is used to illustrate your expertise in a particular topic. It often serves as an introduction to the essay, and is also a common way to set the tone for the rest of the composition.This method of writing is best when you are covering various subject matters. There are many topics that can be covered in this manner. The most common one is known as argument building. Argument building involves using persuasive examples to create an argument about the topic that will persuade readers to accept your argument.Argument building requires that you make a strong argument. The argument needs to be persuasive, but there are specific ways to make your argument persuasive. You must have a proper argument in order to make an effective argument. This is why you need to learn the correct techniques for persuasion when writing an argument.One argument fallacy that you must be aware of is the logical flaw known as appeal to ignorance. This fallacy is basically saying that the person making the argument doesn't know what they are talking about. The logic is that if the person in question has no real knowledge of the topic they're making the argument on, then it must be true. It's like using language that people who don't know much about a subject would use to make the claim that the topic is so complex that only someone with extensive knowledge about the subject can comprehend it.The second logical fallacy is known as the appeal to the importance of opinion. If you're being interviewed by someone, you can use this argument to get the person to agree with you. They must be doing something wrong, because they're not being told the truth. You can use this argument to persuade others that the topic is important enough to respond to. Argument from authority also utilizes this tactic.Another argument technique that you can use to convince others is the argument from non-logical standpoint. This is a thinly-disguised appeal to emotion, and claims that the audience is missing the point. You can use this argument to sway people to agree with you by pretending that your evidence is better than their evidence.This type of persuasive argument is known as an appeal to the emotions. While you can use these techniques to convince people to do things you would never want them to do, the appeal to emotions is the most widely-used argument form. There are many other forms of argument you can use to persuade others, such as the argument from authority, argument from non-factual statements, and argument from personal experience.The number one mistake made by many writers is the fallacious use of argument. This happens when the writer takes an unpopular view and attempts to persuade others to agree with them. When you're writing an argument, try to find an unpopular position that will get the reader to agre e with you. You should then use that disagreement to convince them that your arguments are valid.

Custom Dissertation Writing Tutorial - Get to Know the Basics

Custom Dissertation Writing Tutorial - Get to Know the BasicsIn this dissertation writing tutorial you will learn about theses 250, a short course that has been created by David Douglas of the National Center for Academic Excellence. He tells about the need for this certificate. He also shares his thoughts and advice on what he considers to be the best way to gain an advanced degree. Here are some of the highlights:This dissertation writing tutorial will be a great starting point if you are about to write your first academic paper. It is designed to give a very basic overview of how you can write a dissertation. There are several tips that he suggests, so you can get started right away. In addition, David offers you the best approach to gaining an advanced degree.His custom dissertation writing tutorial helps you become familiar with the topic of your dissertation. It teaches you to use the basic outline of the thesis and how it works, as well as the different types of papers to writ e. You also learn how to write a thesis based on the information available in your research documents and how to summarize your work in a single, simple sentence.In this custom dissertation writing tutorial, David explains why it is very important to develop a personal approach when you are writing a thesis. He also offers you a variety of tips that you can use to add more depth to your writing. This is something that can really help you get better at the process of thesis writing. As you read through the entire text, you will find that this would help you avoid many mistakes and will help you avoid a lot of clutter and argumentative words.Writing a thesis can be a big job for you, but this tutorial is made to show you how to do it right. This is probably one of the best ways to learn how to make your own outline for a thesis. You should definitely take this particular custom dissertation writing tutorial into consideration before you begin your thesis writing project.In this custom dissertation writing tutorial, David explains how you can use a computer application to help you write a paper faster. He also offers you ideas on how to keep track of the various parts of your thesis. The whole thesis writing tutorial is really interesting, especially for those who are interested in gaining an advanced degree in writing. You can use this guide to help you become more familiar with the process of writing a thesis.With this thesis writing tutorial, you will be able to turn your homework essays into easy to read papers. The way that this tutorial is written is very clear and will give you tips to help you develop the skills you need to write an effective thesis. If you really want to learn how to do this, this is one of the best ways to get your hands on the basics.

About Presidential Pardons

About Presidential Pardons Not even President Gerald Fords pardon of Richard Nixon caused as much political and legal flak as former President Bill Clintons pardon of Marc Rich, indicted in 1983 on charges of racketeering and mail and wire fraud, arising out of his oil business. And then, before the Rich stew had reached a rolling boil, Sen. Hillary Clinton (D-NY) disclosed that her lawyer brother Hugh Rodham had accepted some $400,000 in fees to help two other felons get pardons from President Clinton. The two pardoned were Glen Braswell, who had served three years for a 1983 mail fraud conviction, and Carlos Vignali, who had served six years of a 15 year sentence for cocaine trafficking in Los Angeles. Sen. Clinton said she was very disappointed and saddened, and told her brother to give the money back and he did, but the damage had been done. Except to Braswell and Vignalie, who ended up drawing Get Out of Jail Free cards, after all. Now, President Bush has stated, Should I decide to grant pardons, I will do so in a fair way. I will have the highest of high standards. [From: Press Conference - Feb. 22, 2001] What are those high standards? Are they written down, and what gives the President of the United States the power to pardon anybody? Constitutional Authority for Presidential Pardons The power to grant pardons is given to the President of the United States by  Article II, Section 2 of the U.S. Constitution, which states in part:   The President ... shall have power to grant reprieves and pardons for offenses against the United States, except in cases of impeachment. No standards, and only one limitation no pardons for the impeached. Can Presidents Pardon Their Relatives The Constitution places few restrictions on who presidents can pardon, including their relatives or spouses. Historically, the courts have interpreted the Constitution as giving the president virtually unlimited power to issue pardons to individuals or groups. However, presidents can only grant pardons for violations of federal laws. In addition, a presidential pardon only provides immunity from federal prosecution. It does provide protection from civil lawsuits. What the Founding Fathers Said The whole subject of presidential pardons stirred little debate at the Constitutional Convention of 1787. No less estimable Founding Father than Alexander Hamilton, writing in Federalist No. 74, suggests that, ... in seasons of insurrection or rebellion, there are often critical moments, when a well-timed offer of pardon to the insurgents or rebels may restore the tranquility of the commonwealth. While a few Founders suggested involving Congress in the pardons business, Hamilton remained certain the power should rest solely with the president. It is not to be doubted, that a single man of prudence and good sense is better fitted, in delicate conjunctures, to balance the motives which may plead for and against the remission of the punishment, than any numerous body [Congress] whatever, he wrote  in Federalist 74.. So, except for impeachment, the Constitution places no restrictions whatsoever on the president in granting pardons. But what about those standards President Bush has promised to apply to any pardons he may grant? Where and what are they? Loose Legal Standards for Presidential Pardons While the Constitution places no significant limitations on them in granting pardons, we have certainly now witnessed the grief that can come to presidents or former presidents who appear to grant them haphazardly, or show favoritism in the act. Surely, presidents have some legal resources to draw upon when saying, I granted the pardon because... Operating under the guidelines of Title 28 of the U.S. Code of Federal Regulations, Sections 1.1 - 1.10, the U.S. Pardon Attorney, of the Justice Departments Office of Pardon Attorney assists the president by reviewing and investigating all requests for pardons. For each request considered, the Pardon Attorney prepares the Justice Departments recommendation to the president for the final granting or denial of the pardon. Besides pardons, the president may also grant commutations (reductions) of sentences, remissions of fines, and reprieves. For the exact wording of the guidelines used by the Pardon Attorney in reviewing requests for pardons, see: Presidential Pardons: Legal Guidelines. Keep in mind that the recommendations of the Pardon Attorney to the president are just that recommendations and nothing more. The president, bound by no higher authority than Article II, Section 2, of the Constitution, is in no way required to follow them and retains the ultimate power to grant or deny clemency. Should This Presidential Power be Limited? At the Constitutional Convention of 1787, delegates easily defeated proposals to make presidential pardons subject to the approval of the Senate, and to limit pardons to persons actually convicted of crimes. Proposals for constitutional amendments limiting the presidents pardoning power have been offered in Congress. A 1993 resolution in the House suggested that, The President shall only have the power to grant a reprieve or a pardon for an offense against the United States to an individual who has been convicted of such an offense. Basically, the same idea proposed in 1787, the resolution was never acted on by the House Judiciary Committee, where it slowly died. As recently as 2000, a Senate joint resolution proposed an amendment to the Constitution that would have allowed crime victims the right to reasonable notice of and an opportunity to submit a statement concerning any proposed pardon or commutation of a sentence. After officers of the Justice Department testified against the amendment, it was withdrawn from consideration in April of 2000. Finally, keep in mind that any limitation or change to the presidents power to grant pardons will require an amendment to the Constitution. And those, are hard to come by.