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understanding enterprise risk management
Early risk management started some thousand years ago which was practiced by Lebanese shippers. These shippers would share the profits and losses that would occur when they left ports in search of spices from the Far East through turbulent waters. Mostly ten ships would leave but only nine were likely to return with the other one maybe captured by pirates or even lost in a storm. They would thus share the loss of that one ship amongst the ten.
The contribution of Paccioli in 1494 was the most important advance that helped in understanding risk management than the Hindu-Arabic numbering system. This is because in the published book, Sums of
Arithmetic, Geometry, Proportion and Proportionality, Paccioli synthesized the concepts in arithmetic and algebra, accounting and also the probability that gave the tools for measuring the probability of an event occurring. The Hindu-Arabic numbering system, on the other hand, only brought the modern system of mathematics in the West.
In the example that Paccioli gave on dividing the winnings from an unfinished game, his main thinking was that the game was to be set up at a score of 60 that would win $1000. When a point came when one person had a score of 50 while the other had a score of 20 then the game would be halted and thus could not be finished. Paciolli explained that in sharing the money a total of 70 points would be used where one person would get 5/7ths while the other would get 2/7ths.
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eu construction market
EU construction market has been in a downturn for the past five years. The market has been adversely experienced by the 2008 global financial crisis and the Eurozone financial crisis. Despite the negative to zero growth of the EU construction market, early entry in foreign markets provides the opportunity for a firm seeking penetration of foreign markets opportunities to study markets. Innovation has been identified as key towards the increase in technical excellence and the reduction of costs. Furthermore, sustainability through low carbon footprint and green technology is of increasing importance in the industry. The knowledge will be guide the organization in curving out a suitable entry mode and market penetration strategies. This paper identifies starting a local office and a strategic alliance thereafter as the suitable mode of market entry. Further, it identifies that the focus on consumer satisfaction and local advantage are the key towards success within foreign markets.
According to Arch-vision (2013) the construction industry in the European Union is slowly improving from a negative growth position to zero growth in 2015 and positive growth thereafter. In the Raiffeisen Research (2013) report, the shrinking of the European construction market is as a result of the 2008 global financial crisis, which was followed by the Eurozone sovereign debt crisis.
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relationship between globalization and the environment
Globalization and the environment relate in one way, or another. Their relationship is however most of the time overlooked, but despite that it is critical to both globalization and environment. Most people may not see the relation between globalization and environment, but it is quite clear that they interact in some way.
First, the environment is inherently global because of the life-sustaining ecosystems and the watersheds that cross national boundaries. Also, there is the atmosphere that is shared among the two and air pollution which moves through the continents. It thus requires a coordinated global governance to monitor and respond to the frequent environmental issues.
According to (Cunningham, William and Mary p.46), the environment is somehow intrinsically linked to the economic development and it provides the natural resources that are necessary for the growth of ecosystems that underpin life. Globalization affects the environment in many ways that include; increase in income that created more resources for the protection of the environment. Also, globalization helps facilitate the emergence of improved new technologies and interactions that facilitate the exchange of useful environmental knowledge and the emergence of best practices.
Most literature only discusses the impacts globalization has on the environment, but it’s always important to note that as much as globalization impacts the environment, also the environment impacts globalization in terms of pace, direction and quality. Some examples of how the environment affects globalization include; the scarcity or/and abundance of natural resources incite the demand and supply forces in the global markets
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company treasury stock
Treasury stock which is sometimes referred to as reacquired stock is the stock the issuing company buys back in order to reduce the outstanding stock amount on the market. This usually happens when the issuing company decides to buy back shares from their investors when they believe that the stock price is too low for some reasons. The company can later sell its treasury stock at a value more than its cost that adds more money to the coffers and, as a result, increase the shareholders’ value. I hence strongly believe that sales from a company’s treasury stock are what they claim to be. This is because of the following impacts that it has to the company.
The impact on cash: when the issuing company sells its treasury stock, the difference between the initial purchasing price and the selling price is what the company gains. This helps in boosting the cash amount in the company’s balance sheet.
Impact on stockholder's equity: the stockholder's equity changes according to the difference between the sales and purchase prices. An increase benefits stockholders because this stakeholders’ equity shows a representation the accounting value of all stakeholders in that company. In most events, the stakeholders’ equity rises by the same margin as the rise in cash on the balance sheet.
Impact on the income statement: an increase or profit on the
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calculation of npv
Net Present Value (NPV) is a metric that shows the variation between the current value of cash outflows and inflows. NPV determines the profitability of a venture by showing the difference between costs and revenues. In investment budgeting, NPV metric is calculated by use of a formula or by the use of computer applications like excel and tables. The formula below is used to calculate NPV
Where, t is the periods of time, r is the rate of discount, Co the value of initial investment and Ct is the value of net cash inflows during the financial period (Guinan, 2009).
NPV calculation using excel is done using the formula PV (rate, cash flow1, cash flow2 cash flow n). The cell rate shows rate of interest while cash flow cells are an address for net cash flows at the end of each financial year.
Use of NPV calculations to managers
The NPV is used to analyze the profitability of investment. Investment managers make investment decisions based on the value of NPV. A positive value means the costs are less than the revenues, consequently a profitable venture. A negative value shows loss on investment since the venture will only be subtracting from the value. Investment managers thus choose to invest in ventures with a positive value. In case of multiple investment options, managers choose ventures with higher NPV values. On the other hand, a zero value of NPV shows no gain or loss upon