The Gulliver s Travels Essay Topics Diaries

The Gulliver 's Travels Essay Topics Diaries Most of rural people don't have a lot of understanding of tourism, and are misled by outside investors who aspire to take a lot of the financial benefits from rural location. Rural tourism is basically an activity which occurs in the rural places. As it will make employment in rural locations and will assist the inflow of funds from rural areas to urban places. The significant problem in rural areas is that there's not much scope for working. What Does Gulliver's Travels Essay Topics Mean? Keep contemplating the many different aspects of the story till it is possible to come up with a rather great insight for your Gulliver's travels essay. The essay isn't the simplest task to master. To compose a Gulliver's travels satire essay might not be extremely tough, since it's such a well-known story. More arguments you will discover in the next Gulliver's Travels essay. He takes pot-shots at all kinds of sacred cows. Gulliver has the capability to observe that guy, in other words, European civilized man, is not too different than the Yahoo. Gulliver, representing a typical man, encounters a wide assortment of. Get the Scoop on Gulliver's Travels Essay Topics Before You're Too Late Swift is satirizing the understanding of humanity by means of these travels. Travel is internal and external, and thus the story'' is absolutely free to concentrate on subtle shifts of inner awareness. Travelling provides the advantage of sightseeing and supplies Pleasure to the visitor. Traveling or seeing places is a significant portion of our education. It is the kind of activity, which almost all the people love. Travelling is the type of activity, which almost all the individuals love. Gulliver's Travels Essay Topics - the Conspiracy Swift want to see human nature ruled by reason for the large part (as the Houyhnhnms are), but using a minor essence of Yahoo traits too. He doesn't really give a proper description of the people of Brobdingnag. Unlike other enlighteners, he did not think that a person is kind by nature. Choosing Gulliver's Travels Essay Topics The writer may also enclose several geographic topics if they're closely connected with one another. When you're stressed, your thoughts obviously cannot be positive and optimistic. Quite frequently, the very best topic is one which you truly care about, but you also will need to get ready to research it. That w hich we're searching for in an argumentative essay topic is something that may expand people's minds and permit them to take a look at a topic in a new light. Gulliver's Travels Essay Topics Help! It's fine to play with time and produce your trip essay and essay travel! If you aren't sure, what a travel essay resembles, we have a couple of guidelines for you to follow. Travel essays could be written for different explanations. Writing a travel essay is straightforward. Gulliver's Travels Essay Topics - the Conspiracy For instance, in college, you might be requested to compose a paper from the opposing viewpoint. Together with the topics, you'd come across loads of papers free of charge. You've probably read a travel essay previously. A college travel essay has to be written in a crystal clear prose. Some men and women live their lives in accordance with their religion while some don't think you should factor that into decision making in regards to determining rules for e verybody. For others it's interesting to discover the way people of different cultures and mentality live. It's about sharing the attractiveness of a place that the majority of people aren't conscious of. In a location like this, where the temperatures can become very high, it is a necessity so that you're able to cool off. We're capable of moving round the globe within a limited time. There are some who travel for the interest of pleasure. Travelling isn't a panacea.

Real Options Analysis In Investments Finance Essay - Free Essay Example

Sample details Pages: 21 Words: 6186 Downloads: 2 Date added: 2017/06/26 Category Finance Essay Type Argumentative essay Did you like this example? Real options analysis is an innovative approach towards the evaluation of investment and financial decisions, investment appraisal, asset valuation and performance measurement. Furthermore Real option analysis facilitates us to incorporate our judgments on investments, operations and disinvestment. It is based on the perceptive that at least one of the value-determining variables is evolving unpredictability and following a random walk; however as that uncertainty unfolds our response would be flexible towards it. Don’t waste time! Our writers will create an original "Real Options Analysis In Investments Finance Essay" essay for you Create order Additionally Real option analysis is an improvement from the approach by which financial markets value an option on a stock or investment. It assists us in decision making regarding how much capital we should spend to achieve an economic opportunity and when we should commit ourselves to one of the accessible decisions. Nowadays Real option analysis is progressively more being used by companies to value their intangible assets. Research and Development (RD) is a recognized example of a real option, by virtue of what a company undertaking RD has the option to make a decision in regards whether developing or launching a new product, otherwise instead carrying out further RD in order to develop a conceivably secondary product. Since the main objective of my study is to focus on predictability of introducing or launching 3G technology or Universal Mobile Telecommunication System (UMTS), the literature review mainly spotlights on those models that are relevant and noteworthy to Research a nd Developments (RD). One might think that in todays time when it has already been almost a decade since the launch of 3G (UMTS) service, competitive investment real option models may be appropriate for valuation of introduction or adoption of 3G; however the choice of the model depends on the different circumstances. For instance in the case of Pakistan it is still required to consider RD model for valuation of introducing 3G, the reason being that competition among different mobile operator seems to be a secondary issue whereas the primary issue is whether mobile operators are willing to take the risk by purchasing the licence for 3G spectrum. When taking Pakistan into account 3G seems to be a risky investment because historical data shows that mobile operators could not gain enough revenues from data service (mobile internet) provided. In Pakistan most of the revenue is generated from voice calls. . Furthermore although the Pakistani government is seeking high-cash injections to deal with the countrys economic challenges, but at the same time the market is a very different proposition to India where mobile operators have currently invested multi billion dollars. The reason being that Pakistan does not seem to be a profitable mobile market at the present is due to many of the barriers to entry for 3G services (UMTS) such as lower levels of literacy, low GDP per capita, high fluctuations in currency, severe price pressure with respect to a dominant prepaid market, high taxes with regards to import of handsets and a frequently disorganized distribution network. Mobile operators in Pakistan have been arguing for a few years that Pakistan is not yet ready to make investment with respect to adoption or introduction of 3G services. Furthermore we can also refer to revenues raised from EDGE which can be thought of a downgraded version of 3G which is although slower but at the same time also up to 60% cheaper. Analysis show that investments made with respect to adop tion of EDGE was not a profitable strategy because in developing countries like Pakistan mobile internet is considered to be a luxury rather than a necessity. Therefore introducing 3G at this moment of crisis in Pakistan would be considered as a strategy of niche marketing which refers to serving to high end users. Although keeping in mind that 3G is a multibillion dollar investment, the mobile operators in Pakistan should definitely spend a few million dollars on RD to judge the profitability of the investment. Real RD options are anticipated processes in RD that assist researchers to attain flexibility in terms of timing, dedication, investment and research processes, which can be valued in terms of options. Real RD options have been practical in the field of biotechnology, energy, and the primary focus of my study telecommunication research. In the upcoming, real RD options may perhaps turn out to be incorporated with capital market prices, therefore as a result internal and e xternal market valuation using option theory will possibly turn out to be more consistent and occasionally functional in making RD capital allocation and other fundamental corporate finance decisions. Real RD options in general are opportunities that refer to attaining, developing or disposing of real assets associated to RD contained by an investment and operation cost determined in terms of present value that delivers benefits in the future. On the other hand, in contrast to financial options, real RD options are not until now frequently traded, and are often tricky to recognize, with lack of information, and thus may engage complicated valuation methods. By far, real RD option theory has been established to a broad range of elemental aspect of projects, that incorporates investment timings in monopoly and competitive environments, alternatives in RD budgets, sequential option activities, consequential investment opportunities, and flexibility in RD project development. 3.1 TYPES OF REAL RD OPTIONS: First of all, Margrabe exchange option is an example of simple real option that assumes that all new investments regarding product development are at the date when the option expires, that is assumed to be product launch date. Furthermore there are a number of alternative models for compound type real options; where initially there is RD expenditure, followed by new product development expenditure. Lint and Pennings (2001) explained that RD expenditure is analogous to a premium that is paid for a forward start option with timing determined by new product development management along with deterministic investment costs and future cash flows that are eventually uncertain, continuing in perpetuity. Additionally a compound options model has been offered by telecommunication practitioners, where there is a three stage life cycle, comprising of research, development and deployment. Moreover the compound option formula has been modified by Jensen and Warren (2001) by making use of bivaria te normal distribution. Apart from that, Martzoukas (2002) has illustrated that real option models should acknowledge the fact that management can and will add value through endogenous actions, which bear a resemblance to jump processes with upward although stochastic values. As well Bellah (2002) presented a model for explicit information cost of an RD project and on options relative to it since it was not understandable, if there was comprehensive information on cost of biotechnology RD. Finally Quigg (1993) provided an application or a real option model to assess and value speculative developments, in the circumstance where both investment cost and consequent product value are stochastic. 3.2 SIMPLE EXCHANGE OPTION (MARGRABE): It is extensively acknowledged that the traditional Net Present Value (NPV) method is inadequate to value real investment opportunities in an uncertain environment. Despite the fact that the exercise price is fixed and known in advance at the instant the option is purchased in a typical (vanilla) call option, such case is exceptional in a real options situation. As a consequence of following, the real option to invest in the future corresponds to an exchange option and not to a typical call option, due to its uncertain exercise price. An American exchange option gives its owner the right to exchange one asset for another at any time till the expiration/maturity of the option. Margrabe (1978) values a European exchange option which provides its owner with such an exchange right only at expiration/maturity of the option. Margrabe (1978) was the first who initially extended the standard Black and Scholes (1973) formula in order to value European options in scenarios where stock pri ce and exercise price are stochastic and follows a log-normal diffusion process (GBM). The Margrabe (exchange) Real Option formula makes the same assumptions as American perpetual options for European calls, which are listed below. First of all it assumes that an asset price follows Geometric Brownian Motion (GBM) with constant ÃÆ'Ã… ½Ãƒâ€šÃ‚ ´ and ÃÆ' Ãƒâ€ Ã¢â‚¬â„¢. Furthermore it assumes that short selling is allowed with full use of the proceeds. Likewise there are no transaction costs or taxes. Apart from that, all assets are perfectly divisible. Moreover there are no riskless arbitrage opportunities. Additionally asset trading is continuous and finally the risk free rate of interest and expected volatility are constant. However unlike assumptions made by American perpetual options for European calls, The Margrabe (exchange) Real Option assumes that there is an instantaneous constant correlation between the two stochastic processes. Furthermore this formula is independen t of the risk-free rate, in a risk neutral world, and the exchange volatility is the volatility of the spread. Margrabe developed an exchange option pricing model which is predominantly functional in pricing options for which exercise price is uncertain. Therefore this model is practical for those financial assets that allow the exchange of two assets (option to switch) where prices are stochastic at one pre-specified point in time. Margrabes model regarding the Exchange Options is not completely adequate because its European exchange option can only be exercised at maturity/Expiration. This characteristic of Margrabes European Exchange Option is impractical because a company that owns an option to invest can principally exercise that option at any time until maturity. In other words, the investment opportunities are generally American options. Additionally the Margrabe model can value American options only in the specific situation where the underlying asset does not offer divid ends. Due to this facts and limitations of Margrabe exchange model, it is restrictedly used to price real RD options in E-commerce and in pharmaceutical industry for those RD processes where the product launch is restricted to one point in time. However with reference to the main objective of my study that is to focus on predictability of introducing or launching 3G technology or Universal Mobile Telecommunication System (UMTS), where the product information can occur at any time rather than one pre-specified point in time, in such scenario the application of Margrabe exchange option seems to be less appropriate. 3.3 SEQUENTIAL DEVELOPMENT AND SEQUENTIAL INVESTMENT MODELS: Black and Scholes (1973) and Merton (1973) should be mentioned as originator of real option theory due to the fact that not all of their imaginary applications were with regards to traded assets. Brennan and Schwartz (1985) and McDonald and Siegel (1986) were the early developers of the theory that is consequently applied to RD along with exploration and development regarding natural resources. The model of sequential development stages makes the assumption that RD is single-sided, where RD is a requirement in advance before completion of the project. In addition, it also assumes that the project volatility is a deterministic function of RD expenditure that is reduced by the amount spent. The opportunity to make investments in stages or phases is a general attribute with respect to the numerous categories of investments. A few conventional examples of such investments refers to the launch of new products, RD in the field of pharmaceuticals, exploitation of natural resources for instance petroleum, and finally the enlargement of an industrial plant and real estate developments. The significant attribute of the sequential investment refers to the possibility of suspending or aborting the investment in the circumstance where the expected value of the complete project diminishes or otherwise if the cost to complete the investment amplifies. Additionally these investments take place in a continuing way in a timely manner only if the development of the product and market tests comes out to be favourable. Childs and Triantis (1999) observed RD investment decisions and project values, where two investments can be developed in a sequence. They build up closed-form solutions with the objective of valuating the investment program and they analyzed the optimal decision and features that tend to influence the alternative between a few sequential and parallel investments. Carr (1988) identifies a sequential or a compound option as an option where the asset received i s considered to be an another option where in contrast to a simple option the holder of the option obtains cash flows or shares from an investment project upon the exercise of the option. Conversely, Geske (1979) has a different opinion on the definition of sequential options. He stipulates that a compound option exists on every occasion when the subsequently opportunities are available only in the circumstance where the previously opportunities are undertaken. Many researches emphasize that the real world investments are time and again sequential in nature which refers to the fact that investments take place in phases and that firms management has the opportunity to react to changing state of affairs and the arrival of latest information. Furthermore Lint and Pennings (2001) lay emphasis on the fact that sequential investment is not at all standardised and as a result there is not one single model capable of fitting all kinds of staged investment opportunities. Although the standar d assumption of sequential investment model is that volatilities tend to be constant throughout entire investment stages. However in contrast a bigger strand of models make assumption that the uncertainty bounded within the investment opportunities is diminished with the frame of time which is motivated by the development of those models that takes into account different volatilities for several phase of investment. Geske (1979) was the first to suggest the valuation a compound option where the call option on a stock was valued in a similar way as call option on firms asset. As for real options, the sequential option bear a resemblance to a variation of compound option known as instalment option where the price of option is paid sequentially over time in instalments. Furthermore, on one hand where the Geske (1979) model requires the total discounted present value of future cash flow to be stochastic, on the contrary Bar-Ilan and Strange (1998) takes a somewhat different approach as their model is expressed in terms of annual project revenues or in terms of output prices net of variable cost which are assumed to follow a GBM. However the main limitation of the model is that it only allows for two phases of sequential investment. Majd and Pindyck (1987) tend to overcome this limitation in their model. Their analysis is concerned with a contingent plan for making irreversible and sequential expenditures therefore the management can decide upon the completion of each stage whether or not to incur cost for the subsequent stage or whether deferral is optimal in the present. According to their model, the firm makes investment continuously until the completion of the project. Also their analysis can be extended by taking into account the information cost that would be incurred regarding the study of decision whether suspending or starting the investment in the above models. Roberts and Weitzman (1981) emphasizes the role of gathering information in sequential inves tment. They were traditionally the first to develop a model in which uncertainty decreases with investment expenditures. In this kind of investments, early phases propose information about net payoff and costs to be incurred in later stages. Summing up, although the dynamic sequential investment models are on average based on more practical hypothesis, it is frequently complicated in practice to predict how precisely uncertainty decreases with expenditure all the way through different phases of investment. On the contrary, static sequential investment models are characteristically more appropriate in consideration to dynamic models. 3.4 SEQUENTIAL EXCHANGE OPTION MODEL: The sequential exchange option model is a more practical classification of RD options in comparison to standard American or European exchange option model in the circumstance where RD projects take the form of phases of research or sequential investment opportunities. Roberts and Weitzman (1981) represented the benefits of terminal RD being a geometric Brownian motion process where the primary concern was an optimal stopping limitation. Furthermore Weitzman et al. (1981) also made same assumptions except for the fact that costs were assumed to be stochastic along with reducing process volatility over time. Carr (1988) model integrates and build up collectively on the essentials of both Geske (1979) compound option and the Margrabe exchange option for the purpose of valuation of European sequential exchange options. As a result the model obtained is a combination of an exchange option that refers to operating option and a time-to-build option that corresponds to growth option. Ad ditionally Carr (1988) also illustrates estimation for an American sequential exchange option. The valuation of sequential exchange option provided by Carr (1988) has been indirectly applied in Childs et al. (1998), Taudes (1997) and by Bar-Ilan and strange (1998) towards the formulation of real RD options. Moreover Lee and Paxon (2000b) based their foundation on the model which was proposed by Carr (1988) in order to present another model for the valuation of a sequential pseudo-American exchange option and are also able to demonstrate that their analytic approximation generates more precise results than Carr (1988). The analytic approximation proposed by Lee and Paxon (2000b) takes into consideration a two-phased investment process. Despite the fact that the initial expenditure only takes place after a specified span of time, the firm can consequently take decision regarding the product launch and pay the cost of implementation at any point in time until the expiration of excha nge option. As a consequence, Lee and Paxon (2000b) tends to present a more practical structure for several investment related opportunities in comparison to Carr (1998) method for the valuation of European sequential exchange option. Lee and Paxson (2000b) method seems to be more suitable and well-organized as compared to Carr (1998) due to the fact that it can be learned from the past that almost all the mobile operators have initially postponed their first announcement regarding the launch of UMTS and in such a scenario Lee and Paxson (2000b) approach plays an important role by providing flexibility to the firm with regards to launch of the project within a certain period of time. There are a number of ordinary solutions for American sequential exchange options where the underlying asset refers to perpetuity, which can observed in Dixit and Pindyck (1994), furthermore in replacement investments in Mauer and Ott (1995), and finally when concerning sequential investments in Chil ds, Ott, and Triantis (1998). Additionally by means of related assumptions, Bar-Ilan and Strange (1998) demonstrated closed-form solutions in order to attain optimal sequential investments in both the circumstances referring to, with and without suspension of operations and investments, and additionally with regards to costly suspension. Despite the fact that there are no closed-form solutions for those American exchange options when dividends are taken into account, however several substitute analytic approximations have been anticipated. By utilizing the two-point Richardson extrapolation, Carr (1988) proposed an analytic approximation for an American exchange option, which is imitated by a portfolio consisting of two European Margrabe exchange options along with one European compound exchange option. Moreover Bjerksund and Stensland (1993) suggested a closed-form solution for an American exchange option through transformation of their vanilla American call option approximation . Finally, Lee and Paxson (2001, 2003) estimated American option models that are extended in context to a sequential exchange, given for exercise of option at optimal times after the completion of required interim expenditure. Schwartz and Moon (2000a) proposed a numerical solution for multiple sequential exchange options that refers to exchange model which comprises of more than two stages. In the same way to Majd and Pindyck (1987) they allowed for highest rate of expenditure along with the authority to take decision after completion of each phase whether it would be optimal to incur subsequent phases expenditure or otherwise it would be better to wait. However in contrast to Majd and Pindyck (1987), the model proposed by Schwartz and Moon (2000a) not only provide for stochastic present values for projects future cash flows but also for stochastic total investment cost. 3.5 PREEMPTION MODELS: Most of the earlier Real option models give an idea about the importance of deferring sunk cost expenditures which considers the fact that what is gained by waiting to invest. On the contrary, Kulatilaka and Perotti (1992, 1998) consider the fact that what is lost by waiting to invest. When taking a competitive market into account, early investments may give benefit of a greater market share which refers to pre-emption along with incentives of early cash flows. Dixit and Pindyck (1994) suggest a pre-emption model that lays its foundation on the model that developed earlier on by Fudenberg and Tirole (1985) and Smets (1993) which takes into account an oligopolistic industry. Furthermore Williams (1995) explains several characteristics of real options which differentiate them from financial options and some of these properties are also incorporated by pre-emption models. The first property of real options in contrast to financial options is concerned with downward sloping demand c urve which refers to the fact when real options are exercised, they tend to increase the aggregate supply of developed assets and in this manner the equilibrium price of each unit of output is reduced. The second property is concerned with the aggregate constraint in term of rate of exercise which refers to the fact that when the developers deal with either increasing costs or limited capacity, the development costs ultimately depends on the demand for development. Furthermore the third property relates to limited supply of real options which according to which the supply of underdeveloped assets can be possibly constrained with the supply of developed assets which seems to essential specifically when taking real options into account. Additionally the fourth property relates to monopolistic or oligopolistic exercise according to which investments made by competitors tend to decrease the value of companys own investment opportunities. Finally we consider the property of real options regarding portfolio effects where with respect to monopolistic or oligopolistic situations, the exercise of individual real option is able to have pessimistic influence on the value of other options enclosed in companys portfolio. As already mentioned above the previous models with proprietary assumptions that were taken into account were not well suited to incorporate the following properties of real options, however the pre-emption models incorporate at least a few of these characteristics. Apart from that the study aims to focus on the impact of competitive behaviour with respect to value of an investment opportunity. The primary initiative is that once a competitor has already entered the market, the option to enter the market becomes less valuable for other competitors. The following piece of evidence makes pre-emption which refers to prior entrance into market compare to other competitors, more attractive. According to Paxson (2003), although entering first in the market ha s several incentives but at the same time a competitor can also play an opposite strategy by waiting and learning from leaders mistakes before entering the market. Lambrecht and Perraudin (1997) further extended the standard models that incorporate irreversible investment by means of including strategic entry by competing firms. Additionally Lambrecht (2000) also modelled competitive RD phases, where in the first phase there is a trade-off between the cost of being pre-empted and the value that arise as a consequence of waiting to invest. In the second phase sleeping patents inventions are taken into consideration which may not be instantaneously put into use. 3.5.1 FIRST MOVER ADVANTAGES: In this section the main focus of the study is to spotlight the significance of strategic consideration. The particular focus is on the advantage of being first to enter the market prior to other competitors along with quantifying the outcome of such an advantage on valuation of investment and exercise policies. I will specifically refer to the model that has been explained in Paxson and Pinto (2003) in relation to magnitude of first movers advantages or the degree of pre-emption to completely parameterized, which enables to measure their effects on decision to enter along with game equilibria. Paxson and Pinto (2003) takes into account two competing firms in the scenario of uncertain profitability which have option to enter the market where the option to enter the market is a kind of American call option that incorporates an exercise price equivalent to the investment cost along with underlying security that is considered as the net profitability formulated from operating in the m arket. Conversely, exercising the option by one firm in order to enter the market has consequences on the option value of both the competing firms. Under the scenario of this model, leader who is supposed to be the first to enter the market has to sink the investment cost earlier but at the same time leader also has an incentive by means of securing a greater market share in comparison to the competitor. An attractive element of this models framework is that it acknowledges the opportunity that the first-mover advantages can either be temporary or permanent. Furthermore according to Paxson and Pinto (2003) model, the other competitor (follower) can take the decision when it would be optimal to sink the investment cost in order to claim lower market share than that of the leader. When the follower makes the decision to enter the market the underlying game comes to an end which results in a duopoly market structure where sharing the market by leader and follower seems to be a preci se function of the magnitude of pre-emption factor. After the value functions and market share of leader and follower are determined then the consequence of the magnitude of first-movers advantage can be assessed. The most important implication is that first movers advantage guarantees a higher market share for the leader along with optimal rival entry according to which leader has the incentive of monopoly in the market till the entrance of follower. The model illustrated by Paxson and Pinto (2003) is based on the work provided by Smets (1993) in relation to foreign direct investment and the following implementation of Smets (1993) model by Grenadier (1996) in the context of real estate market. Paxson and Pinto (2003) model acknowledges the likelihood of both simultaneous and sequential exercise equilibria likewise Smets (1993) and Grenadier (1996) depending on preliminary circumstances and degree of first movers advantages. Additionally Paxson and Pinto (2003) model is enhanced an d can acknowledge their consequence on value function much better in comparison to other two models discussed above. Above all unlike Smets (1993) and Grenadier (1996) the model ensures that first movers advantage is permanent as leader will retain a higher proportion of market share ever after the entry of follower. As discusses above Grenadier (1996) formulates a pre-emption duopoly model which is based on work of Smets (1993). Nonetheless his model assumes that firms are already competing in an existing market where the new investment opportunity boosts the profitability of the firm. However according to this model the first movers advantage is temporary since both the firms will equally share the market after the follower has entered and completed its investment. Followed by Grenadier (1996), Pawlina and Kort (2002) demonstrated a similar model making the assumption that two firms already competing in an existing market where the new investment opportunity boosts the profitab ility of the firm, while diminishing the profitability of competitor. In contrast to previous model, this model does not assume that two firms are identical by providing one of the firms an incentive in terms of lower investment cost. However also according to this model the first movers advantage remains temporary. Similarly dixit and Pindyck (1994) illustrated a simplified duopoly model by implementing Smets (1991) approach. Also according to this model the first movers advantage remains temporary as the leader only receives the full market revenues until the entrance of follower. Furthermore Boyer and Clamens (2001) explain a duopoly model of pre-emption by means of multiple investments along with Bertrand competition. Mason and Weeds (2000) demonstrated the implementation of technology when there is first movers advantage of being the first adopter. Other academic literature with reference to pre-emption model and first movers advantage includes Williams (1993), Leahy (1993) and Fries et al. (1997) which take into account real investment decisions in perfectly competitive industry equilibrium. Apart from that Tsekrekos (2003) derived model based on Smets (1991) and Grenadier (1996) which has similar views to that of Paxson and Pinto (2003) according to which the first movers advantage is permanent as leader will retain a higher proportion of market share ever after the entry of follower. Additionally with respect to possible equilibria it is revealed that both simultaneous and sequential equilibria can result. Finally in their article THIRD GENERATION MOBILE GAMES- An application of real competition games, Paxson and Pinto (2004) formulated analytical solutions with respect to the leader and follower options to invest in the market along with quantitative explanation for the optimal investment timing of the leader. The main objective of demonstrating the model was to determine the optimal timing for a mobile company to make investment with respect to a major technological change such as 3G. The reason why this real option model is appropriate for analyzing telecommunication mobile market is because first of all it is a competitive sector which implies that there is a natural application for game theory models and moreover it a considered to be a license race market. The models which has been demonstrated by Paxson and Pinto (2004) were actually developed in Paxson and Pinto (2003-a) where two firms are bearing in mind the option in order to enter a new market. The firm that would be the first to enter the market would be defined as the leader from now onwards and will get hold of a first mover advantages in terms of a higher share of the market as compare to a follower that would be second firm or in other words the competitor to enter the market. The roles of the leader and the follower are characterized endogenously in the opinion obtained from Fudenberg and Tirole (1985) where the two firms are supposed to be symmetric al ex- ante however they tend to be asymmetrical ex-post. Above all the leader will always be having a competitive advantage over the follower in terms of first mover advantages, therefore with respect to the upshot each of the firm will want to acquire the position of the leader, which generates a pre-emption effect. These models formulated by Paxson and Pinto (2004) best suits the circumstance of a duopoly environment where the first firm to enter the market is considered as a leader and the second firm or the competitor is considered to be a follower and therefore are most suitable for the purpose of my research which refers to introduction of 3G (UMTS) technology in Pakistans mobile telecommunication market. 3.7 GENERAL OPINIONS ON REAL RD OPTION MODELS: Traditionally capital investment appraisal technique such as Net Present Value (NPV) and Discounted Cash Flow (DCF) approach were used to evaluate investment opportunities however they were imprecise since it is not straightforward to estimate the risk adjusted discount rates appropriate for cash flows when they arise from expansion, abandonment, deferral and other options. Therefore the real option analysis is a better approach as it is able to account for the controllability of cash flows through the management of firms. Although the Black-Scholes model is widely accepted for the valuation of stock options, its applicability to RD projects is questionable. Ross (1991) recommended using the Black-Scholes formula in order to analyse RD projects, however this method created some problems. For instance, Newton and Pearson (1994) explained the complications with evaluating the volatility of an RD investment project and in addition Trigeoris (1993) discussed the inconvenience of real o ption valuation using a risk-free rate of return. Margrabe developed an exchange option pricing model which is predominantly functional in pricing options for which exercise price is uncertain. Therefore this model is practical for those financial assets that allow the exchange of two assets (option to switch) where prices are stochastic at one pre-specified point in time. However with reference to the main objective of my study that is to focus on predictability of introducing or commercializing 3G technology or Universal Mobile Telecommunication System (UMTS), where the product information can occur at any time rather than one pre-specified point in time, in such scenario the application of Margrabe exchange option seems to be less appropriate. Carr (1988) identifies a sequential or a compound option as an option where the asset received is considered to be an another option where in contrast to a simple option the holder of the option obtains cash flows or shares from an in vestment project upon the exercise of the option. The significant attribute of the sequential investment refers to the possibility of suspending or aborting the investment in the circumstance where the expected value of the complete project diminishes or otherwise if the cost to complete the investment amplifies. Summing up, although the dynamic sequential investment models are on average based on more practical hypothesis, it is frequently complicated in practice to predict how precisely uncertainty decreases with expenditure all the way through different phases of investment. On the contrary, static sequential investment models are characteristically more appropriate in consideration to dynamic models. The sequential exchange option model is a more practical classification of RD options in comparison to standard American or European exchange option model in the circumstance where RD projects take the form of phases of research or sequential investment opportunities. Therefore, Lee and Paxson (2000b) model which is a classification of sequential exchange model seems to be more suitable and well-organized with respect to my study where the main objective of the study is to focus on ROV for introducing or adopting 3G technology or Universal Mobile Telecommunication System (UMTS). The primary reason being that it can be learned from the past that almost all the mobile operators have initially postponed their first announcement regarding the launch of UMTS and in such a scenario Lee and Paxson (2000b) approach plays an important role by providing flexibility to the firm with regards to launch of the project within a certain period of time. In addition, when taking a developing country like Pakistan into account then a sequential option seems to be appropriate because mobile operators over there will prefer to make a tremendous multibillion dollar investments in phases that is involved in adoption of 3G services since it is a risky investment and keeping the de mographics in mind, it is obvious that currently in Pakistan 3G gives a view of luxury rather than a necessity. When taking a competitive market into account, early investments may give benefit of a greater market share which refers to pre-emption along with incentives of early cash flows. In pre-emption models the particular focus is on the advantage of being first to enter the market prior to other competitors along with quantifying the outcome of such an advantage on valuation of investment and exercise policies. Particularly Paxson and Pinto (2003) model which is among the classification of pre-emption models takes into account two competing firms in the scenario of uncertain profitability which have option to enter the market where the option to enter the market is a kind of American call option that incorporates an exercise price equivalent to the investment cost along with underlying security that is considered as the net profitability formulated from operating in the mark et. When relating to the main objective of the study which focuses on ROV for introducing or adopting 3G technology or Universal Mobile Telecommunication System (UMTS), Paxson and Pinto (2003) seems to be a precise and suitable model for determining the optimal timing for entering the market of both the leader and the follower. Furthermore Paxson and Pinto (2004) formulated analytical solutions with respect to the leader and follower options to invest in the market along with quantitative explanation for the optimal investment timing of the leader. These models formulated by Paxson and Pinto (2004) best suits the circumstance of a duopoly environment where the first firm to enter the market is considered as a leader and the second firm or the competitor is considered to be a follower and therefore are most suitable for the purpose of my research which refers to commercialization of 3G (UMTS) technology in Pakistans mobile telecommunication market. This model proposed by Paxson an d Pinto (2004) belongs to the class of pre-emption models. However, like sequential models they take the strategic consequences on the worth of an investment opportunity into consideration that tends to result from the competitors behaviour. Summing up Paxson (2002a) emphasizes that there is no single best model which can completely capture all the requirements due to the fact that each investment decision is subject to different assumptions and constraint. However, different models have a mixture of advantages and limitations over other models and deciding which model would be optimal to use depends on Parameters embedded in the model along with the state of affairs and the circumstances to be captured by the model. Keeping in mind that different models can fit certain investment situations better or worse, in my opinion the two models illustrated by Paxson and Pinto (2004) seems to be most appropriate than the models demonstrated by other authors with respect to my study on com mercialization of 3g technology and are perhaps more realistic than other models in relation to the proposition of permanent first mover advantages.

What Would It Entail - 1221 Words

Introduction: Imagine a world without moral responsibility. What would it entail? Without moral responsibility, legal systems today would necessarily undergo a dramatic revision. I have not a clue what they might result to. With constituents not being morally responsible for their actions, criminal acts become easily defensible. For the subject, he/she was not â€Å"free† at the time of the act, for one can only be morally responsible for an act if one was free and consciously willed the act ( ). Rape, theft, cheating, murder and torture thus become acceptable acts. A world without moral responsibility would imply more evil, more chaos, more social distrust of others, and more less-social beings†¦Imagine this world. Moral responsibility, then, matters for the sake of society and its people. It does though, as we see, presuppose one thing—a concept termed as free will. In the words of some philosophers, free will is a precondition for moral responsibility, but as a â€Å"thingà ¢â‚¬  in itself, is hard to define ( ). I will only attempt to provide a working definition for the concept of free will to operate on in this paper, for we can agree that 1) moral responsibility matters in society and 2) moral responsibility presupposes that subjects are free at the time of their action, and willed it. But since the 80s, neuroscientists have claimed free will is a nonexistent, illusory thing. Brain experiments measuring neural activity that precedes voluntary conscious action suggest that ourShow MoreRelatedNepotism Should Be Defined As An Immoral Practice1372 Words   |  6 Pagesegalitarian society because it entails rewarding those who have not earned it, indirectly punishing those who have worked hard, and mitigating the efficiency of organizations. Nepotism should be defined as an immoral practice because it entails rewarding those who have not earned it. Clearly, nepotism rewards the relatives of those with professional power without these relativ es having to earn it. In fact, the very core of the accepted denotative definition of nepotism entails the notion of givingRead MoreAtheism, Nihilism, And Nihilism1625 Words   |  7 PagesI believe atheism, and nihilism do have certain things in common, but Atheism does not necessarily entail nihilism. There is more than one type of nihilism found in society, and even though Nihilism may entail Atheism. but they are both different. Looking closer at the definition of Nihilism and Atheism I found the main difference in definition between the two which will later be explained in detail. There are many types of beliefs that could could be consider Nihilism, but only two that expressRead MoreAspects of Research793 Words   |  4 PagesINTRODUCTION Understanding what research is in the first place aids in the knowing what its key aspects are. 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A Leader s Framework For Decision Making - 857 Words

In the article titled, â€Å"A leader’s framework for decision making†, the authors David Snowden and Mary E. Boone discuss the poor policy decisions at the governmental level and the challenges facing uncompetitive local firms. The article explains how managers rely on common leadership approaches that work well in one set of circumstances but fall short of others. In the complex environment of the current business world, leaders often will be called upon to act against their instincts. They will need to know when to share power and when to wield it alone, when to look to the wisdom of the group and when to take their own counsel. A deep understanding of context, the ability to embrace complexity and paradox, and a willingness to flexibly change leadership style will be required for leaders who want to make things happen in a time of increasing uncertainty (Snowden Boone, 2007). Analysis David J. Snowden is the founder and chief scientific officer of Cognitive Edge, an international research network. He is based primarily in Lockeridge, England. Snowden holds an MBA from Middlesex University, and a BA in Philosophy from Lancaster University; and started his working career with Data Sciences Ltd (formerly Thorn EMI software), acquired by IBM in 1996. He was the Director of IBM s Institute for Knowledge Management and the founder of the Cynefin Center for Organizational Complexity. During this time, Snowden developed the Cynefin framework, a practical application of complexityShow MoreRelatedA Leader s Framework For Decision Making Essay1180 Words   |  5 PagesIntroduction Traditional methods for Leadership employ simplifications to the circumstances and situations a leader faces. It assumes a deterministic knowable world, and prescribes predictable responses that will help address problems a leader faces. 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Mr. S reports into the Chief Information Officer in the corporate head office of Organisation C is a multinational data company, specialising in Real Estate data, based in Irvine

Enterprise An Entrepreneur Who Demonstrates Passion,...

DEFINATION OF ENTERPRISE: Enterprise is the way to undertake a start-up business along with risks to develop and organise a business to turn into profitability in a competitive market. It is the journey towards the innovation and to explore the opportunities to create and run a successful business to withstand in a competitive market. ENTREPRENEURSHIP: Entrepreneurship is a state of mind whereas innovation is the prerequisite of it. An entrepreneur discovers and exploits opportunities, takes risks beyond capabilities, uses intuition explores new businesses. Basically a creator who entities and pushes an idea through towards reality as well as initiates drives the company with decisive strategies for the new frontier. The main purpose of conducting this interview is to introduce Mr. Sai Kiran Gunda who is promising new entrepreneur who demonstrates passion, commitment, technical skills and dedication to social development. KEY FACTORS OF ENTREPRENUER: Entrepreneur plays a vital role in the market, for a successful business entrepreneur one should have basic values perceptions. The following are the qualities or factors leading an entrepreneur to a successful journey in the business ï  ¶ Leadership: The first and the foremost factor should have to an entrepreneur, many entrepreneurs can produce the ideas but few of them will turn into actions, leadership is taking an opportunity and turningShow MoreRelatedUnderstanding a Virgin: Richard Branson4092 Words   |  17 Pagesthe remarkable life and achievements of Richard Branson (Branson). Second, to impart to the reader several key traits and behaviors that permitted Branson’s entrepreneurial success. In short, through this case study, one learns about a great entrepreneur. 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Many simply equate it with starting one’s own business. Most economists believe it is more than that. To some economists, the entrepreneur is one who is willing to bear the risk of a new venture if there is a significant chance for profit. Others emphasize the entrepreneur’s role as an innovator who markets his innovation. Still other economists say that entrepreneurs develop new goods or processes that the market demands and are not currently being supplied. 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Thousands of independent workers are organized to produce consistently a very high quality product, on a complex decentralized basis through a system of organization that is unique. The company not only uses traditional weavers but also teaches, in remarkably short time, the craft to people who do notRead MoreCorporate Social Responsibility15903 Words   |  64 Pagesactivities. Socially responsible companies consider the full scope of their impact on communities and the environment when making decisions, balancing the needs of stakeholder with their need to make profit. A company’s stakeholders are all those who are influenced by and can influence a company’s decisions and action, both locally and globally. 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Sales guys over promised, but technical delivery cannot meet client expectations (this also goes along with poor requirements) 3. Poor/weak project managers/teams who do not communicate well and do not take ownership of the issues. The projects I have seen fail all had these three issues in some shape or another. As PMs, I think our main

Ethics In Business Essay Example For Students

Ethics In Business Essay Ethics in BusinessFrom a business perspective, working under government contracts can be a very lucrative proposition. In general, a stream of orders keep coming in, revenue increases and the company grows in the aggregate. The obvious downfalls to working in this manner is both higher quality expected as well as the extensive research and documentation required for government contracts. If a part fails to perform correctly it can cause minor glitches as well as problems that can carry serious repercussions, such as in the National Semiconductor case. When both the culpable component and company are found, the question arises of how extensive these repercussions should be. Is the company as an entity liable or do you look into individual employees within that company? From an ethical perspective one would have to look at the mitigating factors of both the employees and their superiors along with the role of others in the failure of these components. Next you would have to analyze the final ruling from a corporate perspective and then we must examine the macro issue of corporate responsibility in order to attempt to find a resolution for cases like these. The first mitigating factor involved in the National Semiconductor case is the uncertainty, on the part of the employees, on the duties that they were assigned. It is plausible that during the testing procedure, an employee couldnt distinguish which parts they were to test under government standards and commercial standards. In some cases they might have even been misinformed on the final consumers of the products that they tested. In fact, ignorance on the part of the employees would fully excuse them from any moral responsibility for any damage that may result from their work. Whether it is decided that an employees is fully excused, or is given some moral responsibility, would have to be looked at on an individual basis. The second mitigating factor is the duress or threats that an employee might suffer if they do not follow through with their assignment. After the bogus testing was completed in the National Semiconductor labs, the documentation department also had to falsify documents stating that the parts had surpassed the governmental testing standards. From a legal and ethical standpoint, both the testers and the writers of the reports were merely acting as agents on direct orders from a superior. This was also the case when the plant in Singapore refused to falsify the documents and were later falsified by the employees at the have California plant before being submitted to the approval committees (Velazquez, 53). The writers of the reports were well aware of the situation yet they acted in this manner on the instruction of a supervisor. Acting in an ethical manner becomes a secondary priority in this type of environment. As stated by Alan Reder, . . . if they the employees feel they will suffe r retribution, if they report a problem, they arent too likely to open their mouths. (113). The workers knew that if the reports were not falsified they would come under questioning and perhaps their employment would go into jeopardy. Although working under these conditions does not fully excuse an employees from moral fault, it does start the divulging process for determining the order of the chain of command of superiors and it helps to narrow down the person or department that issued the original request for the unethical acts. The third mitigating factor is one that perhaps encompasses the majority of the employees in the National Semiconductor case. We have to balance the direct involvement that each employee had with the defective parts. Thus, it has to be made clear that many of the employees did not have a direct duty with the testing departments or with the parts that eventually failed. Even employees, or sub-contractors, that were directly involved with the production were not aware of the incompetence on the part of the testing department. For example, the electrical engineer that designed the defective computer chip could act in good faith that it would be tested to ensure that it did indeed meet the required government endurance tests. Also, for the employees that handled the part after the testing process, they were dealing with what they believed to be a component that met every governmental standard. If it was not tested properly, and did eventually fail, isnt the testing department more morall y responsible than the designer or the assembly line worker that was in charge of installing the chip? Plus, in large corporations there may be several testing departments and is some cases one may be held more responsible than another depending on their involvement. A process like this can serve the dual purpose of finding irresponsible employees as well as those that are morally excused. Essay about Comparsion of TV Shows Family Guy and South Park EssayTo conclude, I must say that I agree with the use of mitigating factors in determining moral responsibility. A company, as defined by law, is only a name on a piece of paper. The company acts and conducts itself according to the employees that work in that entity. I use the word employee because in ethical thinking there should be no distinction of rank within a company. There are times when executives can be held directly responsible and at the same time, there are cases where employees are acting unethically without the executives knowing. Neither title of executive or employee equates to moral perfection. Therefore, when a company has acted irresponsibly, its employees must be held liable in a proportionate amount. As for the future of ethics in business I would speculate that if employees started to think more in long term benefits and profits, many of the ethical dilemmas that we face today would be greatly redu ced. As mentioned before, businesses today uses the measuring stick of profitability. There needs to be a shift to the thinking of total utility for the social community in order to weigh business decisions. Opponents would argue that this is a long term plan that require too many radical changes in the face of business. Also, there is no way that an industry wide standard can be set since there are too many types of corporations. Plus, companies have different needs and every moral rule is subjective according to the type of business that everyone conducts. In response, I would argue that although there are no industry standards that are feasible, it is possible for every company to examine their practices as well as the attitude of their employees. There will be companies that find that they are doing fine with employees that are aware of their moral values. Yet other companies will find that they do have areas that need improvement. It is steps like these that start implementing changes. Once a few companies start to see the benefits of changes, it can help to encourage other companies to follow suit. After all, as seen in the case of National Semiconductor, mistakes in one department can cause the deterioration of an entire corporation. When the costs that are possible are taken into account, the changes required to rectify this are small in comparison.

Compensation and Benefits for Salaries and Wages -myassignmenthelp

Question: Discuss about theCompensation and Benefits for Salaries and Wages. Answer: Introduction In exchange of employment, an employee receives benefits, salaries and wages from the firm which refers to compensation. It may include annual salary, bonus, or hourly wages and benefits like health care coverage, insurance, retirement savings, etc. Individual firm has their own components and payroll system. In a professional carrier, working for a company like Tim Hortons, an employee requires getting indirect benefits from the firm which helps employees get attracted towards the firm along with holding them towards it. Tim Hortons is an organisation which deals with chain of restaurants in more than nine countries that requires an incessant group of working people. This report will discuss three important indirect benefits an employer can offer to keep up with its employees(HrCouncil.ca). Compensation And Benefits Bonuses and Raises: The management system that deal with employees performance management generally plans the percentage of raises and amount of bonuses to be distributed among employees based upon employees ratings and performance. For example, employees with outstanding performance could receive a direct raise in salary of six percent and gradually decreasing for incompetent employees. Similarly bonus can be given after calculating the percentile of gross salary of employees or by dividing the pool of stock contributed to organisational success. In many companies the incentives are kept for development of bottom line and incrementing public share value(Mayhew, 2018). Retirement benefits: This scheme would attract the employees as under retirement benefit plans, the employers provide employees with income when they are no longer able to work. This plan guarantees payment after retirement. Pension is another way in which an amount of salary is accumulated for stipulated time period w hich is calculated after combining employees service years, salary and age. In many countries there are registered saving plans that provide exemptions from taxes which again help in saving money(Mayhew, 2018). Group Health Benefits: This is one way in which the employees are provided with health care benefits. Under this plan, employers pay an amount of portion from the monthly premium plans, leaving the rest amount to be deducted from employees pay. From health plans sponsored by employers, the premium deducted gets exemptions under pre-tax schemes. Heath coverage relives the employees from health coverage expense like dental, vision, accidents etc. Many employers provide employees with short term disability insurance and as a part of employees compensation offers long term disability coverage that again makes employees less worried about ill upcoming(Merhar, 2016) Effects Of Benefits And Compensation For any company to keep a hold of highly qualified staff is the most challenging job. Therefore compensation and benefits, although costly, helps in maintaining organisational success by attracting employees and infusing loyalty among them. Employers dealing in traditional ways of providing employees with limited programmes find difficulties in retaining its staff to the organisation. By improvising additional benefits and compensation, the productivity may get increased as employees get less worried about themselves and their family. Bonuses and yearly increments make employees work more. Employees get a piece of mind as their future is secured and thus seems more satisfied with their work environment which increases work effectiveness. Insurance schemes and retirement plans avoids them switching over companies along with feeling a sense of pride over their employers for taking care of their health and future(Mazurek). References HrCouncil.ca. (n.d.). Compensation Benefits. Retrieved from https://hrcouncil.ca/hr-toolkit/compensation-employee.cfm Mayhew, R. (2018). Example of an Employee Compensation Plan. Retrieved from https://smallbusiness.chron.com/example-employee-compensation-plan-10068.html Mazurek, S. (n.d.). Employee Benefits and Compensation . Retrieved from https://managementhelp.org/payandbenefits/index.htm Merhar, C. (2016). Examples of Common Small Business Employee Benefits. Retrieved from https://www.peoplekeep.com/blog/examples-of-common-small-business-employee-benefits