How the threat of an imminent fiscal cliff is directly related to Research Paper

How the threat of an imminent fiscal cliff is directly related to income inequality - Research Paper Example The whole problem was triggered by the quarrel over tax cuts for the wealthiest 1% percentage of Americans. It can be argued that the prospects of the future global economy depends much on the debate circling to distribution of income or equality among all sections of the society. The republicans support the tax cuts on the argument of the role played by income in the development of incentives. They argue that the role of the government is not ecstatic in managing the money of the tax payers. They put the example of the CEO who may feel the disincentive on working harder if the government levies a tax of 10% more on his income. The Republicans states the money that is paid by the tax payers can be more efficiently invested in profitable investments instead of wasting the amount in the inefficient programs of the government. Research question How the threat of an imminent fiscal cliff is directly related to income inequality? Literature Review The law makers of the country are facing three unattractive options. They can keep the policy on hold till the beginning of next year. With the implementation of the policy the spending rates are anticipated to go down and therefore the economy will again be on the verge of inflation. Again the deficit of the current balance is anticipated to fall as well. They can opt for the middle course which would address the issues of the budget to a certain extent and will also have modest impact on the rate of growth. Two dimensions can be put forwarded regarding the inefficiency of the government. The spending in the public sector cannot be identified as waste because some of the expenditures roll out to the private sector as well. In some cases the roll is large enough. Moreover some profitable investments can only be done by the government. An individual cannot be held responsible for his resources and the same individual can be held responsible for the choices he makes. It is undoubted that the policy maker will opt for the pro grams that bring equalization in the society rather than increase the taxes for the wealthiest population. The term economic inequality is used to define the gap between the rich and the poor. The disparities in distribution of the economic assets among individuals or groups of population are regarded as economic inequality (World Bank, 2005, p. 27-28). There are many causes for economic inequality and primary of them being the differences in wages and salaries of the employed. Inequality in the labor market leads to concentration of wealth in the hands of the few. Some of the other causes are racial inequality, gender inequality, tax loopholes and increasing costs of education. The distributive inefficiency gets reduced by economic inequality. Inequality acts to reduce the total personal utility. The simplest form of measuring inequality arranges the entire population from poorest to the richest and pictures the percentage of spending attributable to either quintile or decile of th e arrangement. One of the most popular measures on inequality is Gini coefficient (Cullis and Koppen, 2007, p. 2-3). It ranges from 0 showing perfect equality to 1 showing perfect inequality. It is derived from the Lorenz curve which also arranges the population from the poorest to the richest. The Lorenz curve is drawn using the cumulative proportion of the population and the cumulative expenditure on the horizontal and the vertical axis

Strategic Management of Intel Case Study Example | Topics and Well Written Essays - 1500 words

Strategic Management of Intel - Case Study Example Dr. Nicely concluded, after eliminating other potential sources of the irregularity, that the Pentium chip itself must be flawed. After contacting Intel's technical support service to no avail, he posted an electronic message to a Compuserve bulletin board to ask other Pentium owners if they were experiencing similar problems. The message set off a flood of Internet bulletin board postings that confirmed the irregularity. The news media (print and television) soon released the story to the rest of the public and the concern over the flawed chip escalated. In November, Andrew Grove, CEO of Intel, posted a message of his own. He acknowledged the problem, emphasized its minimal significance and made an offer to replace the Pentium chip for users of the Pentium processor who are engaged in work involving heavy duty, concentrated floating point calculations. Meanwhile, Intel worked with Dr. Nicely and other scientists to develop a 'workaround' that it could build into its programs to avoid the flawed calculations. Intel's offer and workaround only accelerated the concern and reaction by the Pentium public. In the face of its self-inflicted PR nightmare and increasingly critical media coverage, Intel decided in December to offer "no questions asked" chip replacement program to all of its Pentium customers. The company would take a one time charge of $475 million against its earnings for the fourth quarter of 1994 to pay for this program. Perceived Product Risk Intel's initial decision to tolerate the flaw was based on a quantitative analysis of its customers' risks. After Intel concluded that these risks were extremely low, it decided that nothing needed to be done. A few months later when its customers were made aware of the flaw, many of them felt they had been intentionally deceived and that they had paid a premium price for a damaged product. Intel's customers ultimately concluded that something had to be done. With all the debate exchanged over the months following the public exposure of the Pentium flaw, the involved parties did manage to agree on one thing. The heart of the issue concerned risk. The issue in this debate can be broken down into two questions: did the Pentium flaw expose Intel's customers and Pentium owners (end-users) to undue risks and were those risks significant enough that Intel should replace all flawed chips Intel's "at-risk" customers, specifically IBM, were concerned that the flaw might diminish its reputation as a best product provider and, consequently, its sales would suffer. There was concern the public might view IBM as the source of the problem rather than Intel, to which the problem rightly belonged. The "at-risk" Pentium owners had already bought their computers. They were confronted with an involuntary risk. It was clear that the customers' and the Pentium owners' motivations to react were based on their assessments of risk. Intel's approach to resolving product defects reflected an implied assumption that the assembler would be responsible for dealing with the end-users (Pentium owners). Intel also assumed that information about the flaw did not need to be passed along to its customers due to the insignificance of the flaw. When millions of computers with flawed Pentium chips passed into the hands of end-users, both assumptions would prove to be poor. Microprocessor defects

WACC Essay Example | Topics and Well Written Essays - 750 words

WACC - Essay Example On the other hand, understating the WACC will result in overstatement of future cash flows and net present value, causing a negative net present value project to be accepted. If the project is a financing project, meaning that the cash flow at time 0 is positive and the cash flows in future periods are negative, overstating the WACC will result in understatement of future cash flows and overstatement of net present value, causing a negative net present value project to be accepted. On the other hand, understating the WACC will result in overstatement of future cash flows and understatement of net present value, causing a positive net present value project to be rejected. In the discounted payback period approach, WACC is used as the discount rate for deriving the present value of future cash flows if the investment is financed by both debt and equity. The investment is accepted if payback period of the investment is less than the cutoff time. Overstating the WACC will result in understatement of future cash flows and overstatement of payback period, causing a project that pay backs within the target payback period to be rejected. On the other hand, understating the WACC will result in overstatement of future cash flows and understatement of payback period, causing a project that pays back after the target payback period to be accepted. In the internal rate of return approach, WACC is used as the hurdle rate for deciding whether to accept the project. If the project is an investment project, the project is accepted if the internal rate of return exceeds WACC. If the project is a financing project, the project is accepted if the internal rate of return is smaller than WACC. If the project is an investment project, overstating the WACC will result in the internal rate of return smaller than the WACC and an acceptable project to be rejected. On the other hand, understating the WACC will result in the internal rate of return greater than the WACC and an unacceptable project to be accepted. If the project is a financing project, overstating the WACC will result in the internal rate of return smaller than the WACC and an unacceptable project to be accepted. On the other hand, understating the WACC will result in the internal rate of return greater than the WACC and an acceptable project to be rejected. In the profitability index approach, WACC is used as the discount rate for deriving the present value of future cash flows if the investment is financed by both debt and equity. The investment is accepted if ratio of the present value of the future cash flows divided by the amount of investment is greater than 1. Overstating profitability index, causing an acceptable investment to be rejected.

Chocolate Research Paper Example | Topics and Well Written Essays - 1000 words

Chocolate - Research Paper Example It is made up of cocoa solids and cocoa butter only and hence it is chocolate in its simplest form (Hawkins 19). It is bitter and thus is not a popular choice for most people who love chocolates. It is ordinarily used as an ingredient in baking and cooking. It adds chocolate flavor to cakes and brownies since it is smooth and rich in cocoa butter. Like unsweetened chocolate, semi-sweetened chocolate is mainly used for cooking purposes. They are mainly used for baking chocolate chip cookies although they can be used to bake many other commodities. It is composed of dark chocolate (cocoa butter and cocoa solids), sugar and vanilla that are an emulsifier. The percentage of sugar does not exceed 50% the mass of the chocolate (Hawkins 20). The ratio varies depending on the manufacturer. This form of chocolate has a good balance between sweetness and chocolate and thus and work well in most recipes. Bittersweet chocolates contain at least 35% of cocoa solids. They are dark in color and have rich flavors. Normally they have high percentages of flavonoids although their percentage depends on the manufacturer. They contain chocolate liquor, cocoa butter, and sugar. The high percentage of chocolate liquor content makes it dark. It is can be eaten and can also be used for baking purposes. It contains chocolate flavor, cocoa butter, and sugar. The percentage of cocoa solid ranges forms 35-45% depending on the manufacturer (Hawkins 20). The percentage of sugar is more than 50%. It is not easy to differentiate them with semi-sweet chocolate. It is made up of milk solids, sugar, and cocoa butter. 10 % is composed of cocoa liquor, and at least 12% is made up of dry milk solids (Hawkins 21). It is mostly eaten as candy bars and is preferred by most people who love eating chocolates. It was first developed by Daniel Peter, a Swiss candymaker, in 1876. It is made up of cocoa butter, milk, and sugar. Unlike other

America and the end of the Cold War Research Paper

America and the end of the Cold War - Research Paper Example The â€Å"Cold War† can be defined as â€Å"a state of political tension and military rivalry which stops short of full-scale war, especially that which existed between the United States and Russia after World War 2† (www.freedictionary.com) The United States was in favor of capitalism, while the Soviet Union favored Communism. Some countries in Europe and Asia aligned themselves with the United States or the USSR. â€Å"During the Cold War, the Soviet Union and United States dominated international politics as opposing superpowers.† (â€Å"Notions of Security: Shifting Concepts and Perspectives†12) There were persistent concerns over Soviets infringing on the national security of these nations. The Americans and the Soviets had nuclear weapons. This resulted in the nuclear arms race between the two governments. There were fears of nuclear war but it never transpired.1 Both nations also wanted to be the first in space. This as well as Communist rule left t he USSR with an inactive economy for many years. When Mikhail Gorbachev was appointed as president in 1985 his goal was to renew the nation’s economy. He and President Ronald Reagan set out to resolve the policy and arms disagreements between their nations. These issues were resolved peacefully between them. In 1990 Boris Yeltsin was elected as president of Russia. In 1991 the Soviet Union officially came to an end subsequently leading to the fall of Communism. The American public was cautiously optimistic about the end of the Cold War because no one was certain that the new form of government in Russia would last.2 â€Å"Communism went out with a whimper, not a bang, hobbling the victory dance.† (Allen & Schweikart 768) The United States and Russia no longer felt threatened by each other. â€Å"The expectation of violence between the two major strategic powers has been drastically reduced.† (Reisman860) Immediately after the Cold War ended President George H.W. Bush began the process of reducing military forces. Unfortunately this resulted in economic problems. Aerospace and shipbuilding companies were nearly bankrupt. There were fewer defense contractors. Soldiers, airmen and sailors were laid off.3 The Recession of the early 1990’s followed not long after this happened. Bush felt that the world had changed for the better as a result of the fall of Communism and felt that Russia and other former Communist nations had to cooperate. In 1991, Congress provided financial help to Russia and other nations so that they could destroy their nuclear weapons. 4 Russia had a seat at the United Nations Security Council that the Soviet Union held previously. The United Nations was able to forge ahead with a new focus once the Cold War was over. Russia (Allen & Schweikart) During the Cold War the primary focus of the United States Intelligence Agency had been the military threat the Soviet Union and its allies imposed upon the nation. When the C old War ended it â€Å"called into question the continued efficacy of U.S intelligence activities in the post Cold War world.† (DeConcini1) The agency knew that there may be potential for a threat but many officials felt that U.S. intelligence needed to help American international firms to compete for business in other countries. They felt that this would protect national security. During the Bush and Clinton administrations private businesses were not supported by intelligence agencies. Former Director of Central Intelligence Robert

Chocolate Research Paper Example | Topics and Well Written Essays - 1000 words

Chocolate - Research Paper Example It is made up of cocoa solids and cocoa butter only and hence it is chocolate in its simplest form (Hawkins 19). It is bitter and thus is not a popular choice for most people who love chocolates. It is ordinarily used as an ingredient in baking and cooking. It adds chocolate flavor to cakes and brownies since it is smooth and rich in cocoa butter. Like unsweetened chocolate, semi-sweetened chocolate is mainly used for cooking purposes. They are mainly used for baking chocolate chip cookies although they can be used to bake many other commodities. It is composed of dark chocolate (cocoa butter and cocoa solids), sugar and vanilla that are an emulsifier. The percentage of sugar does not exceed 50% the mass of the chocolate (Hawkins 20). The ratio varies depending on the manufacturer. This form of chocolate has a good balance between sweetness and chocolate and thus and work well in most recipes. Bittersweet chocolates contain at least 35% of cocoa solids. They are dark in color and have rich flavors. Normally they have high percentages of flavonoids although their percentage depends on the manufacturer. They contain chocolate liquor, cocoa butter, and sugar. The high percentage of chocolate liquor content makes it dark. It is can be eaten and can also be used for baking purposes. It contains chocolate flavor, cocoa butter, and sugar. The percentage of cocoa solid ranges forms 35-45% depending on the manufacturer (Hawkins 20). The percentage of sugar is more than 50%. It is not easy to differentiate them with semi-sweet chocolate. It is made up of milk solids, sugar, and cocoa butter. 10 % is composed of cocoa liquor, and at least 12% is made up of dry milk solids (Hawkins 21). It is mostly eaten as candy bars and is preferred by most people who love eating chocolates. It was first developed by Daniel Peter, a Swiss candymaker, in 1876. It is made up of cocoa butter, milk, and sugar. Unlike other

Ethics and Corporate Social Responsibility a Case Analysis of Enron Essay

Ethics and Corporate Social Responsibility a Case Analysis of Enron - Essay Example 2. An evaluation of the potential role of corporate social responsibility in saving Enron in line with the criticisms of CSR by Friedman and Barry. 3. An assessment of whether Enron should have favoured some stakeholders ahead of others or not. 4. An evaluation of whether codes of conducts and stated core values have an effect on a business or not. Question 1 The Role of the CEO in the Enron Scandal This portion of the research examines whether Enron chief, Kenneth Lay acted immorally or not. In order to examine the issue well, the paper would use a broad range of assessment of morality to identify whether actions of Lay were appropriate or not. Each of these issues would be examined critically. Dominant and Unfettered Power and Control It is apparent that Kenneth Lay had dominant and unfettered powers and control over activities of Enron. This is because he had stayed in power for a very long time and had a lot of control in decision making. Although this in itself is not immoral, i t created the impetus for a lot of immoral and amoral activities to be carried out by Lay in conjunction with his fellow managers and directors. Ideally, a business needs to have some kind of control and checks to ensure that managers do not abuse the system (Crawford, 2006 p114). This reason justifies the need for the establishment of an Independent Board of Directors and a Management team. Again, the board needs to be headed by a person who is different from the CEO in order to create an ideal situation where no one in the top hierarchy can get uncontrolled power over the activities of the company. In the case of Kenneth Lay, he was the CEO and the Chairman of the Board of Enron for 17 years and had unfettered powers which contributed to a lot of wrongs in the company. Disregard for Core Principles Kenneth Lay stated that the core principles of Enron were communication, respect, integrity, and excellence. However, there is strong evidence that he led the company to override the ve ry standards he set and the system that was meant to safeguard the implementation of those standards. George and Jones identify that overriding standards and principles means disregard of rules and regulations for reasons that are not consistent with the best interest of the business (2009). As such, there is evidence that Kenneth Lay did things that undermined the core guiding principles that he set for Enron. First of all, he claimed that communication was key. However, there were major reporting issues in Enron that led to its collapse. Secondly, he claimed that respect was a key principle. However, it is apparent that some stakeholder groups like employees were given tough treatments and their rights were blatantly disregarded. Thirdly, Enron claimed to seek integrity but in reality, they had serious issues with truthfulness and the attempt to disguise the reality in its financial situation to maintain a positive image with the public and other stakeholders. Finally, Enron state d that they sought excellence. Although they might have been a leading business at some point in their history, they used unsustainable systems and structures to attain this end. This led to major long term issues which culminated in the collapse of the company. Since Kenneth Lay had extensive powers to ensure that the core principles that he had outlined would be honoured and he failed to do so, there is a major