Wireless Technology in Hotels Assignment Example | Topics and Well Written Essays - 2500 words

Wireless Technology in Hotels - Assignment Example Later, we discover the importance of mobility and came up with a "wireless" network. Now, everybody is taking about "wireless" and we cannot help thinking of Wi-Fi, the marvel of wireless. This report details the technical aspects of Wi-Fi and its advantages over the conventional wired networks. It presents the evolution of Wi-Fi from a humble mobile device tool into a sought after device for high-speed wireless internet access. It shows the unique qualities of Wi-Fi that captures the heart of businesses around the globe and how it became so popular in the hospitality industry. It also covers the impact of wireless technology in hotels and the numerous benefits it will bring. In the past decades, the hospitality industry has witness remarkable rise in computer use. It is difficult to find an establishment in the industry without some type of information technology. IT influenced the hotels in various ways, increasing competence and reducing domestic operations cost through efficient property management systems, billing, accounting, human resources, inventories and more. It is no doubt an important tool for marketing and dissemination through the internet and digital media. It is the significant force driving change in hospitality industry and its occurring more quickly than anyone can foresee. Moreover, it has widely influence the in-room technology and gu... It seems that any hotel that does not acknowledge the vibrant nature of the hospitality industry, and appreciate the extraordinary changes taking place within it, will have a modest chance of being competitive in the 21st century. A hotel room with stunning view and high-speed broadband services are now becoming a standard request from travellers. It is an indication that the technology is already a part of the hotel industry and an essential service to implement in order to be competitive in the present industry setting. A "must have" amenity for mid-size to large hotels is the innovative technology known as Wi-Fi. It enables a person with a wireless enabled computer to connect to the internet remotely with greater transfer speed. Many hotels are now offering Wi-Fi access free as part of their standard services and are making money from this cutting-edge technology through soaring occupancy rates. THE WI-FI TECHNOLOGY Lucent and Agere Systems (formerly NCR Corporation and AT&T) with Victor Hayes invented Wi-Fi in 1991. Victor Hayes and his team design the standards such as IEEE 802.11b, 802.11a and 802.11g and later he became the father of Wi-Fi. The Agere System, without Hayes (retired in 2003), suffered strong competition from cheaper Wi-Fi solutions and later quit the Wi-Fi market in 2004. The term Wi-Fi for clarification, is not "Wireless Fidelity" but a term to described WLAN (Wireless Local Area Network) products that are based on the IEEE 802.11 standards. The Interbrand Corporation developed the brand name "Wi-Fi" for the Wireless Ethernet Compatibility Alliance (better known as Wi-Fi Alliance) for their marketing strategy. Audeh 2004, page

Sociology Functionalist Essay Example for Free

Sociology Functionalist Essay â€Å"Assess the Functionalist view that religion benefits both society as a whole and it’s individual members. † According to research carried out by sociologists, almost 90% of the world population follow a religion. There are numerous theories that attempt to explain the role of religion in our lives. The Functionalist outlook is a consensus perspective that sees religion performing positive functions for society as a whole and on an individual level. On the other hand, Marxism and Feminism offer conflicting perspectives that highlight the ideological function of religion. Marxists see religion as exploiting the proletariats and creating false consciousness. Feminists see religion as an instrument of patriarchy. This paper will attempt to assess the Functionalist claim that religion benefits both society and the individual. In any attempt to reach a considered view the arguments proposed by each theory will be reviewed. The approach will therefore remain analytical, critical and at all times engaged. Functionalists believe that society is a system of interrelated parts or social institutions, such as religion, the family and the economy. According to them society functions because of the existence of value consensus, that is, sets of norms and values by which society’s members live. Functionalists emphasise the social nature of religion and the positive functions it performs. For functionalists, religious institutions play a central part in creating and maintaining the value consensus, social order and solidarity. Emile Durkheim was the first functionalist to develop this idea. For Durkheim the key feature of religion was not a belief in God, spirits or the metaphysical, but he argues that religion provides a distinction between the sacred and the profane. Religion is more than just simply a set of beliefs; it involves rituals in relation to the sacred. These sacred things evoke such powerful feelings, which lead Durkheim to believe that something this powerful can only be society itself, which clearly suggests that religion is in fact less valuable than society. Durkheim believed that the essence of all religion could be found by studying its simplest form, in the simplest type of society. For this reason he used studies of an Australian Aboriginal tribe, with a clan system. For Durkheim when clan members worship their totemic animal, they are in fact worshipping society. He states that the totem inspires feelings of awe in the clan members precisely because it represents the power of the group on which the individual is dependent. Malinowski agrees with Durkheim that religion provides solidarity, however in his view it does so by performing psychological functions for the individuals. Malinowski identifies two situations in which religion performs its role. These are; when the outcome is important but is uncontrollable and therefore uncertain, and secondly at times of life crises. He uses his study of the Trobriand islanders to explain how religion performs its role. In his study he contrasts fishing in the lagoon and ocean fishing. Fishing in the lagoon involves no rituals because the method is easy and the outcome is predictable. However, ocean fishing is dangerous and the outcome is uncertain, this uncertainty promotes rituals, which are performed to ensure a safe a successful expedition. In this context, rituals provide the people with a sense of control which eases the psychological tensions and gives them confidence. Similarly, Talcott Parsons sees religion as a means to allow individuals to cope with unforeseen events and uncontrollable outcomes. However he puts forward two essential functions performed in modern society. This includes creating and legitimising society’s central values and making of the primary source of meaning. Quintessentially, for Parsons then, the function of religion is an instrument of law making. Karl Marx brings forth a differing perspective to the abovementioned. For Marx religion operates as an ideological weapon used by the bourgeoisie (that is the upper class in society) to legitimate the suffering of the poor as something inevitable and God-given. Religion misleads the poor into believing that their suffering is virtuous and that they will be favoured in the afterlife. Marxists believe that religion acts as an opiate to dull the pain of exploitation by masking its pain rather than treating its cause. Therefore, religion masks the underlying problem of exploitation that creates the need for it. However he ignores the positive functions of religion as functionalists suggest such as, psychological adjustment to misfortune. Unlike functionalists who see society as based on harmonious consensus, Marxists see all societies as divided into two classes. In modern capitalist societies, the upper classes that own the means of production exploit the proletariats. Whereas functionalists see religion as a unifying force that strengthens the value consensus. Marx predicts that the proletariats would become conscious of their exploitation and unite to overthrow capitalism. As such there will be no need for religion in a classless society and it will disappear. This view is a direct contrast with functionalists, as they believe that religion is a crucial part in society in terms of maintaining social solidarity and social integration. While, Marxists see religion as playing a crucial part in maintaining the status quo. On the other hand, Feminists take a totally different perspective on the function of religion in terms of benefiting both societies and individual members. For Feminists religion is patriarchal and an ideology that legitimises female subordination. Although the formal teachings of religion often stress the equality between sexes, there is still a considerable amount of patriarchy within many of them, such as women’s participation being restricted, for example not being allowed to preach or to read from sacred texts. In the same way, taboos that regard menstruation, pregnancy and childbirth as polluting may also prevent participation. Furthermore, religious laws and customs may give women fewer rights than men for example in access to divorce, how many spouses they can marry, decision making, dress codes et cetera. Religious influences on cultural norms can also lead to unequal treatment such as, genital mutilation or punishments for sexual transgressions. This contrasts with the functionalist definition that defines religion in terms of the contribution it makes to social integration. This definition proves problematic for feminists who argue the restrictions imposed on women’s participation in religious organisations, do not consent with such functionalist claims. In effect, divisions in society based on gender, for example regarding menstruation or pregnant women as taboos, break social integration. According to Durkheim the fact that sacred things evoke such powerful feelings in believers indicate to Durkheim that this is because they are symbols representing something of great power. However, feminists argue that sacred texts largely feature the doing of male prophets and are usually written and interpreted by men. This has the effect of dividing society by gender and causing conflict between the two. In conclusion, functionalism is a consensus perspective that sees religion performing positive functions for society and individuals, providing a moral framework for society, providing identity as well as providing individuals with buoyancy in times of uncertainty and misfortune. In contrast to functionalist theory, Marxism and feminism offer conflicting perspectives, which highlight the ideological functions of religion. Marxists see religion as exploiting the proletariat and creating false consciousness. Feminists see religion as an instrument of patriarchy. Each theory posits valuable arguments and insight into the role of religion.

Why Did Communism in Europe Fail?

Why Did Communism in Europe Fail? The year 1989 saw a surprising and swift transformation of Central and Eastern Europe. Where only a few years before the ouster of communism would have been unimaginable, now country after country removed its communist government and embraced some form of democracy. Never in human history has there been such a sweeping governmental change apart from the result of some military engagement (Schopflin 1990, 5). Examining the reasons behind the fall of communism presents†¦ First, the theoretical model of communism itself is flawed. It makes incorrect assumptions about human nature and supports an unsustainable economic matrix. Economic and political pressures in Central and Eastern European economies during the 1980s exposed these inadequacies. Thereafter, an overextension of Soviet resources due to military spending combined with global pressures in regards to human rights initiatives led to one country after another freeing itself from Soviet control. Communism is a political and social system based on a concept of equal distribution of resources. Ideally, goods and services are owned communally amongst all citizens of a communist state, and distributed equally so as to meet each person’s need (Stokes 1993, 5). The problem comes in the actual application of communism, as it works counter to human nature. First, the system assumes that each worker will work to his or her capacity for the good of all. In reality, workers soon realized they would be paid the same no matter how hard they worked, and without the incentive of personal gain, began producing at the lowest possible level. Famous Russian economist Boris Brutzkus noted that the idea of equal compensation for skilled and unskilled labour undermined productivity and created an economically unsolvable problem (Wilhelm 1993, 346). In addition, any risk related to innovation is transferred wholly to the state, so the worker â€Å"loses little in the event of failure and g ains nothing in the event of success,† making it impossible to motivate him or her to full productive potential (Wilhelm 1993, 349). â€Å"If profits must be handed over to the public treasury, and losses are made up with subsidies, there is no incentive to be innovative and efficient† (Fischer 1991, 12). The communist model similarly assumes that political leaders will act in the best interests of all the citizens of the state, rather than simply in their own. Fischer notes that power is an extremely corrupting force, and rarely if ever do those with significant power avoid its corrupting influence (Fischer 1991, 12). This was made particularly clear in countries such as Romania, where the communism state became in essence a totalitarian dictatorship under Ceausescu (Hall 2000, 1070). Central and Eastern European countries were by and large governed by a handful of leaders who had enormous control over their fellow citizens, and were often both personally and politically corrupt in their administrations (Fischer 1991, 12). Because of these misunderstandings of human nature, communism is not designed with the checks and balances common to a democratic government (Fischer 1991, 12). For example, democracies have both secret elections and a free press. Regular elections provide a voice to the citizens of a country in determining its leadership. This forces leaders to listen and be responsive to the citizenry, less they be removed from power. A free press both informs citizens of what is happening in the country and government and exposes corruption. (Wilhelm 1993, 352). Uncensored media similarly forces leaders to act ethically and not mistreat the citizenry. Communist regimes in Europe lacked such systems of accountability, and as such, their leaders did not always act in the best interests of the average citizen. Economically, there are also serious flaws in the communist model. Production results from the cooperation of labour, capital, and nature (Wilhelm 1993, 347). Communism based its economic model on â€Å"directed economic activity according to a unitary state plan based upon statistics, under which categories such as interest, rent and profit lost their significance† (Wilhelm 1993, 346). Markets and the forces that shape them were replaced by a planned system based on labour costs (Wilhelm 1993, 346). This led to further problems, as it oversimplified the economic factors at play in the counties’ industries, which led to incorrect production planning. According to Brutzkus, â€Å"the socialist state is not in a position, even with the help of all its scientific theory and immense statistical apparatus, to measure the needs of its citizens or to reduce needs to one level; for this reason it is unable to provide production with the guidance it needs† (Wilhelm 1993, 347). In short, Brutzkus anticipated what the literature on communist economies calls the success indicator problem. The government was not able to successfully plan for the complexity of the market. â€Å"This process is infinitely more complicated than that which takes place under capitalism, where at worst the entrepreneur will have to increase his price to cover this or that means of production† (Wilhelm 1993, 348). The results were Central and Eastern European nations with overly-specialized industry that had no market except the Soviet bloc, fewer than needed consumer products, and an uneven proportion of manufactured products to the demand of the populace (Karatnycky 2002, 57). In contrast, while price liberalization in post-communist Poland â€Å"brought an immediate end to the pervasive shortages and queues that had plagued Poland’s centrally-planned economy† (Kramer 2004, 60). A centrally-planned â€Å"command economy† is â€Å"an engine for the dissipation of social energy and resources,† that is only effective in mobilizing resources for a short period of time (Wilhelm 1993, 353). After this the communist economic model leads to rapid deterioration and becomes increasingly ineffective as time goes on (Wilhelm 1993, 353). The communist bloc was able to live off the resources it possessed prior to communization, such as surplus rural labour and certain capital resources, through the 1950s (Schopflin 1990, 4). This reinforced the idea to some that the communist economic plan was workable. However, as these resources dwindled and economic indicators declined, the standard of living in communist Europe became noticeably lower than her capitalist counterpart. Wilhelm contends that when statistics are adjusted for their propagandistic distortions, â€Å"East Germany was poorer than Mexico†¦ West Germans received a rather nasty shock when the y were able to enter East Germany and see the actual state of the East German economy for themselves (Wilhelm 1993, 352). This led to growing unrest amongst the citizens of Central and Eastern Europe, who saw themselves falling farther and farther behind the West. At this time the Soviet Union, the main customer for Central and Eastern European countries’ exports, was also facing economic difficulties. Some of this was due to the slowing of its own communist economic system and the global pressures also faced by the European communist countries (Stokes 1993, 56). In addition, a heightened arms race with the United States and its long and disastrous engagement in Afghanistan caused the USSR to commit more to its military spending than it could afford (Stokes 1993, 58). This both left less to spend in its satellite countries and fewer military troops to commit to suppressing uprisings in Europe. As the postwar status-quo depended in part on the threat of Soviet military intervention, this added to the growing instability in Central and Eastern Europe (Kramer 2005, 11). The communist European nations were historically not independently supportive of communism, but had communism imposed upon them unwillingly after World War II (Kramer 2005, 10). From the beginning, Eastern European countries were subjected to and directed in communism â€Å"firmly against the wishes of the majority† (Schopflin 1990, 4). One Baltic leader described the events of 1989 by saying â€Å"we could finally end the illegal occupation of our country and rejoin the community of free nations† (Kramer 2004, 21). Because the populations of these countries were not ideologically supportive of communism, their governmental leaders had to utilize both force and the threat of force to keep the countries functioning (Kramer 2004, 21). By the 1980s, the Soviet Union did not have the resources to do so, nor did many of the European countries in the Soviet bloc (Stokes 1993, 58). In addition, then leader of the USSR Gorbachev was less quick to turn to a military solution. â €Å"Unlike in 1956, when Khrushchev ultimately relied on military force to preserve the Communist bloc, Gorbachev†¦ actively encouraged drastic political changes in Eastern Europe that would defuse the potential for another violent uprising like the one that engulfed Hungary in October-November 1956 (Kramer 2005, 69). The resulting combination of Gorbachev’s reforms, his reluctance towards military force, and his â€Å"reorientation of Soviet foreign policy had a profound impact on the politics of Eastern Europe† (Kramer 2005, 69). Finally, there was a growing emphasis on human rights. This also caused the communist regimes to pause and consider use of military force against civilian uprisings. â€Å"The insistence on the introduction of human rights into the Helsinki process resulted in the slow but inexorable diffusion of the principle into Soviet-type politics and contributed qualitatively to weakening the legitimating force of Marxism-Leninism (Schopflin 1990, 16). This provided intellectuals in the Central and Eastern European opposition movements with â€Å"an intellectual basis from which to attack and thus erode the official systems† (Schopflin 1990, 16). It also gave workers reasons to organize collectively. When faced with a government that seems fundamentally unchangeable, people will only organize to resist if given some idea or goal of value which they can support (Benda et al. 1988, 228-29). All the major democratic oppositions in Central Europe had as leaders activists that had at one tim e or another been human rights dissidents (Isaac 1996, 303). The system was untenable, the citizens were unhappy, and those interested in political reform had a reason to begin organizing. At this point, the next ingredient necessary for communism’s demise was technology. Where in the past a particular government could cover-up or minimize an uprising in one place, preserving the threat of force and fear in its citizens, increased use of technology exposed these attempts and the sometimes blatant lies told by government officials(Kramer 2005, 82) For example, because of technological advances in broadcasting, â€Å"West German television broadcasts reached the large majority of households in the GDR, almost all East German citizens were able to watch uncensored coverage of Gorbachev’s perestroika and glasnost (Kramer 2005, 82). As Stokes concludes, the response of Central and Eastern European countries in 1989 was not a revolution of total innovation, but rather the shucking off of a failed experiment in favor of an already exis ting model, pluralist democracy (Stokes 1993, 260). The collapse of communism in Hungary began in 1986, when the country’s intellectuals began to abandon Kadar, who refused to recognize or act upon the country’s economic crisis situation (Schopflin 1990, 7). Similar processes occurred in Poland, Bulgaria and Czechoslovakia (Schopflin 1990, 7). Because they were increasingly exposed to the existence of a better system, they were empowered to push for it in their own countries. In the end, communism failed from a combination of factors, not the least of which was its own internal flaws. It may be that the twentieth century’s experiment in communist Europe was misguided from the start. â€Å"According to Marx’s materialistic conception of history, societies pass through four formative stages on their way to becoming communist: asiatic, ancient, feudal, and bourgeois capitalist† (Koranda 1990, 19). However, this was not true for any of the Eastern European countries with communist governments in the twentieth century. Russia forced communism on these countries, rather than it evolving in some natural pattern. â€Å"Disregarding Russia, many of the European countries that went through Communism had belonged, in the past, in whole or in part to the Austrian-Hungarian Empire† and had governments closer to a feudal system than any other. (Kovac 2002, 178). Marx might well argue, therefore, that these countries were not ready for commun ism when it was imposed upon them. Koranda would contend, however, that in reality Marx got the order wrong. Communism is, in his argument, the guild stage which many Western European countries passed through on the way to capitalism. Since many Eastern European countries were closer to feudal than free-market prior to World War II, from Koranda’s theoretical standpoint, formerly Communist Europe is now progressing â€Å"naturally† from communism to capitalism (Koranda 1990, 20). This would explain communism’s initial success, and the need for it to be eventually supplanted by capitalism. BIBLIOGRAPHY Benda, V, et al. 1988. Parallel Polis, or an Independent Society in Central and Eastern Europe: An Inquiry. Social Research, Spring-Summer1988, 55:1-2. Fischer, D. 1991. Why did Communism fail? Social Alternatives, Dec1991, 10:4, 12. Hall, R.A. 2000. Theories of collective action and revolution: evidence from the Romanian transition of December 1989. Europe-Asia Studies, Sep2000, 52:6, 1069-93. Isaac, J.C. 1996. The meanings of 1989. Social Research, Summer1996, 63, 291-344. Karatnycky, A. 2000. Memory Lapse. American Spectator, Feb2000, 33:1, 57-58. Koranda, Tim. 1990. The God That Failed History. Vital Speeches of the Day, 10/15/90, 57:1, 19-21. Kovà ¡Ãƒâ€žÃ‚ , L. 2002. The Failure of Communism: A Case for Evolutionary Rationalism and Evolutionary Humanism. Dialogue Universalism, 12:8/10, 177-197. Kramer, M. 2003. The Collapse of East European Communism and the Repercussions within the Soviet Union (Part 1). Journal of Cold War Studies, Fall2003, 5:4, 178-256. Kramer, M. 2004. The Collapse of East European Communism and the Repercussions within the Soviet Union (Part 2). Journal of Cold War Studies, Fall2004, 6:4, 3-64. Kramer, M. 2005. The Collapse of East European Communism and the Repercussions within the Soviet Union (Part 3). Journal of Cold War Studies, Winter2005, 7:1, 3-96. Schopflin, G. 1990. The end of communism in Eastern Europe. International Affairs, Jan1990, 66:1, 3-16. Stokes, G. 1993. The Walls Came Tumbling Down: The Collapse of Communism in Eastern Europe. Oxford: Oxford University Press. Wilhelm, J.H. 1993. The Soviet economic failure: Brutzkus revisited. Europe-Asia Studies, 45:2, 343-57.

Consumer Benefits and Controversy of High Fructose Corn Syrup Essay exa

The Bittersweet Truth to High Fructose Corn Syrup This paper is about high fructose corn syrup, a widely used sweetener made from corn. It discusses the history behind it and explains the process through which it is made and why it is used so widely. It also discusses the link between high fructose corn syrup and obesity. This research paper provides and in-depth explanation of the consumer advantages of high fructose corn syrup as well as the controversy behind its labeling as natural. Most people cannot resist the sweet taste of candy, cookies, cake, or anything else you can think of. The majority of Americans have plenty of these products in their pantries, ready to be eaten. These people think that they are just eating junk food full of sugar, but almost everything that is sweet that you buy at the supermarket is chock full of something even worse, high fructose corn syrup. High fructose corn syrup is extremely soluble and mixes well in many foods. A lot of companies are willing to use it because it is cheap to produce in large quantities, unbelievably sweet and tasty, and extremely easy to store. There is a lot of controversy over high fructose corn syrup because of its questionable health effects, taste, and labeling as a natural ingredient. Even though high fructose corn syrup is a relatively recent development in food products around the world, there is a lot of history behind how it is made and why it is used in such a variety of edible goods. A scientist named Yoshiyuki Matsuoka-Naoi Takasaki patented high fructose corn syrup in 1971 while working for a government-affiliated laboratory in a large city in Japan. But it wasn't until 2001, shortly after the United States of America Surgeon General, Dr. Da... ... and the rest of the world will find themselves in an inescapable abyss. Works Cited B. Guggenheim, Zurich. Health and Sugar Substitutes. Switzerland: S. Karger, 1979 Forristal, Linda Joyce. "The Murky World of High-Fructose Corn Syrup." In the Kitchen with Mother Linda. 12 Mar 2003. The Weston A. Prince Foundation . 28 Jul 2007 . "High Fructose Corn Syrup Facts." HFCS Facts. 2007. The Corn Refiners Association. 23 Jul 2007 . Hopkins, Kate. "Why Coke Uses High fructose corn syrup." Accidental Hedonist. 01 Jan 2006. 23 Jul 2007 . National Academy of Sciences. Sweeteners Issues and Certainties. 4th Edition. Washington D.C.: Academy Forum, 1975.

College Essay Essay

Topic: In the space provided, please write a concise narrative in which you describe a meaningful event, experience or accomplishment in your life and how it will affect your college experience or your contribution to the UF campus community. You may want to reflect on your family, your school or community activities, or your involvement in areas outside of school â€Å"Hurry up! The plane leaves in two hours,† my mom reminded me as I swiftly, yet reluctantly continued to stuff more and more belongings into the tiny taxi. Waving good-bye to family members and friends, who I had spent my whole life with, was an exceptionally uncomfortable and difficult task. On the way to the airport as my mom tried to comfort me, she constantly reminded me, â€Å"Life will be no different in the Dominican Republic than in the USA.† However, this proved to be false as soon as I stepped off that plane. Not understanding a single word being said around me, I realized I would have to adapt to a new culture, but at the same time carry on my own. â€Å"Class, this is Alberto and he will be joining our class for this last month of the school year,† the teacher yelled as I stood next to her puzzled and embarrassed. For a few hours, I plainly sat in my chair without saying a word, reflecting on my already missed memories of school in Rhode Island, until another student named Luis approached me. Of course, I was expecting him to say something in Spanish, but shockingly he spoke to me in English. Without hesitation, I responded to him and we quickly became close friends. As time went on, I realized that all those Spanish classes I had taken in Hendricken were not a waste of time, and were finally beginning to pay off. After just a few weeks I accomplished my goal of speaking a different language, and was able to exchange a few words with my teacher and other classmates in Spanish. From then on, my fear turned into a desire to learn more and more about the Dominican culture and teach others about mine. As  the school year came to a close, we were told to bring food for a party we were going to have to celebrate a successful year. Hot dogs, hamburgers, pizza, just to name a few different things, were set on the table. The shy whispers of my classmates showed their eagerness for what I had brought. â€Å"These are called meatball surprise; they are a meatball sandwich mixed with pasta and topped off with grated cheese† I proudly announced, as people tried and promptly fell in love with the food. It felt great to be able to teach others about my own culture and  heritage while learning about theirs. It didn’t take long to overcome my fear and turn it into a desire to adapt to a new world and teach others about mine. I went to the Dominican Republic as a boy just trying to get service hours but I left a man and understanding that everybody needs help and if you give it, you will be rewarded somehow. Now, three years after this life-changing event, I am reminded everyday by my habits and actions about my American roots and my newly acquired Dominican traditions. What happened in the D.R will always be a part of me because when I think of the Dominican Republic I can think to myself that I helped family have a house and food and water and that will always be a positive thing to me. Whether at the University of Florida, or anywhere else, I will always carry, teach, and expand on my distinct heritage.

Final Exam

Answer four of the following seven essay questions. Essay answers should be in paragraph form using complete sentences. (No bullet points) Use PAPA style for citations as needed. Exams may be subject to student submission using Turning at the professor's discretion. Your answers should be submitted as a Word file attached to an email sent to me by the start of class on March 5th. While brevity Is the soul of wit, essay answers should err on the side of completeness versus brevity.That said, I don't want to see the answer to any question go beyond two single-spaced hypocrites pages using a font size of 10-12 points. 1. Congratulations! You have Just been elected ruler off small OLD. What steps will you take to manage the country's balance of trade, and Its currency? Name and use an actual country don't make one up. Sierra Leone is a country that is rich in agricultural and mining resources, yet the great majority (over 70%) of the country still lives in poverty. Economic growth is hin dered by disadvantageous exchange rates and government budget deficits.As the recently elected President of Sierra Leone, I will take any and all necessary steps o bring this beautiful country out of poverty (www. Henbane. Org, 2014). Sierra Leone Is currently working with the International Monetary Fund (MIFF) to implement changes and improvements in our country's economic system. Sierra Leone has made important strides in economic reconstruction and macroeconomic as well as political stability since the end of the civil conflict in 2002. Economic growth has strengthened in the last two years with a stream of iron ore production and increased Infrastructure Investment.As the new president, I will continue working with the MIFF to manage the balance of trade and stabilize our currency (www. MFC. Org, 2013). In regards to Sierra Lens's currency, the exchange rate system is classified as floating, with the value of the Leone (currency) determined by the market. Currently, the central banks interventions are limited and aimed at smoothing volatility in the market. In order to stabilize the currency, I will diligently work with the Bank of Sierra Leone (BOSS) and with the MIFF to Introduce a stringent stabilization policy and reduce our country's debt.This policy will be aimed at first and foremost at tightening monetary regulations and reducing government borrowing. I will encourage the BOSS o move from a wholesale foreign exchange auction system to a retail auction system available to importers. This will enhance the currency's stability in the market as well as improve competitiveness. I will also work with the BOSS to improve monetary policy signaling, address remaining gaps In banking supervision, monetary and foreign exchange operations. I initiatives to encourage the development of micromanage in rural areas.Lastly, and perhaps most importantly, I will continue to work with the MIFF and the BOSS to develop a financial literacy campaign that will help to spr ead knowledge and titivation to continue efforts to stabilize the currency (www. Miff. Org, 2013) As president, I have also been charged with stabilizing trade in Sierra Leone. One of the biggest challenges in trade in Sierra Leone is that of smuggling and illicit trading activities. Sierra Leone is known for mining, especially diamonds, but poor regulation and policy enforcement, and high levels of corruption that lead to considerable levels of money laundering activities.As president, I will establish stricter controls and taxes around the mining trade, and crack down on corrupt government officials. I will continue to work with the government-created mining community development fund (DACCA), created to raise local communities' stake in the legal diamond trade, which returns a portion of diamond export taxes to diamond mining communities (www. Heritage. Org, 2014). Throughout my term as president, I hope to create a great economic turnaround for Sierra Leone, not only through bal ancing the currency and trade in the country, but through many more positive changes.I hope that by reducing budget deficits and improving the fiscal position of the government, I will be able to rehabilitate our social and economic infrastructure, stabilize the economy and provide a better life for Sierra Lens's people. 2. Compare and contrast the different methods of hedging transaction exposure. Include both derivative and non-derivative solutions. Transaction exposure is one of three types of foreign currency exposure. It is a type of risk that companies involved in international trade will face when entering fixed-price financial contracts.The risk occurs after the financial contract is made, and the subsequent fluctuations in currency exchange rates occur randomly and unpredictably. Although transaction exposure is considered short-term economic exposure, these changes in exchange rates can still affect the contract negatively, resulting in significant losses for the firm. The refore, companies participate in various hedging activities to avoid losses from transaction exposure (Nun & Arsenic, 2012). In transaction hedging, there are both derivative as well as non-derivative solutions. Derivatives are simply a contract between two parties.One of the ways which firms hedge transaction exposure is through the use of derivatives such as options contacts. Options are contracts used to reduce the risk of transactions by sing calls (sell) or puts (buy) on a financial asset at an agreed-upon price at some time in the future, which is known as exercising the option. Options also have a maturity or expiration date. In Europe, options can only be exercised at their maturity date, whereas in the United States, options can be exercised any time during the contract (Nun & Arsenic, 2012). Another derivative solution is a futures contract.Futures contracts are an agreement to buy or sell an asset at an agreed-upon price in the future. Unlike options, futures contracts ar e standardized for an amount of the asset, and are usually transacted to exit the market. Hedgers avoid price variation in the market by and pass off risk to a speculator who will take a long or short position in the futures contract. The speculator is considered to be more willing to take on the price risk variation. Futures contracts are short-term and profits and losses are realized on a daily basis (Nun & Arsenic, 2012).Somewhat similar to a futures contract is a forward contract. Forwards are also a contract to buy or sell an asset at an agreed-upon price in the future, however, forward contracts have a specific maturity date unlike the daily settlements used in uterus contracts. Rather than being a standardized contract, forwards are tailor made to the needs of the participants. Also different than futures is that when trading forwards, forwards are often settled through the delivery of goods or cash (Nun & Arsenic, 2012).There are numerous other types of derivatives used to m itigate foreign exchange risk, but the most common are forward and futures contracts, futures options, and swaps which will be discussed later in this exam (Nun & Arsenic, 2012). Many Macs also participate in non-derivative methods for hedging transaction risk. These are often used if a firm has positions in less liquid currencies. In order to mitigate risk in these cases, cross-hedging is a common technique in which a firm will hedge a position in one asset by taking a position in another asset.Effectiveness of cross-hedging is highly dependable on the strength of the relationship between the commodity futures prices and the exchange rate (Nun & Arsenic, 2012). Another non-derivative method to avoid transaction exposure is hedging via lead and lag. A company can lead, to pay or collect on an invoice early, or lag, which means to pay or collect late. By timing the lead and lag strategy correctly, the firm can protect themselves against depreciation or appreciation of the foreign cur rency they are dealing in (Nun & Arsenic, 2012).Hedging through invoice currency can help firms diversify exchange exposure by using currency basket units. A currency basket is a selected group of currencies in which the weighted average is used as a measure of the value of a contract or obligation. It functions as a benchmark for regional currency movements. Because it is a portfolio of currencies, its value is more stable and can be useful as a hedging LOL, especially for long-term contracts where there are no forward or options contracts available (Nun & Arsenic, 2012).The last non-derivative form of transaction hedging that we will discuss is that of exposure netting. Exposure netting helps to centralize a firm's exchange exposure management function in one location, typically in a reinforce center. All invoices from nitrating transactions are sent here, where overall exposure is analyzed and determined. Foreign exchange experts can then determine the optimal hedging methods for the portfolio of transactions and move forward to implement them (Nun Arsenic, 2012). Overall, we have seen that there are numerous options to hedge transaction exposure.There are some similarities among them, but they differ from each other and are applicable to different needs. Derivative forms of hedging are typically contractual, relatively short term solutions to transaction exposure, whereas non- lifestyle. No matter what the case, however, it is prudent for any NC to determine a strategy for transaction hedging before going into significant overseas contracts. 3. Compare and contrast a plain vanilla currency swap with a plain vanilla interest rate swap. Describe and Justify a situation where a NC would use each type of swap.As discussed briefly above, swap transactions are a type of derivative used to mitigate currency exposure in forward trades. A swap is an agreement between two parties to exchange a sequence of cash flows over a period of time- a simultaneous sale of spot foreign exchange against a forward purchase of an equal amount of foreign currency (Nun & Arsenic, 2012). A plain vanilla interest rate swap is the most common and simplest type of swap. They are customized contracts that can be paid monthly, quarterly, yearly, or on a basis decided on by the firms involved.In a plain vanilla interest rate swap, one part agrees to pay the contract at a fixed interest rate, while the other party agrees to pay at a floating interest rate, and the two cash flows are paid in the same currency. The swap typically has a set date of maturity set at some point in the future (MacAfee, 2012). A plain vanilla currency swap, unlike the plain vanilla interest swap, interest and principal payments on a loan are exchanged in 2 currencies. In the plain vanilla currency swap, the two parties exchange payments at the beginning and end of the swap, which also differs from interest rate swaps (MacAfee, 2012).In the case of plain vanilla interest rate swaps, Macs or Mi ff would use these when they are paying a floating rate of interest on liabilities and earning a fixed rate of interest on assets. It can be highly risky for a firm to have such a mismatch between assets and liabilities. Therefore, the firm could use a plain vanilla interest rate swap to rectify the imbalance in their interest payments (MacAfee, 2012). For the case of the plain vanilla currency swap, a firm would be interested in conducting this type of swap when the firm wants to expand operations into another country, but has comparative advantage in its home country.The firm will likely have more favorable financing in its home country, and therefore could perform a currency swap with the country it is expanding into, and gain the necessary funds in the new currency to finance its startup and operations (MacAfee, 2012). 4. Discuss the issues and potential solutions for a NC contemplating foreign direct investment in a OLD. By definition, a NC or Multinational Corporation, is regi stered and/or has operations in more than one country. These types of firms engage in FED, or Foreign Direct Investment.FED is an investment made by a company based in one country onto a company or entity based in another country. Macs making direct investments typically have a significant degree of influence and control over the company into which the investment is made. Open economies with skilled workforces and good growth prospects tend to attract larger amounts of foreign direct investment than closed, highly regulated economies (www. Investigated. Com, 2014). FED can have numerous risks and obstacles for the NC involved. Olds, or Less Foreign direct investment can be an important source of employment opportunities for developing countries.However, anti-corporate advocates criticize Macs for entering Olds that have low human rights or environmental standards. They claim that multinationals give rise to large merged conglomerations that reduce competition and free enterprise, ra ise capital in host countries but export the profits, exploit countries for their natural resources, limit workers' wages, erode traditional cultures, and challenge national sovereignty. However, they remain attractive to investors due to low costs of labor, poorly enforced environmental and economic regulations, and inexpensive resources (www. Investigated. Com, 2014). Economic risk depends on the foreign country's financial state. A country with stable finances and a sound economy will be more attractive to foreign investors than one that has currency fluctuations and difficulty paying debt. Trade barriers and shareholder diversification issues can all be part of the economic risks taken on by a NC that is contemplating FED (Nun & Arsenic, 2012). Trade barriers can often be overcome by moving trade through other countries without trade restrictions.In the case of physical trade barriers, such as poor transportation, FED can be put into place to improve infrastructure and reduce tr ansportation costs (Nun & Arsenic, 2012). Political risk emerges when the political climate in a foreign country becomes unfriendly to investors. Political risk can be classified into three types: transfer risk, operational risk, and control risk. Transfer risk arises from uncertainty about cross border flows of capital and payments. Operational risk arises when the host country's policies affect the NC.Lastly, control risk is caused by uncertainty about the host country's policies regarding ownership and control of local operations (Nun & Arsenic, 2012). When contemplating investing in a OLD, the NC should take care to meticulously search and define the level of risk for doing business with the OLD they are considering, and also outline possible solutions in case of risk exposure. For example, those seeking more in-depth coverage of a particular country or region, two excellent sources of objective, comprehensive country information are the Economist Intelligence Unit and the Centr al Intelligence Agency World Fastback.Either of these resources provides an investor with a broad overview of the economic, political, demographic and social climate of a country. The Ell-J also provides ratings for most of the world's countries. These ratings can supplement those issued by Moody's, S and the other â€Å"traditional† ratings agencies (www. Investigated. Com, 2014). After completing the country analysis, the investing NC will have to decide on a sound investment approach. One of the recommended approaches is for the NC to invest in a broad international portfolio.Diversification is a fundamental principle of domestic investing, and is even more important when investing internationally. Even in a more concentrated portfolio, investments should be spread among several countries to maximize diversification and minimize risk (www. Investigated. Com, 2014). After deciding where to invest, an investor must decide which type of investment to enter. The choice of inve stment vehicle depends on each investor's individual knowledge, experience, risk profile and return objectives. When in doubt, it may make later.In addition to thoroughly researching prospective investments, an international investor also needs to monitor his or her portfolio and adjust holdings as conditions dictate. As in the U. S. , economic conditions overseas are constantly evolving, and political situations abroad can change quickly, particularly in emerging r frontier markets. Situations that once seemed promising may no longer be so, and countries that once seemed too risky might now be viable investment candidates (www. Investigated. Com, 2014). Final Exam Answer four of the following seven essay questions. Essay answers should be in paragraph form using complete sentences. (No bullet points) Use PAPA style for citations as needed. Exams may be subject to student submission using Turning at the professor's discretion. Your answers should be submitted as a Word file attached to an email sent to me by the start of class on March 5th. While brevity Is the soul of wit, essay answers should err on the side of completeness versus brevity.That said, I don't want to see the answer to any question go beyond two single-spaced hypocrites pages using a font size of 10-12 points. 1. Congratulations! You have Just been elected ruler off small OLD. What steps will you take to manage the country's balance of trade, and Its currency? Name and use an actual country don't make one up. Sierra Leone is a country that is rich in agricultural and mining resources, yet the great majority (over 70%) of the country still lives in poverty. Economic growth is hin dered by disadvantageous exchange rates and government budget deficits.As the recently elected President of Sierra Leone, I will take any and all necessary steps o bring this beautiful country out of poverty (www. Henbane. Org, 2014). Sierra Leone Is currently working with the International Monetary Fund (MIFF) to implement changes and improvements in our country's economic system. Sierra Leone has made important strides in economic reconstruction and macroeconomic as well as political stability since the end of the civil conflict in 2002. Economic growth has strengthened in the last two years with a stream of iron ore production and increased Infrastructure Investment.As the new president, I will continue working with the MIFF to manage the balance of trade and stabilize our currency (www. MFC. Org, 2013). In regards to Sierra Lens's currency, the exchange rate system is classified as floating, with the value of the Leone (currency) determined by the market. Currently, the central banks interventions are limited and aimed at smoothing volatility in the market. In order to stabilize the currency, I will diligently work with the Bank of Sierra Leone (BOSS) and with the MIFF to Introduce a stringent stabilization policy and reduce our country's debt.This policy will be aimed at first and foremost at tightening monetary regulations and reducing government borrowing. I will encourage the BOSS o move from a wholesale foreign exchange auction system to a retail auction system available to importers. This will enhance the currency's stability in the market as well as improve competitiveness. I will also work with the BOSS to improve monetary policy signaling, address remaining gaps In banking supervision, monetary and foreign exchange operations. I initiatives to encourage the development of micromanage in rural areas.Lastly, and perhaps most importantly, I will continue to work with the MIFF and the BOSS to develop a financial literacy campaign that will help to spr ead knowledge and titivation to continue efforts to stabilize the currency (www. Miff. Org, 2013) As president, I have also been charged with stabilizing trade in Sierra Leone. One of the biggest challenges in trade in Sierra Leone is that of smuggling and illicit trading activities. Sierra Leone is known for mining, especially diamonds, but poor regulation and policy enforcement, and high levels of corruption that lead to considerable levels of money laundering activities.As president, I will establish stricter controls and taxes around the mining trade, and crack down on corrupt government officials. I will continue to work with the government-created mining community development fund (DACCA), created to raise local communities' stake in the legal diamond trade, which returns a portion of diamond export taxes to diamond mining communities (www. Heritage. Org, 2014). Throughout my term as president, I hope to create a great economic turnaround for Sierra Leone, not only through bal ancing the currency and trade in the country, but through many more positive changes.I hope that by reducing budget deficits and improving the fiscal position of the government, I will be able to rehabilitate our social and economic infrastructure, stabilize the economy and provide a better life for Sierra Lens's people. 2. Compare and contrast the different methods of hedging transaction exposure. Include both derivative and non-derivative solutions. Transaction exposure is one of three types of foreign currency exposure. It is a type of risk that companies involved in international trade will face when entering fixed-price financial contracts.The risk occurs after the financial contract is made, and the subsequent fluctuations in currency exchange rates occur randomly and unpredictably. Although transaction exposure is considered short-term economic exposure, these changes in exchange rates can still affect the contract negatively, resulting in significant losses for the firm. The refore, companies participate in various hedging activities to avoid losses from transaction exposure (Nun & Arsenic, 2012). In transaction hedging, there are both derivative as well as non-derivative solutions. Derivatives are simply a contract between two parties.One of the ways which firms hedge transaction exposure is through the use of derivatives such as options contacts. Options are contracts used to reduce the risk of transactions by sing calls (sell) or puts (buy) on a financial asset at an agreed-upon price at some time in the future, which is known as exercising the option. Options also have a maturity or expiration date. In Europe, options can only be exercised at their maturity date, whereas in the United States, options can be exercised any time during the contract (Nun & Arsenic, 2012). Another derivative solution is a futures contract.Futures contracts are an agreement to buy or sell an asset at an agreed-upon price in the future. Unlike options, futures contracts ar e standardized for an amount of the asset, and are usually transacted to exit the market. Hedgers avoid price variation in the market by and pass off risk to a speculator who will take a long or short position in the futures contract. The speculator is considered to be more willing to take on the price risk variation. Futures contracts are short-term and profits and losses are realized on a daily basis (Nun & Arsenic, 2012).Somewhat similar to a futures contract is a forward contract. Forwards are also a contract to buy or sell an asset at an agreed-upon price in the future, however, forward contracts have a specific maturity date unlike the daily settlements used in uterus contracts. Rather than being a standardized contract, forwards are tailor made to the needs of the participants. Also different than futures is that when trading forwards, forwards are often settled through the delivery of goods or cash (Nun & Arsenic, 2012).There are numerous other types of derivatives used to m itigate foreign exchange risk, but the most common are forward and futures contracts, futures options, and swaps which will be discussed later in this exam (Nun & Arsenic, 2012). Many Macs also participate in non-derivative methods for hedging transaction risk. These are often used if a firm has positions in less liquid currencies. In order to mitigate risk in these cases, cross-hedging is a common technique in which a firm will hedge a position in one asset by taking a position in another asset.Effectiveness of cross-hedging is highly dependable on the strength of the relationship between the commodity futures prices and the exchange rate (Nun & Arsenic, 2012). Another non-derivative method to avoid transaction exposure is hedging via lead and lag. A company can lead, to pay or collect on an invoice early, or lag, which means to pay or collect late. By timing the lead and lag strategy correctly, the firm can protect themselves against depreciation or appreciation of the foreign cur rency they are dealing in (Nun & Arsenic, 2012).Hedging through invoice currency can help firms diversify exchange exposure by using currency basket units. A currency basket is a selected group of currencies in which the weighted average is used as a measure of the value of a contract or obligation. It functions as a benchmark for regional currency movements. Because it is a portfolio of currencies, its value is more stable and can be useful as a hedging LOL, especially for long-term contracts where there are no forward or options contracts available (Nun & Arsenic, 2012).The last non-derivative form of transaction hedging that we will discuss is that of exposure netting. Exposure netting helps to centralize a firm's exchange exposure management function in one location, typically in a reinforce center. All invoices from nitrating transactions are sent here, where overall exposure is analyzed and determined. Foreign exchange experts can then determine the optimal hedging methods for the portfolio of transactions and move forward to implement them (Nun Arsenic, 2012). Overall, we have seen that there are numerous options to hedge transaction exposure.There are some similarities among them, but they differ from each other and are applicable to different needs. Derivative forms of hedging are typically contractual, relatively short term solutions to transaction exposure, whereas non- lifestyle. No matter what the case, however, it is prudent for any NC to determine a strategy for transaction hedging before going into significant overseas contracts. 3. Compare and contrast a plain vanilla currency swap with a plain vanilla interest rate swap. Describe and Justify a situation where a NC would use each type of swap.As discussed briefly above, swap transactions are a type of derivative used to mitigate currency exposure in forward trades. A swap is an agreement between two parties to exchange a sequence of cash flows over a period of time- a simultaneous sale of spot foreign exchange against a forward purchase of an equal amount of foreign currency (Nun & Arsenic, 2012). A plain vanilla interest rate swap is the most common and simplest type of swap. They are customized contracts that can be paid monthly, quarterly, yearly, or on a basis decided on by the firms involved.In a plain vanilla interest rate swap, one part agrees to pay the contract at a fixed interest rate, while the other party agrees to pay at a floating interest rate, and the two cash flows are paid in the same currency. The swap typically has a set date of maturity set at some point in the future (MacAfee, 2012). A plain vanilla currency swap, unlike the plain vanilla interest swap, interest and principal payments on a loan are exchanged in 2 currencies. In the plain vanilla currency swap, the two parties exchange payments at the beginning and end of the swap, which also differs from interest rate swaps (MacAfee, 2012).In the case of plain vanilla interest rate swaps, Macs or Mi ff would use these when they are paying a floating rate of interest on liabilities and earning a fixed rate of interest on assets. It can be highly risky for a firm to have such a mismatch between assets and liabilities. Therefore, the firm could use a plain vanilla interest rate swap to rectify the imbalance in their interest payments (MacAfee, 2012). For the case of the plain vanilla currency swap, a firm would be interested in conducting this type of swap when the firm wants to expand operations into another country, but has comparative advantage in its home country.The firm will likely have more favorable financing in its home country, and therefore could perform a currency swap with the country it is expanding into, and gain the necessary funds in the new currency to finance its startup and operations (MacAfee, 2012). 4. Discuss the issues and potential solutions for a NC contemplating foreign direct investment in a OLD. By definition, a NC or Multinational Corporation, is regi stered and/or has operations in more than one country. These types of firms engage in FED, or Foreign Direct Investment.FED is an investment made by a company based in one country onto a company or entity based in another country. Macs making direct investments typically have a significant degree of influence and control over the company into which the investment is made. Open economies with skilled workforces and good growth prospects tend to attract larger amounts of foreign direct investment than closed, highly regulated economies (www. Investigated. Com, 2014). FED can have numerous risks and obstacles for the NC involved. Olds, or Less Foreign direct investment can be an important source of employment opportunities for developing countries.However, anti-corporate advocates criticize Macs for entering Olds that have low human rights or environmental standards. They claim that multinationals give rise to large merged conglomerations that reduce competition and free enterprise, ra ise capital in host countries but export the profits, exploit countries for their natural resources, limit workers' wages, erode traditional cultures, and challenge national sovereignty. However, they remain attractive to investors due to low costs of labor, poorly enforced environmental and economic regulations, and inexpensive resources (www. Investigated. Com, 2014). Economic risk depends on the foreign country's financial state. A country with stable finances and a sound economy will be more attractive to foreign investors than one that has currency fluctuations and difficulty paying debt. Trade barriers and shareholder diversification issues can all be part of the economic risks taken on by a NC that is contemplating FED (Nun & Arsenic, 2012). Trade barriers can often be overcome by moving trade through other countries without trade restrictions.In the case of physical trade barriers, such as poor transportation, FED can be put into place to improve infrastructure and reduce tr ansportation costs (Nun & Arsenic, 2012). Political risk emerges when the political climate in a foreign country becomes unfriendly to investors. Political risk can be classified into three types: transfer risk, operational risk, and control risk. Transfer risk arises from uncertainty about cross border flows of capital and payments. Operational risk arises when the host country's policies affect the NC.Lastly, control risk is caused by uncertainty about the host country's policies regarding ownership and control of local operations (Nun & Arsenic, 2012). When contemplating investing in a OLD, the NC should take care to meticulously search and define the level of risk for doing business with the OLD they are considering, and also outline possible solutions in case of risk exposure. For example, those seeking more in-depth coverage of a particular country or region, two excellent sources of objective, comprehensive country information are the Economist Intelligence Unit and the Centr al Intelligence Agency World Fastback.Either of these resources provides an investor with a broad overview of the economic, political, demographic and social climate of a country. The Ell-J also provides ratings for most of the world's countries. These ratings can supplement those issued by Moody's, S and the other â€Å"traditional† ratings agencies (www. Investigated. Com, 2014). After completing the country analysis, the investing NC will have to decide on a sound investment approach. One of the recommended approaches is for the NC to invest in a broad international portfolio.Diversification is a fundamental principle of domestic investing, and is even more important when investing internationally. Even in a more concentrated portfolio, investments should be spread among several countries to maximize diversification and minimize risk (www. Investigated. Com, 2014). After deciding where to invest, an investor must decide which type of investment to enter. The choice of inve stment vehicle depends on each investor's individual knowledge, experience, risk profile and return objectives. When in doubt, it may make later.In addition to thoroughly researching prospective investments, an international investor also needs to monitor his or her portfolio and adjust holdings as conditions dictate. As in the U. S. , economic conditions overseas are constantly evolving, and political situations abroad can change quickly, particularly in emerging r frontier markets. Situations that once seemed promising may no longer be so, and countries that once seemed too risky might now be viable investment candidates (www. Investigated. Com, 2014). Final Exam The response to each question or statement is either True or False. 1. A business organized as a separate legal entity owned by stockholders is a partnership. 2. External users of accounting information are managers who plan, organize, and run a business. 3. Two primary external users of accounting information are investors and creditors. 4. Financing activities for corporations include borrowing money and selling shares of their own stock. 5.Income will always be greater under the cash basis of accounting than under the accrual basis of accounting. 6. The difference between unearned revenue and accrued revenue is that accrued revenue has been recorded and needs adjusting and unearned revenue has never been recorded. 7. Cash is a temporary account. 8. Bonding means insuring a company against theft by employees. 9. The treasurer should prepare and sign a check only after authorization to issue a check has been provided. 10. Using borrowed money to increase the rate of return on common stockholders' equity is called â€Å"trading on the equity.The extent of internal control features adopted by a company must be evaluated in terms of cost-benefit. 11. A good system of internal control will safeguard its assets and enhance the accuracy and reliability of its accounting records. 12. All reconciling items in determining the adjusted cash balance per books require the depositor to make adjusting Journal entries to the Cash account. 13. Cash equivalents include money market accounts, commercial paper, and U. S. Treasury bills held for ninety days or less. 14. A basic principle of cash management is to increase the speed of paying liabilities. 5.A cash budget contributes to more effective cash management. 16. A change in accounting principle occurs when the principle used in the current year is different from the one used by competitors in the current year. 17. If a company has sales of $110 in 2007 and $154 in 2006, the percentage decrease in sales from 2006 to 2007 i s 140%. 18. In a common size income statement, each item is expressed as a percentage of net income. 19. Profitability ratios are frequently used as a basis for evaluating management's operating effectiveness 20. Inventory turnover is a measure of equity that focuses on efficient use of inventory. 1 . The current ratio is a measure of all the ratios calculated for the current year. 22. From a creditor's point of view, the higher the total debt to total assets ratio, the lower the risk that the company may be unable to pay its obligations. 23. Alternative accounting methods affect the quality of earnings 24. Because pro formal earnings are based on specific rules, these amounts are highly reliable. Section II: Multiple Choice Choose your response from one of the possible answers provided. 26. A business organized as a corporation ). Is not a separate legal entity in most states. ). Requires that stockholders be personally liable for the debts of the business. C). Is owned by its stoc kholders. D). Has tax advantages over a proprietorship or partnership. 27. Which of the following is not one of the three forms of business organization? A). Corporations. B). Partnerships. C). Proprietorships. D). Investors. 28. An advantage of the corporate form of business is that a). It has limited life. B). Its owner's personal resources are at stake. C). Its ownership is easily transferable via the sale of shares of stock. ). It is simple to establish. 29.The group of users of accounting information charged with achieving the goals of the business is its a). Auditors. B). Investors. C). Managers. D). Creditors. 30. Which of the following is a primary user of accounting information with a direct financial interest in the business? A). Taxing authority b). Creditor c). Regulatory agency d). Labor union 31 . An income statement a). Summarizes the changes in retained earnings for a specific period of time. B). Reports the changes in assets, liabilities, and stockholders' equity ov er a period of time. C). Ports the assets, liabilities, and stockholders' equity at a specific date. ). Presents the revenues and expenses for a specific period of time. 32. Which financial statement is prepared first? A). Balance sheet b). Lonesome statement c). Retained earnings statement d). Statement of cash flows 33. Which one of the following is not a Justification for adjusting entries? A). AdJusting entries are necessary to ensure that revenue recognition principles are followed. B). AdJusting entries are necessary to ensure that the matching principle is followed. C). AdJusting entries are necessary to enable financial statements to be in conformity tit GAP. D).AdJusting entries are necessary to bring the general ledger accounts in line with the budget. 34. If a resource has been consumed but a bill has not been received at the end of the accounting period, then a). An expense should be recorded when the bill is received. B). An expense should be recorded when the cash is p aid out. C). An adjusting entry should be made recognizing the expense. D). It is optional whether to record the expense before the bill is received. 35. An adjusting entry would not include which of the following accounts? A). Cash b). Lintiest Receivable ).Property Tax Payable d). Unearned Revenue 36. At December 31, 2007, before any year-end adjustments, Boils Company's Prepaid Insurance account had a balance of $2,700. It was determined that $1,500 of the Prepaid Insurance had expired. The adjusted balance for Insurance Expense for the year would be a). $l ,500. 0. $2,700. D). $1,900. 37. Which one of the following is not an objective of a system of internal controls? A). Safeguard company assets b). Overstate liabilities in order to be conservative c). Enhance the accuracy and reliability of accounting records d).Reduce the risks of errors 38. Which one of the following would be considered a long-term solvency ratio? A). Receivables turnover b). Return on total assets c). Curre nt cash debt coverage ratio.