Product Design in Cyberspace Essay Example | Topics and Well Written Essays - 500 words

Product Design in Cyberspace - Essay Example This can facilitate them in their negative activities and can be a potential source of harm for the peace of the society as a whole. People who are in such professions that require use of GPS have little trouble accessing it even if it is not available through Ebay. However, others that are not in a position to purchase GPS from their local areas can easily purchase it on Ebay and use it for whatever purpose they want. There are many areas where people are supposed to get a license to keep a GPS with them because it is a potential source of help for criminals particularly when they want to perform their act in groups. Likewise, GPS software should also not be allowed to sell on Ebay because of the same reason as that for GPS device. Worst thing people have a problem with at Ebay: Worst thing people have a problem with on Ebay is that it does not allow sale of any kind of medication (Hubpages, 2011). Fake medicines are common in a lot of underdeveloped countries. In these countries, p eople produce false medicines in the name of real ones in order to make profits on the cost of customers’ life. People are highly skeptical about the quality of medicine they purchase. Medicines are already very costly.

Teaching English Language Essay Example | Topics and Well Written Essays - 4000 words

Teaching English Language - Essay Example In 1990, one in 20 public school students in grades K-12 was an English language learner (ELL), that is, a student who speaks English either not at all or with enough limitations that he or she cannot fully participate in mainstream English instruction. Today the figure is 1 in 9. Demographers estimate that in 20 years it might be 1 in 4. The ELL population has grown from 2 million to5 million since 1990, a period when the overall school population increased only 20 percent. By far, the majority of ELLs - 80 percent - are Spanish speakers" (Teaching English Language Learners, p3). CALP - (cognitive academic language proficiency) the dimension of proficiency in which a learner manipulates or reflects on the surface features of language in academic contexts, such as text-taking, writing analysis, and reading academic texts. The following definitions have been earmarked for further study: "Predictable and consistent classroom management routines, aided by diagrams, lists, and easy-to-read schedules on the board or on charts, to which the teacher refers frequently; Graphic organizers that make content and the relationships among concepts and different lesson elements visually explicit; Additional time and opportunities for practice, either during the school day, after school, or for homework; Redundant key information, e.g., visual cues, pictures, and physical gestures about lesson content and classroom procedures; Identifying, highlighting, and clarifying difficult words and passages within texts to facilitate comprehension, and more generally greatly emphasizing vocabulary development; Helping students consolidate text knowledge by having the teacher, other students, and ELLs themselves

Online Classes versus Traditional Classes Essay Example for Free

Online Classes versus Traditional Classes Essay Technology and education has given students many choices in how they obtain their education such as online classes. There have been numerous discussions recently about the success of online learning. The success of the online classes versus traditional classes is based upon the uniqueness of each individual way of learning. Online classes and traditional classes provide flexibility, direct communication and course materials. Studies have shown that online classes can be successful and that on average most students perform better than being in a traditional classroom. The argument of online classes and traditional classes; which is better than the other has many exceptional differences. One is the discussion of how does a person learn: is he a visual, auditory or kinesthetic learner? A visual leaner needs written materials, exercises and graphics. An auditory learner has to hear it, repeat it and needs to have a discussion. A kinesthetic learner needs real life simulations, hands on demonstration and needs to see how the principle works. Visual learners and kinesthetic learners most likely would be more successful in online courses because of the atmosphere it provides. Auditory learners would need to have traditional classes which would provide the best learning opportunity for their learning style. There are cases that individuals do not know how they learn best; an assessment should be given in the situation. The second discussion is flexibility. Online classes and traditional classes both can be just as flexible as the other. Online classes may seem more flexible but depending on the class the deadlines of each assignment may be very time consuming. Online classes sometimes provide more work than traditional classes. Traditional classes can be flexible due to the times that you select to take the classes. Schools are providing more night classes and early morning classes for the working and family-oriented students. Traditional classes provide more lecturing and sometimes more hands on in order to teach the concepts. The third discussion is communication. Online classes communicate by sending  and receiving emails. Some classes have chat rooms for discussions which provide the students opportunities to enrich their understanding of the course or subject being discussed. It also allows those individuals that normally would not speak in discussions to express their thoughts. The instant transfer of material is convenient for the students and professors to communicate. A traditional class allows students to verbally exchange ideas and ask questions directly to the professors. Sometimes this environment does not allow the students to fully express themselves due to time constraints. Some people feel that there are communication barriers in a face to face classroom setting due to time and class structure. (Anderson) One of the most important debates between the two classes is the course materials. The question has been asked if the online course is giving adequate material to teach an individual a lesson. Studies show that online professors give more than enough resources to express the subject and also gives practice graded material to ensure that the student understands. Traditional classes have been accused of doing the opposite and taking for granted that the students are in their presence and extra resources are sometimes a rarity. Online classes allow a person to minimize their distractions and it gives them the ability to fully concentrate on the material they are presented with. A person that enrolls in an online course should be self-motivated in order to be in an environment that requires the individual to monitor themselves and be responsible to handle the course as if it was a traditional course. (Kassop) Online courses provide the ability to be accessible at all times but the work that is required should be quality work. The students’ writing ability will enhance because this is their only form of communication. (Kassop) The professors do not expect students to procrastinate because of the accessibility but the possibility is there. The professors of these courses expect more from the online students since there are not time restraints. Online students have the ability to form small groups to relate to because the workload in online course is difficult. The workload is believed to be difficult be cause of the apparent reason of teaching themselves. Traditional classes allow students social interaction which is a vital piece for many students. There is a set amount of time in a classroom setting and there is limited one on one interaction with the professor. Professors have the ability to read their students body language to assure them if the material or concept is being understood by his or her students. Traditional classes also allow students to get behind if they miss a day or an assignment. The traditional classroom allows the students to strengthen various areas of their social skills such as verbally expressing themselves in classroom discussions. There are differences and similarities in online courses and traditional courses. Throughout are reading and research there can be two conclusions: 1. Online courses are better than traditional courses if the individual is discipline to take the course. 2. Online courses and traditional courses are just as good as the other because they both have the same goals and are achieving the goals to the students that are willing to receive. Works Cited Anderson, Terry, Elloumi, Fathi Theory and Practice of Online Learning (eds.) (2003) http://cde.athabascau.ca/online_book Angiello, Roanne. Study Looks at Online Learning vs. Traditional Instruction. Education Digest 76.2 (2010): 56-59. Academic Search Premier. EBSCO. Web. 30 Nov. 2010. Diaz, D.P., Cartnal. R.B. Students learning styles in two classes: Online distance learning and equivalent on-campus. College Teaching 47(4), 130-135 Kassop, Mark. The Technology Source. May/June 2003. 6 August 2011

Hang Up and Drive Essay -- Persuasive, social reform, Argumentative, c

Imagine my typical workday commute on a casual mid-morning. I’ll be dressed and ready to make the ten mile drive from Vancouver to Portland for work. As I turn the key and back out, I slam the brakes as a green late model Sienna almost T-bones me when I'm clearly half-way out the street. I glare back, like any driver would, and see she is still talking on her phone making her way around me like I was a minor obstacle in her day. I drive out the neighborhood and make my way to the interstate. At the next intersection I get stuck at a light that just turns green while a kid, I can see the â€Å"Class of 2010† writing all around the car, has their head down tapping a text message out and looks up after I chirp my horn. By this time i've developed a touch of impatience that's working its way to road rage and its getting fueled by my commute that brings me across the Glen Jackson Bridge. Numerous times I see the â€Å"triangle†, which is the â€Å" i'm on the phone multi-tasking and I forgot how to drive† pose. I finally make it into work at my last wits. I start to walk in when I almost get mowed down by a fellow coworker. This is the point where I call in to work cause I need a mental health day. Everyone described is the sum product of the problem of driving while using a cell phone. This day was not a dramatization but more of a realization of a problem we have here in the Portland Metro Area. I feel on this short commute my anger was not directed at any certain demographic. There is no age, pay grade, religious affiliation associate with my rage. It is that my fellow commuters disregard their local laws while using their cell phone. My solution would be charge a cell phone user with a primary traffic infraction and implement current technol... ..., David, Frank Drews, and Dennis Couch. "A Comparison of the Cell Phone Driver and the Drunk Driver." A Comparison of the Cell Phone Driver and the Drunk Driver. University of Utah, 04 Mar. 2005. Web. 28 Feb. 2010. . Repko, Melissa. "Oregon Senate passes bill banning driving while using hand-held cell phone | Oregon Local News - OregonLive.com." Oregon Local News, Breaking News, Sports & Weather - OregonLive.com. The Oregonian, 23 June 2009. Web. 01 Mar. 2010. . "Cell Phone Subscribers in the U.S., 1985–2008 Infoplease.com." Infoplease: Encyclopedia, Almanac, Atlas, Biographies, Dictionary, Thesaurus. Free online reference, research & homework help. Infoplease.com. Web. 01 Mar. 2010. .

Cardiovascular Disease

Cardiovascular disease is a general name for a wide variety of diseases, disorders and conditions that affect the heart and sometimes the blood vessels as well. Risk factors for developing cardiovascular disease include having hypertension, diabetes, high cholesterol, obesity, and a sedentary lifestyle. Other risk factors include being of African-American ancestry, male, drinking excessive amounts of alcohol, having a lot of long-term stress, smoking and having a family history of a heart attack at an early age.Some different types of cardiovascular disease includes angina, heart attack, heart failure, atherosclerosis, cardiovascular disease, and cardiac arrhythmias. Other forms of cardiovascular disease include congenital heart defects, cardiomyopathy, infections of the heart, coronary artery disease, heart valve disorders, myocarditis, and pericarditis. Symptoms of cardiovascular disease vary depending on the specific type of cardiovascular disease. A classic symptom of cardiovascu lar disease is chest pain.However, with some forms of cardiovascular disease, such as atherosclerosis, there may be no symptoms in some people until life-threatening complications. Treatment of cardiovascular disease begins with prevention. Many forms of cardiovascular disease can be prevented or controlled effectively with prevention measures that include regular exercise, not smoking or drinking excessively, achieving and maintaining a healthy weight, and eating a heart-healthy well-balanced diet. Risk factors, such as high cholesterol, diabetes, and hypertension can be prevented or controlled through these lifestyle changes, regular medical care and/or medication.Heart disease can be improved — or even prevented — by making certain lifestyle changes. The following changes can help anyone who wants to improve his or her heart health: Stop smoking. Smoking is a major risk factor for heart disease, especially atherosclerosis. Nicotine constricts blood vessels and force s your heart to work harder, and carbon monoxide reduces oxygen in your blood and damages the lining of your blood vessels. If you smoke, quitting is the best way to reduce your risk of heart disease and its complications.Control your blood pressure. Ask your doctor for a blood pressure measurement at least every two years. Check your cholesterol. Ask your doctor for a baseline cholesterol test when you're in your 20s and then at least every five years. Keep diabetes under control. If you have diabetes, tight blood sugar control can help reduce the risk of heart disease. Get moving. If you have heart disease, exercise helps you achieve and maintain a healthy weight and control diabetes, elevated cholesterol and high blood pressure — all risk factors for heart disease.If you have a heart arrhythmia or heart defect, there may be some restrictions on the activities you can do, so be sure to talk to your doctor first. With your doctor's OK, aim for 30 to 60 minutes of physical ac tivity most days of the week. Even if you can't make time for one 30- to 60-minute exercise session, you can still benefit from breaking up your activity into several 10-minute sessions. Eat healthy foods. A heart-healthy diet based on fruits, vegetables and whole grains — and low in saturated fat, cholesterol and sodium — can help you control your weight, blood pressure and cholesterol.Eating one or two servings of fish a week also is beneficial. Maintain a healthy weight. Being overweight increases your risk of heart disease. Weight loss is especially important for people who have large waist measurements — more than 40 inches (101. 6 centimeters, or cm) for men and more than 35 inches (88. 9 cm) for women — because people with this body shape are more likely to develop diabetes and heart disease. Manage stress. Reduce stress as much as possible. Practice healthy techniques for managing stress, such as muscle relaxation and deep breathing. Practice good hygiene habits.Staying away from other people when they are sick and regularly washing your hands can not only prevent heart infections but also can help prevent viral or bacterial infections that can put stress on your heart if you already have heart disease. Also, brushing and flossing your teeth regularly can prevent germs in your mouth from making their way to plaques in your heart, which could worsen cardiovascular disease. Get a flu shot. If you have cardiovascular disease, you're at a greater risk of having a heart attack should you catch the flu. Getting a flu shot decreases this risk. Cardiovascular Disease Cardiovascular disease is a general name for a wide variety of diseases, disorders and conditions that affect the heart and sometimes the blood vessels as well. Risk factors for developing cardiovascular disease include having hypertension, diabetes, high cholesterol, obesity, and a sedentary lifestyle. Other risk factors include being of African-American ancestry, male, drinking excessive amounts of alcohol, having a lot of long-term stress, smoking and having a family history of a heart attack at an early age.Some different types of cardiovascular disease includes angina, heart attack, heart failure, atherosclerosis, cardiovascular disease, and cardiac arrhythmias. Other forms of cardiovascular disease include congenital heart defects, cardiomyopathy, infections of the heart, coronary artery disease, heart valve disorders, myocarditis, and pericarditis. Symptoms of cardiovascular disease vary depending on the specific type of cardiovascular disease. A classic symptom of cardiovascu lar disease is chest pain.However, with some forms of cardiovascular disease, such as atherosclerosis, there may be no symptoms in some people until life-threatening complications. Treatment of cardiovascular disease begins with prevention. Many forms of cardiovascular disease can be prevented or controlled effectively with prevention measures that include regular exercise, not smoking or drinking excessively, achieving and maintaining a healthy weight, and eating a heart-healthy well-balanced diet. Risk factors, such as high cholesterol, diabetes, and hypertension can be prevented or controlled through these lifestyle changes, regular medical care and/or medication.Heart disease can be improved — or even prevented — by making certain lifestyle changes. The following changes can help anyone who wants to improve his or her heart health: Stop smoking. Smoking is a major risk factor for heart disease, especially atherosclerosis. Nicotine constricts blood vessels and force s your heart to work harder, and carbon monoxide reduces oxygen in your blood and damages the lining of your blood vessels. If you smoke, quitting is the best way to reduce your risk of heart disease and its complications.Control your blood pressure. Ask your doctor for a blood pressure measurement at least every two years. Check your cholesterol. Ask your doctor for a baseline cholesterol test when you're in your 20s and then at least every five years. Keep diabetes under control. If you have diabetes, tight blood sugar control can help reduce the risk of heart disease. Get moving. If you have heart disease, exercise helps you achieve and maintain a healthy weight and control diabetes, elevated cholesterol and high blood pressure — all risk factors for heart disease.If you have a heart arrhythmia or heart defect, there may be some restrictions on the activities you can do, so be sure to talk to your doctor first. With your doctor's OK, aim for 30 to 60 minutes of physical ac tivity most days of the week. Even if you can't make time for one 30- to 60-minute exercise session, you can still benefit from breaking up your activity into several 10-minute sessions. Eat healthy foods. A heart-healthy diet based on fruits, vegetables and whole grains — and low in saturated fat, cholesterol and sodium — can help you control your weight, blood pressure and cholesterol.Eating one or two servings of fish a week also is beneficial. Maintain a healthy weight. Being overweight increases your risk of heart disease. Weight loss is especially important for people who have large waist measurements — more than 40 inches (101. 6 centimeters, or cm) for men and more than 35 inches (88. 9 cm) for women — because people with this body shape are more likely to develop diabetes and heart disease. Manage stress. Reduce stress as much as possible. Practice healthy techniques for managing stress, such as muscle relaxation and deep breathing. Practice good hygiene habits.Staying away from other people when they are sick and regularly washing your hands can not only prevent heart infections but also can help prevent viral or bacterial infections that can put stress on your heart if you already have heart disease. Also, brushing and flossing your teeth regularly can prevent germs in your mouth from making their way to plaques in your heart, which could worsen cardiovascular disease. Get a flu shot. If you have cardiovascular disease, you're at a greater risk of having a heart attack should you catch the flu. Getting a flu shot decreases this risk.

Born On January 30Th, 1882, In Hyde Park, New York, Franklin

Born on January 30th, 1882, in Hyde Park, New York, Franklin Delano Roosevelt soon became arguably the most influential president in United States history. Roosevelt was the only president to be elected to four terms. He led the United States through some of its most difficult struggles, including the Great Depression and World War II. Roosevelt also was very set on expanding presidential power, which he did through his New Deal Program. Born into a rich family, a family well-known in several generations, Roosevelt was an only child. The Roosevelts lived in the Hudson River Valley. Franklin Roosevelt grew up with privilege. He was educated through tutors up until age 14, and he was the household’s center of attention. In 1896, Roosevelt†¦show more content†¦Roosevelt specialized in business operations. The founder of the U.S. Naval Reserve, he was restless as a subordinate to the Secretary of the Navy. In 1914, Roosevelt decided to run for U.S. Senate for the state of New York. He lacked support from Wilson, as Roosevelt had made far too many political enemies among New York Democrats. Roosevelt was easily defeated in the primary. Roosevelt found much success both personally and professionally in politics. Women found him attractive, which led to an affair with Eleanor Roosevelt’s social secretary. Eleanor ordered him to stop seeing Lucy Mercer, or she would file for divorce. Although he agreed, he continuously saw her throughout many years. Roosevelt later accepted the nomination of vice president for James M. Cox in 1920. Warren G. Harding defeated them, but Roosevelt gained national attention. Shortly after, Roosevelt received wind that he had contracted poliomyelitis, or polio, which meant permanent paralysis. He moved to Warm Springs, Georgia, to try to treat this disease, but never regained use of his legs. Roosevelt feared that a polio diagnosis would mean the end of his political career. Encouraged by his friends and family, he worked to gain physical strength and improve his image. He decided to learn to walk with braces and hide his wheelchair. He also began to find peace with his New York enemies. Roosevelt appeared in the 1924 and 1928 DNCs to nominate Al Smith for president, which gained him nationalShow MoreRelatedThe Life of Franklin D. Roosevelt1005 Words   |  5 PagesA mention of the name, Roosevelt D. Franklin to most Americans, rekindles the memories of the Second World War, the Manhattan projects and the subsequent bombing of two Japanese cities. What most of these people fail to understand is that Roosevelts presidency was the Second World War. Turth be told, Roosevelt is one the greatest presidents the United States ever had based on his personality and the challenges he faced while in the White House. This paper discusses a number of aspects about oneRead MoreA Man With No Bounds Essay1005 Words   |  5 PagesFranklin D. Roosevelt he is not just a person, he is a legacy the way he approached problems in his time â€Å"in charge†. The way he spoke to people was just outright amazing, like in his Infamy Speech after Pearl Harbor when he said, â€Å"With confidence in our armed forces, with the unbounding determination of our people, we will gain the inevitable triumph -- so help us God.† While in his long presidency, Franklin D. Roosevelt was considered by many, a amazing president who made all the right decisionsRead MorePearl Harbor : A Gateway Of Stren gth For Our Nation1381 Words   |  6 Pagesspeeches given by an influential American figure to impact the course of history itself. Whether it is a tragedy or an event to celebrate, the speeches given are a passage to a change in history for better or worse. In the â€Å"Pearl Harbor Address,† Franklin D. Roosevelt used parallel structure, rhetorical appeals, and diction to portray his strong opposing sentiments toward the catastrophic acts that occurred in Pearl Harbor, and changed American history course by declaring war against the Japanese

How Socially Useful Is Banking - Free Essay Example

Sample details Pages: 6 Words: 1712 Downloads: 9 Date added: 2017/06/26 Category Finance Essay Type Analytical essay Did you like this example? For many companies in the real estate property development, the cost of construction equipment constitute the single most largest cost that can not be factored in to the final property price. Under current economic conditions, especially with respect to the housing market, developers must search every avenue for opportunities to minimize costs and maximize returns. Property developers have three basic options for meeting construction equipment needs needs: purchase the needed equipment, lease the needed equipment, or custom hire. Don’t waste time! Our writers will create an original "How Socially Useful Is Banking" essay for you Create order Custom hire may work well for certain jobs, but often does not allow the amount of control many operations require. Like purchasing, leasing allows the real estate developer to maintain control of the timeliness and quality of the work conducted on their operation. Therefore real estate developer should evaluate leasing versus purchasing based on the economic opportunities that each provides. Discussion: Most leases consist of four basic components: ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¢ Periodic payment ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¢ Length of lease ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¢ Amount of use (hours, miles, etc.) ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¢ Residual Under a standard lease agreement, the lessee (real estate developer) agrees to pay the lessor (bank, credit corporation, dealer, etc.) a specified amount (payment) at certain intervals over a certain length of time. Three-year leases with annual payments are very common, but any arrangement is possible. The lease will generally specify the amount of annual use permitted under the base contract. The amount needed to purchase the equipment at the end of the lease is the residual. Any and all of the components are negotiable. Lease arrangements are based on an initial price for the equipment. As with purchases, developers should negotiate the best deal possible, then consider whether to lease or purchase based on the negotiated price. Just as a lower negotiated price lowers the costs associated with a purchase, a lower negotiated price lowers the costs associated with a lease. Once the initial price has been established, the components of the lease can be finalized. Ideally for a real estate developer the lease agreement should be such that it fits their projects needs. It is imperative for the developer to evaluate the lease contracts for use levels above and below the expected use in order to determine the most economic level. The length of the lease should be determined by the needs of the project at hand. Consideration should be given to the length of time the equipment will be needed, the ability or desire to operate machinery past warranty, planned changes in the project (termination, expansion, etc.), and residual value. The residual is often the confusing part of a lease. The residual is the amount owed on the equipment at the end of the lease. Generally, the lessee may purchase the equipment for the residual value. The lease will often be designed so the residual is equal to the expected appraised value of the machinery at the end of the lease. The periodic lease payments will reflect the amount of the equipment used up during the lease term. Therefore, additional costs associated with excessive wear (hours, miles, etc.) or abuses over and above those designated in the base lease are usually quite expensive. Of course, the residual and the lease payments reflect a lease factor or discount rate. This discount rate may or may not be consistent with the interest rate of a purchase. If the desire is to purchase the equipment after the lease period, then the lessee may try to negotiate a lower residual as a result of higher payments. Depending on an individuals tax situation, this may be an attractive option; however, the tax man will not allow tax credits for leases if up front consideration is given to purchasing. Cost comparison example: When an asset is leased, the lessee loses the tax benefits of depreciation and interest associated with purchasing. However, the real estate developer can still deduct the full amount of the lease payment from taxable income as an operating expense. Determining which alternative provides the greater tax benefit is where the decision becomes most complicated. As a precaution, be sure to consult your accountant before signing a lease. There are a variety of leases, and many ways to interpret them for tax purposes. Most tax benefits associated with leasing and purchasing occur in the future. Therefore, the net cost of each alternative should be analyzed in terms of present dollars. Net present value (NPV) techniques can be used to compare the two options. In other words, the question of whether to lease or borrow can be answered by comparing the present values of the net cash outflows of lease payments and loan payments. In a lease versus purchase decision, the option with the lowest ne t present value of expense should be chosen. Choosing between Leasing and Purchasing: Getaway Real estate developers pay corporate tax at the rate of 40%. They need to purchase construction equipment to expand their business given they are still a small start up. Getaway employs the Modified Accelerated Cost Recovery System (MARCS) 150% declining balance method to compute depreciation. The construction equipments costs $1,250,000 and have a life of seven years. Getaway could either borrow and buy the equipments or lease them. Since insurance, taxes, fees and normal maintenance costs apply whether the equipment is leased or purchased, this are ignored in the analysis. Buy and borrow option; For this option, the underlying assumption is that Getaway will borrow the funds from a financial institution. The interest rate applicable is 8.75% and the financial institution requires a down payment of 25% to finance the deal. The repayment period will be for the life of the equipment-seven (7) years. Given that interest is a tax-deductable expense, it is necessary to calculate the annual interest that accrues on the borrowed money. Thus the yearly loan payment is calculated on the basis of equal loan and principal payments. Lease option; Getaway can get a lease contract for an annual payment of $208,440. This yearly payment was derived from a lease factor of 0.16675 provided by the lessor. Additionally, the terms put the lease time frame to be seven (7) years with a ten (10) percent residual at the end of the lease. The NPV of the lease expenditure-construction equipment; Year Tax Payment Cash Benefit PIVF Outflows PV of Cash @ 5% Outflows 0 208,440.00 208,440.00 1.000 208,440.00 1 208,440.00 97,133.00 111,307.00 0.952 105,964.26 2 208,440.00 97,133.00 111,307.00 0.907 100,955.45 3 208,440.00 97,133.00 111,307.00 0.864 96,169.25 4 208,440.00 97,133.00 111,307.00 0.823 91,605.66 5 208,440.00 97,133.00 111,307.00 0.784 87,264.69 6 208,440.00 97,133.00 111,307.00 0.746 83,035.02 7 125,000.00 97,133.00 27,867.00 0.711 19,813.44 Totals 1,584,080.00 679,931.00 904,149.00 793,247.77 The tax benefit of lease payments is given in column 3 and is arrived at by multiplying the lease payments in column 2 with the tax rate (46.6%). The Cash outflow in column 4 is the lease payment less the tax benefit. A present value of 5% is used to discount the cash outflows. Note that 5 percent is the after-tax cost of borrowing at 8.75 percent (8.75 % x (1- 0.466) = 5%). The reason for using 5 percent for the after-tax cost of borrowing is that the cash outflows include the tax benefit. To avoid counting the tax benefit twice, cash outflows should always be discounted at an after-tax rate, which in this example is about 5 percent. This method of determining to use 5 percent is debatable, but preferred. In some cases, the current rate of inflation is used. The total present value of the lease option is $793,248. NPV (in $) of Purchase with Equal Principal Payments Construction equipment (Loan Amount: $937,500) Year Loan Payment Interest Depreciation Ded. Exp @46.6% Tax Benefit per month Net Loan @ 5% PV Repayment after tax PV of Loan after Tax 0 312,500.00 1.00 312,500.00 1 215,960.00 82,030.00 133,930.00 215,960.00 100,630.00 115,322.60 0.952 109,787.20 2 204,240.00 70,310.00 239,130.00 309,440.00 144,199.00 60,041.00 0.907 54,457.20 3 192,520.00 58,590.00 187,880.00 246,470.00 114,855.00 77,665.00 0.864 67,102.50 4 180,800.00 46,880.00 153,130.00 200,010.00 93,204.70 87,595.30 0.823 72,091.00 5 169,080.00 35,160.00 153,130.00 188,290.00 87,743.10 81,336.90 0.784 63,768.10 6 157,370.00 23,440.00 153,130.00 176,570.00 82,281.60 75,088.40 0.746 56,015.90 7 145,650.00 11,720.00 153,130.00 164,850.00 76,820.10 68,829.90 0.711 48,938.10 1,578,120.00 328,130.00 1,173,460.00 1,501,590.00 699,733.50 565,879.10 784,660.00 NPV (in $) of Purchase with Equal Payments Center Pivot (Loan Amount: $937,500) Year Loan Payment Interest Depreciation Ded. Exp @46.6% Tax Benefit per month Net Loan @ 5% after Tax PV Re-payment PV of Loan after Tax 0 312,500.00 1.000 312,500.00 1 184,710.00 82,030.00 133,930.00 215,960.00 100,637.40 84,072.60 0.952 80,037.20 2 184,710.00 73,050.00 239,130.00 312,180.00 145,475.90 39,234.10 0.907 35,585.30 3 184,710.00 63,280.00 187,880.00 251,160.00 117,040.60 67,669.40 0.864 58,466.40 4 184,710.00 52,650.00 153,130.00 205,780.00 95,893.50 88,816.50 0.823 73,096.00 5 184,710.00 41,090.00 153,130.00 194,220.00 90,506.50 94,203.50 0.784 73,855.50 6 184,710.00 28,530.00 153,130.00 181,660.00 84,653.60 100,056.40 0.746 74,642.10 7 184,710.00 14,860.00 153,130.00 167,990.00 78,283.30 106,426.70 0.711 75,669.40 1,605,470.00 355,490.00 1,173,460.00 1,528,950.00 712,490.80 580,479.20 783,851.90 Including the down payment in the cash outflows for each loan scenario, total outlay is $1,578,120 and $1,605,470. This establishes the purchase option with the lowest cash outlay. The lease will have seven (7) payments of $208,440. Typically, the first payment is due at signing, which is assumed in this example. Also, as mentioned earlier, the lease includes a residual ($1,250,000) which is 10 percent of the entire principal of $1,250,000. Because center-pivots are used in this discussion, assume that the farmer will pay the residual and thus own the pivot at the end of the lease. Again, paying the residual is optional. If the farmer decided not to pay this, the lessor would retain ownership of the center-pivot. Thus, with the residual payment included, total cash outlay for the lease is $1,584,080. Given the analysis, it would seem obvious that the lease would be preferable to a fully amortized loan and only $5,960 less preferable than a loan with equal principal payments. However, the final decision should be made using the net present value approach. Net Present Value of Loan Payments In NPV of Purchase with Equal Principal Payments table and NPV of Purchase with Equal Payments, column 2 gives the annual loan repayment from which the tax benefit of interest and depreciation should be deducted. The tax benefit, as shown in column 6, is calculated by multiplying the interest and depreciation expenses by the tax rate of 46.6 percent. By subtracting the tax benefit from the annual loan repayment, the loan repayment after tax is shown in column 7. In column 9, the present value of loan repayments has been determined, using the present value interest factor of 5 percent, to obtain a total value of $784,660 for a loan with equal principal payments and $783,852 for a loan with equal payments. As stated earlier, the decision process is: 1. If NPV lease NPV purchase, borrow and buy the equipment. 2. If NPV lease NPV purchase, lease the equipment. Because the present value of the purchase expenditure $784,660 or $783,852 is lower than $793,248 (lease), the purchase option is more economical. XYZ Farms could save as much as $940 in current dollars by purchasing rather than leasing the pivots ($793,248-$783,852=$9,396). Obviously, $9,396 is not a significant savings for this level of investment. However, this analysis has exposed some points for consideration. For example, it is easy to say that the cash expense of the lease option is $2,139 less than a fully amortized loan ($1,605,470-$1,584,080 = $21,390, Column 2 in Tables 1 3). One could also say it would be $596 less expensive to structure a loan with equal principal payments ($1,584,080-$1,578,120 = $5,960). However, simply looking at the cash outlay for each alternative is only scratching the surface. Consideration must be given to the tax benefits of both leasing and purchasing. In the example, purchasing proved to be the best choice over leasing, no matter how the loan payments were structured