Organization Shall Ziaratgul Choose Finance Essay - Free Essay Example

As Ziarat gull dont have the required capital and financial resource to start up his business he would need external finance here to start new business he can borrow money from his friends and family. Friends and family who are helpful of the business idea offer money either directly to the Ziarat gull or into the business.   This can be faster and inexpensive to arrange (definitely compared with a regular bank loan) and the interest and payment terms can be more flexible than a bank loan. The other way which will help him to raise findings is the capital brought in to the business by the partners. Leasing is the other option which will help him to raise funds for his venture. Leasing a form of rental he can take assets like vehicles, computers, tracking systems and office equipments on lease. A lease is an treaty between two parties the lessee and lessor. Lessor is the one who owns the assets and give his asset on lease. Lessee is the one who takes an asset on lease and in return make payments to the lessor. Task for p3: Please justify what will be the implications of your Choices suggested for question 1 2? There are going to be advantages and disadvantages of both the type of organization chosen by Ziarat gull that is partnership and the sources of finance through which he raises funds for his new venture that is borrowing from and family and leasing. Advantages of partnership ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¢Partnerships are comparatively easy to start. ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¢ With more than one owner, the capability to raise funds can be increased, together because two or more partners may be able to contribute more capitals and because their borrowing ability may be larger. ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¢ Potential employees may be attracted to the business if given the motivation to become a partner. ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¢ A partnership may benefit from the mixture of complimentary talents of two or more persons. There is a broader pool of knowledge, skills and links. ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¢ Partnerships can be cost-effective as every partner specializes in certain parts of their business. ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¢ Partnerships provide moral support and will let for additional creative brainstorming. Disadvantages of partnership ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¢ Business partners are jointly and individually liable for the activities of the other partners. ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¢ Profits need to be shared with others. You must to decide on how you worth each others time and skills. What occurs if one partner can put in less time due to private situations? ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¢ Since decisions are shared, differences can arise. A partnership is for the long term, and expectations and conditions can vary, which can lead to dramatic and disturbing split ups. ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¢ The partnership may have a narrow life; it may finish upon the withdrawal or death of a partner. ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¢ A partnership often has limitations that keep it from becoming a huge business. ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¢ You have to consult your partner and discuss more as you cannot make decisions by yourself. You thus need to be more flexible. ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡  ¬Ãƒâ€šÃ‚ ¢ A key disadvantage of a partnership is unlimited liability. Overall partners are liable without limit for all debts contracted and faults made by the partnership. For instance, if you own only 1 percent of the partnership and the business flops, you will be called upon to pay 1 percent of the bills and the other partners will be assessed their 99 percent. Though, if your partners cannot pay, you may be called upon to pay all the debts even if you must sell off all your properties to do so. This makes partnerships too dangerous for most circumstances. Advantages of borrowing from friends and family Speed ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¢One advantage of borrowing money from friends and family lies in its comparative speed in contrast to borrowing from traditional lending institutes. Borrowing money to start a business can take weeks or months when going through a bank; friends and family fellows may be ready to cut a check on the spot, based on the level of urgency involved or how much money you are requesting. Friends and family members can also simply pick up the telephone to request an instant bank transfer, with loans arriving in your account just a few hours later. Processing ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¢When borrowing money from banks and other groups, youll normally have to show bulks of documentation proving to your credit worthiness. This may include gathering old bank statements, check stubs; tax returns even divorce papers and bankruptcy documents. Reference checks, several meetings with credit specialists and other hoops can make the procedure quite lengthy. An advantage to borrowing money from friends and family fellows is that the procedure is less complex. As they know and trust you, you will have less to prove before borrowing can still take place. Interest ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¢Another advantage to borrowing money from friends and family is that you will likely pay lower interest rates and processing fees, making it inexpensive and speedier to pay back the loan. And certain friends and family members might decide not to charge interest at all. Altruism ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¢Friends and family may take pride in lending you money for a worthy pursuit, such as beginning a business. This sense of altruism is the other advantage of borrowing money from loved ones. They will feel invested in your forthcoming success and will enjoy having played a vital part in helping you achieve your dreams. Disadvantages of borrowing from friends and family No Credit Reporting ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¢When you take a loan from a bank, the lender can report your payment history to a credit agency. If you did not make timely payments and does not pay off the loan as agreed, it can negatively affect your credit score. However if you get a loan from a family member not from a bank, that info is not reported to credit agency. Reputation One of the disadvantages of borrowing from a family member is that if you default on the loan, your monetary reputation is not the only issue at stake. If you cannot return the loan as promised your family reputation is at danger as well. Borrowing from a family member can lead to suspicion and conflict disputes among family members if the debt is not repaid. Advantages of leasing (I) No Large Outlay The major advantage of leasing equipment is that the cost is spread over a number of years; there is no necessity for you to pay the whole amount upfront. This can significantly help uphold cash flow, which is serious to all businesses. Poor cash flow is the chief cause of business flops, and leasing can help you to keep it under well control. Leasing can also let you to use better equipment e.g. A more efficient ,faster ,more accurate product that would be very much expensive to buy outright. (ii) Security When you lease a product, it is still owned by the leasing firm, which means that they have better security on your finance. This means you are not likely to need any more security to be able to start a leasing contract, and so you have a much better chance of approval (passing the credit check) than with other methods of finance. (iii) Tax Advantages Lease rentals are considered as an working cost, which means that it is frequently possible to subtract them from taxable profits as a trading expense. Though, you should always check that the equipment which you are buying is qualified before agreeing to a contract. (iv) Budgeting As a lease agreement is almost always a fixed contract, it is quite easy to budget and estimate with. The amount can be functioned into your businesses budget much easily than an unevenly happening lump sum; allowing you to keep a much better control over present and future cash flow. In the event that you need an item substituting speedily, you can do so with a comparatively slight monthly adjustment to the budget, instead of a lump sum that could extremely harm cash flow. Disadvantages of leasing (I) No Ownership The chief disadvantage of leasing is that you never own the merchandise. It remains the property of the leasing company through and after the lease. As you do not own the merchandise, you are not able to sell it in the event it is no longer required, and you cannot upgrade to a newer or better product without either paying off the remaining contract, or paying a huge fee to abandon the contract. You also need to keep on paying a lesser lease cost, even after the cost of the equipment has been completely covered. (ii) Long Term Expense Although leasing allows you to evade paying a huge lump sum, over a long period of time it often works out considerably much more expensive. Over the passage of a standard lease, you pay the cost of the equipment and also the leasing companies charges. After the lease ends you need to keep on paying rental to use the product. This means that over a number of years, you will pay more than the real cost of the equipment without ever really owning it. (iii) Maintenance Even though you do not own the equipment that you lease, you are still accountable for its maintenance and repair. Unless you have specifically skilled and trained workers to fix the equipment, then this could prove very expensive in the event of a serious error. Certain leasing companies will allow you to cover the maintenance and repair charges for an additional sum. This is added to the monthly leasing cost. This will increase your monthly expenditures. Task for M1: How shall the fund be raised in this new Scenario? In order to expand their business they would need other sources of financed which are shown in the graph below imagesCA29DE9D.jpg Retained Profits: This is a source of finance that would only be available to a firm that already exists. Profits from a firm can be used by the owners for their own personal use The owner of Ziarat Gul bus services will have to decide what the best alternative for their business is. In the early stages of their growth, it may be necessary to put back a lot of earnings into the business. This finance can be used to buy new equipment and machinery or raw materials and hopefully make the business more efficient and profitable in the future Floating shares on stock market. Their business is already running successfully and they want to expand their business so they float their shares on to the stock exchange market to generate revenue which they can use to expand their business. Share capital is the money invested in a company by the shareholders. Share capital is a long-term source of finance. In return for their investment, shareholders gain a share of the ownership of the company. Plan and Savings: The owner of Ziarat Gull Bus services should consider business revenue as a source for financing. Make an expansion plan and then forecast how long it will take the business to save the money needed to finance it. If the schedule for expansion and the money saving forecast are well-matched, then plan on using business money to pay for the expansion. Tanks for M2: What shall be the modification in its legal status as a registered company? First it was Ziarat Gul Bus Service but to raise the finance Ziarat had to float his shares on the stock market, for that he had to bring some changes to the business. That is he gave his business a legal status to the business, hence the business is now called Ziarat Gul Bus service (pvt) ltd. This is because the control still lies in the hands of the owner as he had retained 51% of the shares of his business and floated 49% lies in the hands of shareholders Task for M3: Which Stock Exchange in Pakistan should it register with? Or why should it choose between ISE, LSE and KSE? They should choose KSE (Karachi stock exchange) because it has the most listed companies compare to the other stock exchange in Pakistan. Advantages: They will more opportunities in KSE. More effective trading. Huge market to float shares in. Large number of brokers. karachi_stock_exchange_20060904.jpg Task for D1: Will Mr. Ziarat Gul and his newly named company directly approach the share holders or is there a mechanism mentioned in your book that facilitates this process? Since Ziarat Gulls business is now a private limited company and has a legal status , he can now sell his business shares on the stock market. To reach the share holders he would have to go through a whole chain or path of the stock exchange. They will first go to over the counter(OTC) their shares will be floated on OTC. This is becouse this business is a newly established business and they cant compet with the other huge and successful businesses which are listed on the stock exchange. Mr. Ziarat Gull cant reach every share holder directly because it is dificult and time consuming task, so there should be a middle man who can connect the share holders and the owner, and for this there are brockers who connect both of them.

Average Score on AP Calculus BC Exam

Whats an average AP Calculus BC score? If youve just taken the test or plan to do so next year, then this question has probably crossed your mind. In this post, we will discuss scores on the AP Calculus BC exam and how those scores can benefit you in your college career. The Calculus BC Score Unlike the SAT or ACT, the AP exams have a very small range of possible scores: 1 through 5. The main reason for this scheme is that each numeric score represents a different level of mastery, much like the letter grade system that you probably use in your school. According to College Board, here is how you might interpret your numeric score. No recommendation (F) Possibly qualified (D) Qualified (C) Well qualified (B) Extremely well qualified (A) See the following helpful article for more details: What Are AP Test Scores? AB Subscore In addition, when you take the Calculus BC exam, you will receive a separate score called the AB subscore. This subscore is also in the range from 1 to 5. The AB subscore measures how well you did on just the AB material on the test. In other words, if you had taken the AP Calculus AB exam instead, then your score would probably be at or around the level of your AB subscore. A small number of colleges and universities will award credit or waive a pre-requisite calculus course based on a high enough AB subscore, even if your overall BC score was not very high. BC Exam Score Distribution You can look up data about the AP exam scores here. Below you can see a chart showing the percentages of students scoring at each level. AP Calculus BC score distribution As you can see, most students do score in the 4-5 range. In fact, almost half of the students taking the BC test earn a 5. The median score is 4. Lets figure out the average! (.126)(1) + (.059)(2) + (.176)(3) + (.155)(4) + (.484)(5) = 3.812 But Dont Expect an Easy Exam! Now does this mean that the BC test is really easy? Absolutely not! The AP Calculus BC exam is probably one of the most challenging standardized tests that you could take while in high school. It covers the equivalent of two full semesters of college level calculus. Rise to the Challenge So why are the scores typically so high on this test? Scores tend to be high on the BC exam because only those students who know that they will succeed and have prepared adequately will sign up for the test. If youre in AP Calculus in high school, your teacher may give an incentive for signing up for an AP exam (for example, allowing you to skip the final exam if you take the AP). The end result is that many students sign up for the easier of the two exams (AP Calculus AB) just to avoid a final. Only the truly dedicated and motivated students who want to work primarily in a STEM major in college would consider taking the BC test. Im ready for this! Go After It! So if you feel that youre up to the challenge, and you want to try to earn the equivalent of an entire year of calculus at your chosen college or university, then go for it! Keep in mind that the Calculus BC exam will not be easy. However, if you know the material and have prepared yourself by doing innumerable practice problems and mock tests, then you too can score a 5.