Mortgage in Saudi Arabia

Mortgage in Saudi Arabia In contemporary Saudi Arabian economy, demand for residential housing is on the rise; according to a Saudi Arabia Housing Sector Outlook, the economy’s demand for new housing is expected to grow at a rate of 18% per annum during the period of 2010 to 2013.Advertising We will write a custom assessment sample on Mortgage in Saudi Arabia specifically for you for only $16.05 $11/page Learn More The report further clarifies that by 2015, the country is in need of 1.65 million new residential units. With the hiked demand for housing, the mortgage industry has grown drastically: banking and financial institutions are tapping these markets and developing effective means to mitigate losses as a result. Demand for housing has grown due to an increasing youthful population that is setting small families at younger age; the country has a high population growth rate having doubled for the last forty years to 28.7 million, all these people have lead to the growth o f the housing industry (Saudi Arabia Economic Statistics and Indicators). This paper discusses the countries mortgage business trends. Borrowers risk and residential mortgage lending Residential mortgage lending means housing financing of homes; this is where a borrower takes a loan facility in the form of a mortgage to buy or construct a house to live in. The main difference that the facility has with commercial leading is that the bought house is expected to be the living premises of the borrower and not rented out for business purposes. The sector is the fastest growing in Saudi Arabia where young people are looking for homes to buy, or be financed to be build one. With the rise in demand of residential mortgage lending, and the need to make them affordable and protect the lenders, Shura Council has developed some lending policies. An amendment was passed in April 2011, where the countries housing authority was upgraded to a full ministry and expected to use $67 billion to build 500,000 homes; the ministry is expected to have a budget of $4 billion. In Islamic banking, of which are the majority in Saudi Arabia, residential mortgage lending follows regulations of SAMA; it happens that the lender engages into a contract by a third party, buys the house and rents the house to the customer. The amount of rent will have an element that goes to the bank as a gain from investment what is the financial benefit to the bank and another amount that goes to the principal amount.Advertising Looking for assessment on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More When lending banks and other financial institutions under the regulations of SAMA have a structure that works as the contract between the lender and the borrower; the contract is made with the prevailing condition at the time of lending taken to task; however, the situation may change creating some difficulty in the honor of the payment agr eement. Any change or chances of a change that might result to strained payment or default is called borrows risk. Borrows risk can thus be defined as the chances at which a borrower will default (willingly and unwillingly) paying the loan (Raymond, Ying-Foon and Ming 5-32). Factors you think are relevant in determining borrower’s risk When offering loans, a bank has to gauge the chances of success of the loan; the same happens with mortgage financing; the following are the factors that need to be considered: Borrowers Information When evaluating a borrower financing institutions/lenders considers the current and historical information of the lender, SAMA maintains a credit, history software were lenders are supposed to run the information of the borrower with the system and the history of the borrower will be offered. A high relationship exists between a person who have defaulted in the past and the chances that they are likely to default in the future. Those people who ha ve had a history of defaulting are given the facilities with more restricted terms or denied all together. Other than the government records, in case someone is an employee, the reputation of the company he is serving should also be looked into, there should be a letter signed by the employer guarantee the loan facility (Sfakianakis and Banque). Property Information When offering a facility, the property that is being mortgaged will be the subject of the contract; the lender values the property and determines the amount of money he is going to offer the property.Advertising We will write a custom assessment sample on Mortgage in Saudi Arabia specifically for you for only $16.05 $11/page Learn More The main concern here is that there should be value for money, properties should not be over or undervalued. When looking at the value, there should be respect to local government and ministry of land instructions regarding the amount that the property should co st. The contract should ensure that there is mutual benefit on among the two. Loan information Depending with the facility that a financier is offering, the nature will take different forms; loans are made with different packages to meet the demands of different categories of people. With increase in competition in the industry, every company is looking for the best ways it can sell to the larger community; on the other hand, the government through housing authority is seeking to improve the affordability of the facilities; it also ensures that businesspersons do not take advantage of the situation. When lenders are gauging the potential of a borrower, they consider what the borrow can afford, they put into consideration other loans that he might be financing, his living standards, his responsibilities and try to determine the amount that can be committed to the mortgage. This assists in ensuring that when someone id financing a facility, he is not pushed to the wall that he can d ecide to default payments. It is also SAMA rules that someone should commit his income to financing of loans only to a certain percentage. Side incomes are also considered (Zainab). Relationship between the three types of borrower’s risk and residential mortgage lending The above risks have interrelations and connections; when one area is overlooked, then it is likely to be the weak point of the whole process. In case the lenders observes that the prospective borrow has the potential and have good credit history, as it is required by borrowers information, then goes ahead to advance a facility without looking into loan information of the borer, then the borrow is likely to default paying the loan because he has been constraint by financial budget.Advertising Looking for assessment on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More On the other hand, loan information and property information are found to be okay but the lender overlooks borrower’s information; it is risking chances that the borrower has just made things look better but he is a defaulter. All the risk analysis tools through seeking information should be considered before advancing a loan facility to a borrower (SAMA). Global financial crisis and Saudi Arabia’s Real Estate sector According to Saudi Arabia’s commercial Real Estate sector report for the third quarter in 2010, the effect of global financial crisis was more felt in real estate’s industry than it was felt by the entire economy; the sector of the economy has been responsible for the growth of mortgage industry. The economy faced a reduction in business in the real estate of up to 10% where rental and the value of housing reduced accordingly. Global crisis brought about a contraction in lending rates in banks thus the demand for real estate’s also wen t down. People could hardly have enough money to demand for homes. In 2010, the situation seemed to have taken a different route while the government focused on a boost in the industry other than the traditional oil industry (Gulf base). Recommendations The growing population of Saudi Arabia and improved living conditions in the country is offering an opportunity for residential mortgage business; however, some measures that should be enacted by lenders to ensure they benefit from the opportunity, they include: Although Saudi Arabia is more of a capitalist nation, lenders should ensure they do not overprice their mortgages since there is high demand for the youths. Demand is higher than supply and according to law of demand, the prices should increase, as much as this is true, lenders should go ahead further and consider value for money. They should not overprice and take advantage of the high demand. Learning from experience is important since the failure of the United States mortg age industry in 2007 was because of unjustified increases in mortgage prices. I would recommend my bank to consider the borrower and value for money; this will lead to continued flow of customers. The next important factor that the bank should look into is the historical background of the borrower, the credibility of the borrower should be proved beyond doubtful doubts. In case of a red flag, the company should hold back and analyze the situation. To be sure, of credibility, third parties like employers, other bank’s statements, spouse consents, and utility bills holders should be consulted. With globalization, I would develop flexible mortgages facilities that allows for restructuring of loans; however, it should be in accordance to SAMA regulations. Gulf base.  Kingdom Of Saudi Arabia. GCC Stock Market, 2010. Web. Raymond, Chiang, Ying-Foon Chow, and Ming Liu. Residential Mortgage Lending and Borrower Risk: The Relationship between Mortgage Spreads and Individual Charact eristics. The Journal of Real Estate Finance and Economics 25.1 (2002): 5-32. Print. SAMA. Saudi Arabian Monetary Agency. Saudi Arabian Monetary Agency, 2010. Web. Saudi Arabia Economic Statistics and Indicators. Economy Watch. 2010. Web. Sfakianakis, John, and Banque Fransi. Saudi Arabia Economics. Web. Zainab, Fattah. Saudi Arabia’s Mortgage Law Advances Amid Mideast Unrest. 2011. Web.

Poverty In The United States Essays - Free Essays, Term Papers

Poverty In The United States Essays - Free Essays, Term Papers Poverty In The United States Poverty in the United States is getting worse each day and not enough is getting done about it. The readings from Babies and Benefits by Sheila Holbrook-White, the article on poverty by Michael J. Paquette, and Keeping Women And Children Last by Ruth Sidel made me view the issues of poverty in a different way. I never realised what kind of people were living in poverty, and the true reasons why they are there. What amazes me the most is how much these people need help, and how little the government is doing to help them. The government should set up work programs for these people to help them get better jobs and make enough money to survive. The politicians in Washington D.C. and all over the U.S. want nothing more than to cut back on government funding for the people in poverty. The government doesnt believe that most of the people actually need this money from AFDC. They cant get it because they dont meet the proper criteria set by the government. Either theyre not poor enough, theyre not poor in the right way or they need the money for the wrong reasons. The reading in the book Keeping Woman and Children Last, showed time and time again the shocking stories of how people fall into poverty after living a middle class life for decades. Reasons pertaining to illness, death, unemployment, divorce and accidents left these people with nothing and the government would refuse to help them. These people are called the New Poor(Sidel, 1998, p.60). Their social security and pensions are not enough for them to live on so they must rely on these funds to help. With marriage being touted today as a central route out of poverty, few critics of the choices and behaviour of poor woman speak about marriage as a path into poverty.(Sidel, 1998, p.60) I never thought that marriage could lead to poverty until I read this story from Keeping Women And Children Last. A welfare worker married one of her clients and ended up on welfare because of her marriage. She married a man who had little education, a drug problem and an alcohol problem.(Sidel, 1998, p.60) Their marriage fell apart because of his abuse to his wife and children and the woman was forced to go for help from the place where she used to work, a welfare office. They got back together eventually after he came out of a rehabilitation program. He then started with the drugs and alcohol again and she was force to leave him to apply for AFDC. Those who are stigmatising welfare recipients do not point to all those young mothers who are valiantly caring for their children on meager AFDC checks while struggling to complete their education.(Sidel, 1998, p.63) Parent who receive AFDC checks that are going back to school to better qualify themselves for better jobs in order to better provide for their families. One woman came off the streets of New York City and went from begging at supermarkets to attending Columbia University through their Higher Education Opportunities Program (HEOP). She is constantly fearful that HEOP will be cut back and that welfare reform will force her to quit school and go back to work full time. (Sidel, 1998, p.64) These people need help while they are in school, but welfare reform is not the kind of help they need. These programs should receive more government funding to not just better the people and help the children but to better society. Some people are also saying that single mothers have more children to receive more money from the AFDC. This is where the term woman have babies for benefits(Holbrook-white, 1998, p.1) comes from. Politicians like Bob James and Robert Rector believes that these women are cheating the system. Studys have shown that even though AFDC benefits have fallen across the nation 47% since 1970, single mother childbearing has nearly doubled. Statistics in Alabama show that more than half the babies born in Alabama are unplanned. I feel that these cutbacks on welfare reform are just excuses to spend less on the poor and more on the wealthy. The statistics on specific ethnic groups are ridiculous. 33% of Hispanics live

Functionalist and intentionalist explanations of mass murder cases Essay

Functionalist and intentionalist explanations of mass murder cases - Essay Example Genocide is thus the result of ideology, as opposed to structure. With the functionalism, it is the opposite – the structures – political, environmental, etc. - are what influences the individual to act, or the group to act. A person might have an ideology that Jews are the cause of the problems of the world, and they must be eradicated, and this is what drove the Holocaust, say some historians, along with Hitler's overall mental problems. Others state that the structure is what drove the Holocaust – the recession that Germany was in, which made the people desperate enough to latch onto the ideas of Hitler. The functionalist argument could also be what explained why the individuals under Hitler, and the groups as well, would do what they did in carrying out the orders. With Rwanda, the functionalist argument is almost the entire argument, as no one individual had the ideology to carry out the genocide. However, if group ideology can be considered in the intention alist argument, then this is one way that intentionalism can be used to explain what happened in Rwanda as well. This paper will explore these two theories, as well as explore how they fit into the parameters of these two tragedies. Intentionalism According to Crane (2007), the theory of intentionalism questions whether all mental states are intentional. Thoughts are intentional, in that they have an object (Armstrong, 1968). Or they might have multiple objects (Husserl, 1901). In other words, people who are thinking are thinking about something – there cannot be a thought about nothing. Since thoughts, by definition, are about something, they are said to be intentional thoughts (Chalmers, 2004). Crane (2007) asks the question of whether there are similar objects for emotions, sensations and perceptual experiences. Crane (2007) also explains what intentional objects are, and the intentional states of mind that are focused upon these objects. If one hopes for something, then t his is an intentional mode. If one thinks of the object in different ways – champagne can also be thought of as sparkling wine, for instance – then this would be considered intentional content. The thing in the mind must be represented in one way or another, according to Crane (2007). Therefore, one must have intentional mode and content (Parsons, 1980). Crane (2007) also asks if the contents of all intentional states are true or false, which means that they are propositional. Or, the contents of an intentional state might be conceptual or non-conceptual (Martin, 2002). This means that the â€Å"state of mind has conceptual content when a subject needs to possess the concepts definitive of its content in order to be in that state† (Crane, 2007, p. 8). Nickel (2007) explains intentionalism as visual experiences that have phenomenology and content. Phenomenology is â€Å"what it is like to have it,† and content â€Å"is how the experience represents the wo rld as being† (p. 1). He states that if two experiences differ in phenomenology, then they differ in content. Or, as Byrne (2001) understands it, one has a representation of a thought, and a sensation about the thought. The representation is the intentional part of the thought (Stalnaker, 1998). The intentional part of the thought may become separated from the sensation, according to some philosophers (Robinson, 1994). Nickel gives some helpful examples to compare and contrast when he speaks about the concepts. He explains phenomenology as being â€Å"

Ethical Theory Study Guide Assignment Example | Topics and Well Written Essays - 750 words

Ethical Theory Study Guide - Assignment Example Looking at the virtue of duty, the Kantian theory explains that it is important that an individual must act such that their actions and consequences amount to regard for a self and societal respect. It is each and every individual’s moral obligation to conduct themselves such that the consequences accruing observes the communal being. In view of obligation, it is a moral responsibility, according to Kantian theory, it is the moral obligation of every citizen to pledge allegiance to the ruling government. This is in effect regardless of their ideas, be they bad or good. The fact remains that the leadership must be revered. Finally, in view of the third principle of perfection, the Kantian theory has the endowment that such natural existence as sex must be treated with utmost discipline, otherwise one may succumb to drives which make the human morals subjective (wood 3). The Kantian theory defines human beings as rational natural existence. It goes ahead to describe the human dignity as one such attributes that are indispensable from the existence, failure to which there should be the characteristic extinction of nature. With this observation, the theory provides that the existence of humanity must occur to meet the standards of idealism. This means that at all times, moral obligations of each and every individual must be applied. This consistency is which then can define one who lives inconsistency with the truth. For instance, regardless of what a person is made up of as entails character, they must be treated with the respect and right to this at all times. An exemplification is made with a to-be murder. For instance, if such a subject wants to commit the crime, and another person has the information that may assist them in doing so, Kantian theory considers it an obligation of the second party to give truthful information that may help the subjec t accomplish their objective. This is regardless of the expected outcome by both parties (wood 10).

Liberal Studies Essay Example for Free

Liberal Studies Essay How do economic prosperity and rule of law depend on each other? It is doubtless that economic prosperity and rule of law are indivisible. And to answer how they depend on each other, stating the definition of ‘economic prosperity’ and ‘rule of law’ is inevitable. ‘Economic prosperity’ means that overall, the economy is doing well and most people have sufficient income for essentials and perhaps a little extra. It means that businesses are hiring and jobs are relatively easy to get. However, it does not mean that everyone has a job or that everyone is well off. On the other hand, the ‘rule of law’ means that the law should govern by limiting all conduct and behavior of all people and organizations in the society. Economic prosperity depends on the rule of law. One of the major functions of the rule of law is maintaining social stability. It is a well-known fact that investors and business men tend to invest their money on a stable, peaceful and well-ordered society. The reason is that in a more stable place, with fewer disputes and a well-established legal system, their money will be safer. This enhances economic prosperity. Moreover, in the Basic Law, it is clearly stated that people hold the right of private ownership of property, which means that the efforts of their work and the fruits of production are enjoyed exclusively by themselves. Hence, people are encouraged to work harder for their own benefits and create wealth. This promotes sustained economic growth and long-term prosperity. Also, even before the unification, Hong Kong has always been a famous free port in the world. In accordance to the Basic Law, Hong Kong shall take the low tax policy previously pursued in Hong Kong as reference to enact laws on its own concerning types of taxes, tax rates, tax reductions, allowances and exemptions, and other matters of taxation. Thus, the Hong Kong government does not set trade barriers such as customs tariff and quota on most imported and exported goods. Since no trade barriers are set, more products will flow in Hong Kong and consumers can choose from greater varieties of products. In addition, cons umers can buy products of higher quality but with lower prices. This stimulates consumption, which hopefully leads to an economic growth. In short, the free trade policy has contributed a lot to the overall economic development of Hong Kong. Likewise, the rule of law deals with corruptions. Under the principle of the rule of law, the law is above everything, even the government. Corruption and cronyism discourage domestic and foreign investment. The rule of law eradicates these problems and protects the economy. Simultaneously, the rule of law also depends on economic prosperity. How so? When the economy is prosperous, as stated above, most people have adequate income for daily necessities and perhaps, a little extra. Generally, businesses are hiring and jobs are relatively easy to get. In that case, people have less complains about the government and the society is likely to be more stable. In simpler words, economic prosperity stabilizes the society. Furthermore, when the economy is doing well, hopefully people is going to have more disposable income for consumption, investments etc. So, a prosperous economy will create demand for more protection of property rights, and rule of law. Maintaining the supremacy of the judicial and the rule of law requires resources. A well-doing economy provides more resources for the judiciary to increase the efficiency and effectiveness of legal institutions, including supporting the introduction of modern facilities, case management practices, information sharing, training of judges and other court personnel, and stronger mechanisms to ensure transparency and accountability. This further ensures that the court and the law are supreme. The rule of law is secured in consequence. In my opinion, the degree of dependence of economic prosperity on the rule of law is way more than that of the rule of law on economic prosperity. Nevertheless, it is not the main focus of the question, which casts doubt on how the two depend on each other, but not the extent. In conclusion, it is apparent that economic prosperity and rule of law depend on each other a lot. Without the rule of law, firstly, people do not have the right of private ownership of property, which obviously is going to cause many disputes in the community since the result of the hard work of individuals may be taken away from them. Secondly, the free trade policy of Hong Kong since the reign of the British Empire may also lose, which will severely affect the overall economic well-being of Hong Kong consequently. Thirdly, the rule of law eradicates corruptions and relevant activities which deteriorate the economy. From these, we can see how economic prosperity depends on the rule of law. A place could never achieve a prosperous economy if there is no rule of law. In a similar way, without a prosperous economy, the rule of law would definitely not be in good state too. First, the society is going to be more stable as citizens hold less complains about the government. Second, since generally the economy is doing well, it is doubtless that people will have more disposable income thus promote consumption and other business activities, eventually stimulating the economy. Plus, to maintain and secure both judicial supremacy and the rule of law requires resources. Economic prosperity provides those resources to the judiciary. No wonder why people said the rule of law relies on economic prosperity. Last but not least, economic prosperity depends on the rule of law, and vice versa. To have the two is the key to a successful country, where economic development and democracy is balanced.

Extraordinary Means Of Treatment Essay -- essays research papers

Extraordinary means of treatment   Ã‚  Ã‚  Ã‚  Ã‚  For many years now there have been people who center their lives on giving medical attention to sick patients in need of their care. There have also been many doctors who spend their lives developing techniques to help keep people alive as long as possible, even when the person quite possibly should have died a natural death a long time ago. Does this make what the doctor is doing wrong? Doesn’t the patient deserve a chance to live the longest and fullest life they possibly can?   Ã‚  Ã‚  Ã‚  Ã‚  These questions must be weighed on the benefits of the treatment versus the burden of the treatment. It may prolong life but will it make the life better or just lengthen the suffering that the patient has to go through. These and many other considerations must be taken in account in order to assure the best decision for the patient. Money can also be a factor in extraordinary treatment. Some people can’t afford to have their loved ones in a hospital for very long especially if they are in a coma or other severe illness, and might not be able to afford a long-term hospital bill. Also if there is a very slim chance of success with the procedure it may not be worth trying to save or preserve the life of the patient. Sometimes you may need to take the individual’s opinion on the treatments advice. If they are able to give a competent decision shouldn’t it be used to dete...

Financial Comparison of Ryanair and British Airways Essay

Ryanair is considered as the pioneer of the low-cost business model, while British Airways is constantly ranked amongst the world’s best legacy carriers. Both of these airlines are dominant companies in their segment with high passenger numbers and vast network coverage. Therefore the following question rises – how these airlines are different in terms of finance and which business model is more fruitful in the middle of an economic downturn? In order to find the answer a thorough financial investigation has been conducted relying on the data outlined in the airlines’ annual reports. In the first section of the report the emphasis is put on the current financial situation of the airlines, while outlining the existing sources of finance. These sources are investigated thoroughly in the second part. The final section evaluates the possible or available sources to finance future investments. Review of Ryanair’s and British Airway’s current financial situation Ryanair in the fiscal year of 2012 has generated a total of â‚ ¬4,390.2m operating revenue mainly through scheduled revenues. The company has increased its operating revenues since 2010 by â‚ ¬1,2bn primarily due to fare increases. In 2012 the total operating expense was â‚ ¬3,707m. This is also the peak in the last three years, mostly attributable to fuel and oil costs, which have almost doubled since 2010. Hence the net profit for the 2012 fiscal year was â‚ ¬560.4m, the highest in the history of the company. British Airways in the fiscal year ended 2011 December 31 accounted a profit of  £672m after paying the taxes. This can be considered as a significant improvement after 2010’s profit of  £170m. These figures do not provide enough in-depth information on the airlines’ real situation. In order to identify the sources of finance and the real position of BA and Ryanair further investigation with the use of ratios is required. Liquidity Current ratio is a liquidity measure that compares the liquid or current assets of the airline with its current liabilities. (Atrill, McLaney 2002) For the fiscal year of 2012 Ryanair’s CR was 2.1355, which represents high liquidity. Generally the higher ratio is considered to be the better. According to Morrell the industry general ratio is 1.00. This suggests that Ryanair is capable of financing its short term commitments towards banks and suppliers However, it must be noticed that the airline has significantly high cash reserves, namely â‚ ¬2.7bn. Such rate suggests for the banks and suppliers that the company is low risk for investment and has high liquidity, but also proposes that the cash is being accumulated to finance future aircraft orders or other investments. The fact that the cash reserves has grown with â‚ ¬1.2bn in the last two years also underpins these assumptions.(Morrell 2007) British Airways has a low current ratio of 0.7531. It points out the problem that BA cannot finance its current assets from its current liabilities. Thus, it can be assumed that the short term debts are financed through the more expensive long term loans. The company’s cash reserves are  £1.7bn, which is considerably lower in comparison to Ryanair’s reserves. This can result in higher interest rates as the airline is not considered as a safe investment for lenders. According to Moody’s credit rating company BA’s credit ratings were B1 and BB in 2011. Also being a legacy airline BA works with more third party suppliers like travel agents and these issues can mean that the pay-outs are delayed. It is important to note that Ryanair and the low-cost business model do not use travel agents. Performance and earning The operating margin gives an indication of management efficiency in controlling costs and increasing revenues as it represents the operating profit as the percentage of total revenues. Comparing to last year’s results, both airline’s ratios have remained flat, namely 14% for Ryanair and 5.2% for BA. It means that on every pound or euro BA makes  £0.05 profit, while Ryanair â‚ ¬0.14. However, the low-cost model seems to be more profitable, but it must be taken into account that they are also operating in a lower cost structure. Also, BA has managed to generate a positive operational margin as in 2008 and 2009 its values were negative. Return on Equity (RoE) is the net profit after interest and tax expressed as percentage of shareholder’s funds. BA has achieved a 26.2% RoE in 2011, while the same value for Ryanair was 16.9%. It means that BA is making more profit from the shareholders money. The shareholder’s money is only the one-third of BA’s asset, while Ryanair is half founded by the investors. Solvency Gearing ratio is a measurement of the contribution of long-term lenders to the long term capital structure of a business. Ryanair’s gearing ratio was 53.98% in 2012, which is considerably high for a low-cost airline. In other words it means that the company is financed half from borrowing and half from own capital. The lower the gearing ratio of the airline the greater the firm’s capacity to borrow more money at a lower interest rate, due to the lower risk to banks and lenders. Oppositely, BA has an even higher gearing ratio of 65.5%. Around one third of British Airways’ capital is funded by the shareholders, while the remaining is sourced from long-term loans and debts. The following table summarises the previously outlined performance and liquidity ratios of the airlines. BA( £) Airline Ryanair(â‚ ¬) 9,987 Total revenue 4,390.2m 672m Profit after tax 560.4m 0,7531 Current Ratio 2,135 63,80% Gearing Ratio 53,98% 570m Cash Reserve 2708m 26.2% ROE 16.9% 5.2% Operating Margin 14% Fleet commitments Ryanair Replacing the aircrafts is not only increases the airline’s prestige but can mean a significant reduction in operating costs as the new generation of aircrafts are much more fuel efficient or can carry more passengers than the predecessors. As the core of the LCC business model Ryanair only flies Boeing 737-800s thus reducing the maintenance costs significantly. The carrier has one live contract from 2005 with the American aircraft manufacturer that covers the procurement of 197 brand new 737800s for which the unit cost is $51m. (Ryanair 2012) ï‚ · Ryanair’s long-term debt for aircraft commitments, including current maturities was â‚ ¬3,625.2m at March 31, 2012. The airline has funded a significant portion of its acquisition of new aircraft and equipment through borrowings under facilities provided by international financial institutions on the basis of guarantees issued by Ex-Im Bank. At the end of fiscal year 2012 the carrier had a fleet of 294 Boeing aircraft of which 199 were funded by Ex-Im Bank guaranteed financing. Other sources to cover aircraft costs are Japanese Operating Leases with call options (30 aircrafts) and commercial debt financing (6 aircrafts). According to the bookings, 235 aircraft are owned by Ryanair, which are financed through long-term bank loans. Operational leases funded 59 aircrafts at March 31, which means that Ryanair operate these aircrafts, but does not own them. The aircrafts are leased to provide flexibility within the aircraft delivery programme. 55 aircrafts is being financed through fix-rate debts, while for the remaining 4 aircraft Ryanair is paying variable rental payments. Out of the 25 aircraft, which has been delivered in the 2012 financial year, 11 were funded through sale-and-leaseback financing and the remainder through Ex-Im Bank guaranteed financing. To convert a portion of the floating-rate debts into the fixed rate debts, Ryanair has used interest rate swaps and cross currency rate swaps. As a result â‚ ¬1,314.7m of the aircraft loans are remained at floating rates. The remaining â‚ ¬2,310.5m is in fixed-rate euro-denominated debts with the maturities of 7 to 12 years. On all of the above mentioned borrowings the weighted average interest rate was 2.9%. The effective rate is the rough estimate for the weighted average cost of capital. It is calculated by dividing the interest paid for the year with the long term borrowings. For Ryanair it is 3.01%, which is really close to their given figures. Accordingly their cost of long term borrowings is 109.2m, which can be considered as low. The low rate also represents trust from the lenders and investors. But, on the other hand it must be noted that at March 31, 2012 aircrafts with a net book value of â‚ ¬4.8bn were mortgaged to lenders as security for loans. This may be the explanation for the low interest rates. In general, Ryanair has been able to generate sufficient funds from operations to meet its nonaircraft acquisition-related working capital requirements. Between 2008 and 2012 March Ryanair had sold and re-delivered a total of 39 aircrafts and also the company plans to dispose 8 additional before March 2014. Ryanair may choose to dispose of aircraft through sale and or non-renewal of the operating leases as they expiree between 2012 and 2013. In the next year the company has a total obligations of â‚ ¬1,143.3m out of which the third, around â‚ ¬571.8m is â€Å"purchase obligations†, i.e. buying the remaining 15 aircrafts. Each of the aircraft loans have similar terms – maturity of 12 years from drawdown date and being secured by a first priority mortgage. The overall aircraft debts (â‚ ¬3,625.2m) represent around 80% of all long-term liabilities, hence if the airline is capable of paying these commitments Ryanair should be able to preserve its current financial status in the upcoming years. As it can be seen the low cost carrier Ryanair has built up a well-functioning system to finance all its aircrafts, including the 15 Boeing 737s that will be delivered in the future. Furthermore by currency swapping and low interest rates the company is in total control of its costs. British Airways The transparency of BA’s financial situation is significantly lower comparing it to Ryanair’s. This can be explained in two ways, either they prefer not to reveal their financial strategy and sources as it can provide valuable information for the competitors or the company does not have the adequate financial background to finance its long term commitments. British Airways has a completely different fleet to cover both its short- and long-haul routes. The fleet is owned by the company or held in finance and operational leases. The 245 aircrafts take up two thirds ( £5.7bn) of the company’s total non-current assets. Also, 95% of the overall revenue is generated through the fleet. The aircrafts comprise different sized jets from various manufacturers making the operational and maintenance costs higher. In the annual report of year ended in December 31, 2011 BA outlined its current fleet and future aircraft deliveries and options. These include 50 firm orders and 84 options. The new fleet is made up from A320s, A380s, Boeing 777-300s and 787s, which are expected to enter service between 2012 and 2017. Furthermore, in Note 13 the airline states that the cost of these aircrafts is going to be  £4.1bn. But, no other information is provided about the sources that will cover these expenditures, thus it can be assumed that the future cash flows contain relevant information on these funds, but they have not been published yet. (British Airways 2012) The non-current liabilities of loans, finance- and operational leases add up to  £4.904, which is 30% more than Ryanair’s â‚ ¬3.8bn total long-term commitments. According to BA the bank and other loans at the end of 2011 equalled  £1,324m, comprised of fixed- and floating rate loans.  £693m is in floating-rate debts, while the remaining  £823m is in fixed rate loans and bonds. The average interest rate for the fixed rate debts is around 6.5%, which is significantly higher than Ryanair’s 2.9%. The floating rate loans are generally determined to be 0,5%+LIBOR. The lenders consider the airline as a higher risk firm that is why the interest rates are higher. Generally, the loans are repayable between 2014 and 2018, with one exception none of the loans need to be repaid until 2014 and on. Such conditions allow BA to use the debt to generate cash in the next 2-4 years. BA uses finance leases and hire contracts to acquire aircraft. These leases have both renewal options and purchase options. The total finance lease contracts worth  £2.227bn and similarly like Ryanair, it consist of different currencies namely US dollar, Euro, Japanese yen and Sterling. The non-current side of these contracts are  £1.12b, but around half of this is due obligatory in five or more years. Four of the new 777-300s are being leased through GE Commercial Aviation Services (GECAS). The finance lease agreements are mainly in place to fund the existing fleet. Therefore additional leases are required, if the new fleet is wished to be funded through such construction. The operating leases for BA’s aircraft range from five years and some leases contain options for renewal. However, this type of contract accounts for only  £316m of which is  £253 is not payable within one year. Comparing to 2010 BA has halved its operational leases from  £635m, it can be assumed that company took the lease contract for an aircraft or more, which was expected to be delivered in 2011, but it has been delayed so the company terminated the contractual agreement until the new aircrafts are delivered. Accordingly, it can be assumed that operational lease commitments are going to rise in the next two financial years. Unlike Ryanair, British Airways does not provide any kind of information about the structure of the leases. The following assumption can be made though; BA offered worse interest terms with the loan contracts than Ryanair because of its weaker liquidity and performance. British Airway’s effective rate shows the same trend as its 4.301%. The company paid  £161m in 2011 as cost for long term borrowings. Financing in the short run As it has been outlined above, Ryanair has a current ratio of 2.1, which provides a solid base for the assumption that the airline is financing its short-term liabilities from its current assets and operational profit. In fact Ryanair could repay all its short term liabilities from its â‚ ¬2.7bn cash reserve and would still be left with â‚ ¬0.9bn cash. Moreover, Ryanair’s current liabilities are half of BA’s short run commitments. In less than 1 year Ryanair will need to finance 1,1bn for obligations, like current maturities of long term debts and purchase obligations. But then again, Ryanair has the capacity to pay these. BA is more interesting in the short run as the airline’s current ratio is 0.75. Logically the question arises – if the short-term liabilities cannot be covered from the operating revenue then how is it financed? Possibly the long-term loans are used in such case which is leading to future liquidity issues. The main problem is the â€Å"trade and other payables† entry which accounts for  £3,117m within current liabilities. But, from this total amount the real credit is  £1,457m, which is the money BA owes to creditors like suppliers and travel agents. The remaining are mostly prepaid flights that the airline will accomplish in the new financial year. Having the suppliers wait for their money is a way to improve cash flow. The cash operating cycle for the company has been calculated by dividing the trade payables with operation expenses (less employee costs and depreciation). The average pay out period for British Airways is 80.1 days, which can be considered as high and nevertheless it also shores up the liquidity problems of the airline. On the other hand, Ryanair makes these to the creditors payments within 22.1 days. Note 28 describes BA’s liquidity risk in more detail. The results suggest that within the next 12 months British Airways is going to need around  £2.203bn to finance all its commitments for that period. Where the money is coming from? This question remains unanswered, but it can be presumed that BA is going to need new sources to fund this  £2.203bn short-term liability combined with the  £4.1bn commitments for the new fleets. Shareholders’ equity and dividend policy Ryanair has significant retained earnings, namely â‚ ¬2.4bn, even though there was a â‚ ¬500m dividend pay-out in 2010 October and also a similar sized one is planned in 2012 November. Seeing the results and pay-outs it can be assumed that the shareholders are happy with the dividend policy and this can serve as a basis for future capital injections, if necessary. On the other hand BA’s directors declare that no dividend to be paid for the years of 2011, 2010 and 2009. Such dividend strategy can be explained by the airline’s current liquidity problems. Depreciation Both companies included their depreciation strategies in the annual reports. Ryanair states accounts the Boeings for 23 years, while British Airways calculate with 18-25 years of lifetime for their aircrafts. From these numbers it can be assumed to lower the depreciation costs the amortisation rates are underestimated by both airlines thus saving millions in the accounts. British Airways 50 2012-2017  £4.104bn 4.301%  £161m  £3.683bn  £4.904bn Data not disclosed 80.1 days 31 March 2012 Airline Fleet commitments (no. of aircrafts) Delivery date Capital commitments for new aircrafts Effective rate Long term cost of borrowing/year Total current liabilities Total non-current liabilities Total non-current liabilities for fleet Average pay out period Financial year ended Ryanair 193 2007-2014 ~$10bn 3.01% â‚ ¬109.2m â‚ ¬1.815bn â‚ ¬3.879bn â‚ ¬3,625bn 22.1 days 31 December 2011 Future financing Ryanair Through the analysis of the financial statements it has been revealed that Ryanair has a stable financial structure that is capable to fund the various liabilities in the short- and long-run. The remaining aircraft deliveries are funded through operational revenues and cash reserves. But, it must be kept in mind that the latest fleet contract is from 2005 and all aircrafts will be delivered by 2014. The next couple of months are going to be important in terms of long term strategy for Ryanair. The accumulated cash reserves point that the airline is preparing for some sort of investment. It can be the acquisition of Aer Lingus or the procurement of new aircrafts. The acquisition of the Irish carrier is currently delayed by the EU, but Ryanair is putting all the effort to buy become major shareholder in the firm, which would enable them to appear on the long-haul market through Aer Lingus. It also has been outlined in the annual report that Boeing has granted to give significantly lower prices for Ryanair in return of bulk orders, promotional and other activities. In other words, they are inspiring the airline to go invest into a new fleet in the middle of an economic downturn. In such case the shareholders might be willing to finance the new requirements as they are kept â€Å"happy† and also the airline has been maintaining a steady growth rate both in profits and network coverage. Banks are also aware of the securitized aircrafts also of the vast amount of cash reserves. This background could enable Ryanair to obtain loans with lower interest rate. Ryanair is aware of the favourable contract conditions with Ex-Im Bank as the carrier has stated that they expect any future commitments or guarantees issued by Ex-Im Bank to contain similar conditions. Any inability to obtain financing for the new aircraft on advantageous term might have an adverse effect on the business, operations and financial conditions. However, easyJet founder Stelios Haji-Ioannou calls for a slower fleet expansion plans in the next years as he believes that the annual growth is not equal with the number of aircrafts on order. Ryanair should also consider this perspective of growth as they ground 80 of their aircraft for the winter period. A great bulk of aircrafts without sufficient demand could destabilise the airline’s financial position and could make Ryanair to reassess its financial sources. (Rothwell 2012) British Airways Additionally to the current-liability problems (see above), the other main financial issue for BA is to pay for the new fleet. Like mentioned above the company has firm orders for 50 aircrafts for  £4.1bn and options for additional 84. The following question needs to be answered pretty soon – who is going to lend money for British Airways? How much is it going to cost the airline? ï‚ · The British flag carrier could try to increase its funds from shareholders money, but it can be assumed that due to the lack of the profitable dividend policy shareholders are not ready to invest more money into the airline. Also, BA belongs to International Airlines Group (IAG) which also incorporates the Spanish carrier Iberia. The problem is Iberia is making losses, thus even if British Airways makes profit this or next year IAG is going to use that money to reduce the losses at Iberia. In other words, the Spanish carrier is pulling British Airways back at the moment. Shareholders may consider additional funds risky, therefore BA need to show that it can preserve its leading position as a legacy airline. ï‚ · Cash can be generated by selling off assets or reducing costs. In December 2011 BA had only  £39m available-for-sale financial asset. The airline has different amount of equities in various companies – these could be sold as well to gain cash in the short run. By selling aircrafts, which are not necessary needed, the airline could generate income. It would not be unreasonable if BA focused more on the long-haul routes and would reduce the number of aircrafts (114) flying within Europe as the company may not be making sufficient operational profit on some of these routes due to the low cost carriers. The third option for the company to finance its future commitments is to obtain loans from banks, financial institutes or sovereign wealth funds. The latter is a possible solution as Chinese or Gulf wealth funds could be willing to inject capital into the airline, but the question is at what interest rate? The lenders know that BA is struggling with the payment of the shortterm liabilities and they are using the long-term loans, the â€Å"more expensive† money to fund the operational commitments, hence the interest rate for the credit can expected to be high. This would solve the liquidity question in the upcoming years, but such financial funding would also mean difficulties in the period after 5 years. However, if the carrier can continue its recovery from the downturn then there is a good chance for a financially stable British Airways that can pay all its liabilities. Financial and operational leases may work, but they would only relate to the aircrafts. Also, it can be assumed from the drop in the operational lease that BA has these contracts ready and sorted out, they are not just not live as the new aircrafts have not been delivered yet. Conclusion The report has investigated two different business model’s financial structure. Results show the quantity’s victory over quality. Ryanair can maintain its market leading position and increase profits from year to year. This is attributable to the steady and well-functioning financial and operational system, which enables growth, investments and also controls liabilities and aircraft commitments. The search for new financial sources is only necessary, if Ryanair decides on a fleet expansion plan and the airline cannot agree with Ex-Im Bank about future fleet procurement. On the other hand, British Airways seem to struggle with its existing funds hence new financial sources are required to survive the upcoming years. The decision on these funds is hard as in BA’s current situation none of them can be called advantageous. But, to choose the best solution financial advice is recommended for the carrier. Despite all the differences, the two airlines have one thing in common – the next twelve months are going to have a great effect on both carriers’ long term operations. Reference list ATRILL, P. and MCLANEY, E., eds, 2002. Accounting and Finance for Non-Specialists Fourth edn. Pearson Education Limited. BRITISH AIRWAYS, 2012. Annual Report and Accounts Year ended 31 December 2011. British Airways. MORRELL, P.S., ed, 2007. Airline Finance Fourth edn. Ashgate.

Sandra Cisneros’ Eleven

Eleven or One hundred and Two? Sandra Cisneros’ short story â€Å"Eleven† describes a young girl that is at a loss for words when her teacher embarrasses her in front of the class. How does Rachel convey her feelings on Mrs. Price’s authority? Rachel says in the third paragraph that she wishes she was one hundred and two instead of eleven and in saying so she thinks that if she was that age she would have known the words to answer Mrs. Price when she made her put on the ugly sweater that was not hers at all. She adds the two to the hundred as it makes the impression that one hundred is normal old but by adding the two she would be really old and know what to say. We move on and find that Rachel has a very difficult time dealing with the embarrassing fact that Mrs. Price is forcing her to put on the red â€Å"cottage cheese† smelling sweater and instead of standing up for herself she puts her head down and starts to cry, she thinks about her school friends like Sylvia Saldivar who she says is stupid but will probably tease her in the playground about the sweater. Rachel calms herself down with the thought of her parents waiting for her at home with her birthday cake and candles and her papa coming home to sing happy birthday, To summarize we find that on one hand Rachel is a very mature girl that talks about age in a very distinct manner and on the other hand she has a very passionate way of describing her feelings and the situation that she is in.

French Texting - Les Textos Francais

French Texting - Les Textos Francais Learning French is one thing, but French on the internet - in chatrooms,  forums, text messaging (SMS), and email can seem like a completely different language. Fortunately, help is at hand. Here are some common French abbreviations, acronyms, and symbols to help you communicate via text, followed by some helpful tips and pointers. French Meaning English 12C4 un de ces quatre one of these days 2 ri 1 de rien youre welcome 6n Cin Movie theater A+@+ plus L8R, laterCUL8R, see you later A12C4 un de ces quatre See you one of these days a2m1@2m1 demain CU2moro, see you tomorrow ALP la prochaine TTFN, ta ta for now AMHA mon humble avis IMHO, in my humble opinion APAPLS plus TTFN, ta ta for now ASV ge, Sexe, Ville ASL, age, sex, location a tt tout lheure see you soon auj Aujourdhui Today b1sur Bien sr Of course BAL Bote aux lettres Mailbox BCP Beaucoup A lot bi1to Bientt RSN, real soon biz bisous kisses bjr Bonjour Hello bsr Bonsoir Good evening C Cest It is C1Blag Cest une blague Its a joke, Just kidding CAD Cestdire That is, i.e., cb1 Cest bien Thats good C cho Cest chaud Its hot C Cest It is Ch ChezJe sais At the home ofI know ChuChuiChuis Je suis I am C mal1 Cest malin Thats clever, sneaky C pa 5pa Cest pas sympa Thats not nice CPG Cest pas grave INBD, its no big deal Ct CtaitCest tout It wasThats all D100 Descends Get down dacdak Daccord OK DSL Dsol IMS, Im sorry DQP Ds que possible ASAP, as soon as possible EDR croul de rire LOL, laughing out loud ENTKEntouK En tout cas IAC, in any case FAI Fournisseur daccs internet ISP, internet service provider FDS Fin de semaine WE, Wknd, weekend G Jai I have G1id2kdo Jai une ide de cadeau I have a great idea GHT Jai achet I bought GHT2V1 Jai achet du vin I bought some wine G la N Jai la haine H8, hate GspR b1 Jespre bien I hope so Gt Jtais I was J Jai I have Je c Je sais I know Je le saV Je le savais I knew it Jenmar Jen ai marre Im sick of it Je tM Je taime ILUVU, I love you Je vJv Je vais Im going JMS Jamais NVR JSG Je suis gnial Im (doing) great JTM Je taime I love you K7 cassette cassette tape KDO Cadeau Gift KanKand Quand When Ke Que that, what K Quest What is Kel Quel, Quelle Which Kelle Quelle That she Keske Quest-ce que What kestufouKsk tfu Quest-ce que tu fous ? What the hell are you doing? Ki Qui Who Kil Quil That he Koi Quoi What Koi29 Quoi de neuf ? Whats new? Lckc Elle sest casse She left Ls tomB Laisse tomber Forget it Lut Salut Hi M Merci Thanks MDR Mort de rire ROFL mr6 Merci Thx, thanks MSG Message Msg, message now maintenant ATM, at the moment NSP Ne sais pas Dunno o Au In the, at the Ok1 Aucun None, not one OQP Occup Busy Ou Ouais Yeah p2k Pas de quoi URW, youre welcome parske Parce que COZ, because p-pitit Peut-tre Maybe PK Parce que Because Pkoi Pourquoi Y, why PoP Pas Not PTDR Pt de rire ROFLMAO, rolling on the floor laughing q-c qqueske Quest-ce que What QDN Quoi de neuf ? Whats new? qq Quelques Some qqn Quelquun Someone raf Rien faire Nothing to do ras Rien signaler Nothing to report rdv Rendez-vous Date, appointment RE (Je suis de) retour, Rebonjour Im back, Hi again ri1 Rien 0, nothing savapa a va pas ? Is something wrong? SLT Salut Hi SNIF Jai de la peine Im sad ss (je) suis I am STP/SVP Sil te/vous plat PLS, please T Tes You are tabitou Thabites o ? Where do you live? tata KS Tas ta casse ? You have your car? tds tout de suite right away ti2 Tes hideux Youre hideous. tjs Toujours Always tkc Tes cass Youre tired. TLM Tout le monde Everyone T nrv ? Tes nerv ? Are you irritated? TOK Tes OK ? RUOK? Are you OK? TOQP Tes occup ? RUBZ? Are you busy? tps temps time, weather Tttt Ttaistout You wereall, every V1 Viens Come vazi Vas-y Go VrMan Vraiment Really X crois, croit believe XLnt Excellent XLNT, excellent y aya Il y a There is, there are French Texting Rules The basic rule of texting is to express yourself with the fewest number of characters possible. This is done in three ways: Using abbreviations, like  TLM  for  Tout Le MondeUsing letters that are pronounced like the desired sounds, like  OQP  for  occupà ©Ã‚  (O - CCU - PÉ)Dropping silent letters, especially at the end of a word, like  parl  for  parle Patterns 1 replaces UN, EN, or IN2 replaces DEC replaces CEST, SEST, SAIS, etc.É replaces AI, AIS, and other spellings of similar soundsK can replace QU (e.g., koi) or CA (kdo)O replaces AU, EAU, AUX, etc.T replaces TES and other spellings of the same sound Tip If all else fails, try reading the symbol out loud.

Rode and Road

Rode and Road Rode and Road Rode and Road By Maeve Maddox An article on the sports page of my morning paper quoted the owner of the winning horse praising the jockey: Victor road him really well. The reporter was reaching for the past tense of the verb ride: Victor rode him really well. The error is embarrassing, but etymologically speaking, the words ride and road are related. Note: If you’re interested in the scholarly details, explore the entries for ride, road, and raid in the OED. I’m just giving a short version. The verb ride derives from a word that had the following meanings: to sit on and direct a horse or other animal to travel on horseback to travel in a vehicle to transport goods by vehicle to direct the movement of a vehicle (of a ship) to lie or float at anchor; later (12th century) to float on the water All of these meanings still attach in modern English, for example: Having been reared in the West, Cooper knew how to ride horses and was able to get a job as an extra in a frontier film, The Thundering Herd (1925). The captain of a smaller craft might throw out an anchor if the ship needed to ride out a storm. The most common use of the noun road in modern English is to refer to a wide cleared pathway with a specially prepared surface along which motorized vehicles travel. In coastal place names, the plural Roads refers to a sheltered section of water where vessels may lie at anchor in safety: Hampton Roads  is the name of both a body of water and a metropolitan region in Southeastern Virginia, United States.   The ship  anchored in the Savona  Roads  and was reported to the Custom House on the same day. The Tuscarora left Southampton Water on the 30th of January,  but  anchored in  Yarmouth  Roads, and remained there until the 1st of February, when she proceeded as far westward as Portland. Related or not, rode and road are different words and careful spellers keep them separate. Want to improve your English in five minutes a day? Get a subscription and start receiving our writing tips and exercises daily! Keep learning! Browse the Misused Words category, check our popular posts, or choose a related post below:Creative Writing 101Round vs. AroundNeither... or?

Installation project Assignment Example | Topics and Well Written Essays - 1250 words

Installation project - Assignment Example The main purpose for this installation will be to ease the service delivery in the airport making it more comfortable for the travelers departing and those arriving. This will not be just limited to the passengers but all the activities that take place at the airport in general. The project will be meant to monitor movement of air traffic, movement of road traffic to and from the airport, movement of goods within the airport and to an extent the weather conditions at the airport. This information will be crucial in reducing the intensity of travelers while at the airport. While undertaking this project, it is important to understand that the area in question is a normal 2D earth surface that will have to be transformed into a 4D Euclidean surface using the transformation mathematical formula. The surface will further be embedded into maps and metrics using the same concepts as those used in 4D Euclidean space transformations. 2. A general survey will have to be conducted across the airport to determine the general layout and nature of the airport. This will involve picking of data about feature s such as buildings and other structure s available at the airport. This task can be carried out by a surveyor or a GIS technician. 3. After analyzing the layout of the airport, the site engineer will choose a point at which the giant bear will be installed taking into consideration the movement of air traffic and passengers and also its proximity to the main travelers’

Real estate and capital structure decisions- Lease versus Buy Analysis Essay

Real estate and capital structure decisions- Lease versus Buy Analysis - Essay Example If the study proves to be promising, that the company will most likely to expand in 2-3 years, the idea of buying a space could then be possible---but it still might not be the best option. Company expansion may not even mean an extension of the same space. It would sometimes be practical, and this is what most businessmen prefer, to rent a space from a different area. This aims to win a different market and could then maximize company profits, or at times, if it is not a marketing company, this option will give its clients an option on which office is more accessible. Another factor is the present company financial status on the STL’s immediate needs. Having a twenty full-time staff, STL could then be considered as a small enterprise, and its financial statements show that STL is not earning a quite impressive profit; in fact, the statement indicates that the company will be immediately affected of the lease rent increase. Below is an illustration of a basic computation to determine the distinction on the lease expense and the purchase option. The trading company is currently paying an annual amount of HK$970,000 or HK$80,833.333 every month, whereas, an additional ten percent would require the company to spend HK$1,067,000 every year or HK$88916.667 each month. This amount, when multiplied by 10, would make the company an allotment of HK$10, 670,000. Please note the possibility of another increase for the lease. This would be dependent on the length of time of the contract, if STL has a 10-year lease contract it is not likely to endure another price rise. The amount, however, was multiplied by ten, for the anticipation of a ten- year-mortgage should the company decide to purchase its own space. The interest would depend on the market and economy; however, it is evident that the purchase price does not have a great difference in amount. The purchase