Fluctuating Present Value Of A Cash Flow Finance Essay

Fluctuating Present Value Of A Cash Flow Finance Essay Answer: A cash flow stream is a series of cash receipt and payments over the life of an investment. It is the inflow and outflow of cash, which matters in practice. It is the cash, which a firm can invest, or pay to creditors to discharge its obligations, or distribute to shareholders as dividends. The assets are the items which are owned by the business. The level of interest rates arising in the capital market is associated with the cash flows `and the assets , when the rates increases , the availability of the funds decreases. As a result when the interest rates increase in the capital market, the obligation increases which leads to decrease in the availability of funds to invest in the investments. The present value of cash flow is equal to the sum of the present value of individual cash flows. The equation for present value of cash flow stream is as follows- PV= Where, PV=present value r= rate of interest t= the year n= the last year, where the cash flow occurs Interest rate is the rate at the interest is paid by the lender to the borrower for use of money by the borrowers from the lenders. So, the rise in the interest rates , the availability of cash flows streams due to higher rate of interest , the present value of cash flow streams will decline. 2. List and explain the points of financial impact on a company if it raises the credit standards required of its customers who utilized trade credit offered by the company. Answer: Credit standards are the criteria to decide the types of customers to whom goods could be sold on credit. If the firm has more slow-paying customers, its investments in accounts receivable will increase. Trade credit refers to the credit that a customer gets from providers of goods in the normal flow of business. In practice, the buying firms do not have to pay cash immediately for the purchase made .This deferral of payments is a short term financing called trade firms. The credit standard policy has significant impact on the financial condition of a company-The following are the financial impact on a company due to rise in credit standard . Decrease in credit sales- A rise in credit standards will have a limit on the buyers who will borrow from the company and as a result the sales will decrease as most of the buying firms do not pay cash immediately. This will lower the sales of the company leading to less in revenue generation. Decrease the demand-The rise in credit standards will lower the demand by the buyers which will lead to decrease in demand and decrease in revenue earning. Relatively faster average collection period- A rise in credit standards will make the average collection period relatively faster for the new customers leading to better collection process and increase in volume of cash in inflow. Prompt in collection by existing customers- The rise in standard will pull the collection by the existing customers and make the payments from them prompt and on time. Better return on investment- The rise in credit standards will lead to better return on investments made and credit allowed will be selected as the customers will be prompt in payments and the selection of the customers will be limited. 3. Define Weighted Average Cost of Capital and explain why a company must earn at least its Weighted Average Cost of Capital on new investments. What are the financial implications if it does not? Answer:- Weighted average cost of capital is organisations the calculation of cost of capital where each category of capital is proportionally weighted .A firm obtains capital from various sources due to the risk differences and contractual agreements between the firms and the investors, the cost of capital of each source of capital differs The cost of capital of each source of capital is component source of capital. The component costs are combined according to the weight of each component capital to obtain average cost of capital. The combined cost of all source of capital is called overall cost which also known as weighted average cost of capital. Thus, it is the overall return that firm must earn on its existing business operation in order to maintain or increase the current value of current stock. A company must earn at least weighted average cost of capital in new investments. By taking weighted average, the interest to be paid by the company for a investment is calculated. Wei ghted average cost of capital is the expected rate of return, weighted by proportion each to the overall financial structure. The minimum rate of return on the new investments must be earned so as not to reduce the shareholders. A firm should earn at least its average weighted rate on capital investment in its assets the weighted average cost of capital is used a discount rate to calculate the present value of the of a specific investment. If the firm does not earn the least average weighted cost of capital in its new investments, the firm will incur loss in that new investment, and so it should discontinue or should not invest further. The average weighted cost of capital is the minimum expected rate of return from an investment, so it should be calculated first and then the decision for the investment should be made. 4.As a corporation what are the benefits and ramifications of using convertible debt to finance a publicly traded company? As an investor what are the benefits and ramifications of purchasing convertible debt in a publicly traded company? Are there any conflicts between the goals of the investor and the goals of the corporation? Answer:- Convertible debt are the debts like bonds and debentures with an option to convert it into common stock in future date. The following are the benefits and ramifications of using convertible debt to finance a publicly traded company:- Attractions for the investors:-convertible debts will attract investors by providing safety of debt along with the option to convert it into common stock in future. The investors will lend money to the company with the view that the company will make regular interest payments and the return of capital. If the company achieves growth in future and the stock value increases, the investors has the option to convert it into common stock. Lesser fixed-rate borrowing cost-Convertible debt will allow the issuers to issue the debts at lower cost. Increase in total debt gearing -The convertible debt will increase the total amount of debt level in the company .It will provide additional funding to the company which will be beneficial to the issuers. Financing option- The convertible debts are good financing option for start up companies as equity shares pose a challenge for them. As the convertible debts carry low interest payments by the company, while remaining competitive. Fixed limited income- The convertible debt holders obtains fixed limited income until its conversion and it will benefit the company because more of operating income is available for the common stock holders. Voting solution is deferred- With the convertible debts, the voting rights of existing shareholders happens only on eventual conversion of debts. Ramifications of convertible debts to company- There are some complications for issuers as well .First one , is that financing with convertible debts draws the risk of debasing not only the EPS of its common stock, but also the control of the organisation. If a heavy part of the issue is purchased by one buyer, like investment banking company or insurance company, conversion will change over or take over the voting control from original owners of the company and toward the converters. This issue may not be a significant matter for bigger companies with millions of stock holders, but for the small company, it will be a real and important consideration. Due prominent use of debt will adversely affect a companys capability to finance operations in clips of economic downturn. If the company faces any downfall, it will experience great trouble in raising capital further. The following are the advantages and ramifications to the investors.- Safer investment -The convertible debts are the safer investment compared to buying common stock with returns They are less explosive than stocks and their value can only come down to a price where the yield would be equal to a non-convertible bond of the same terms. Strong protection- The convertible debts provide strong protection to the investors in the times of market fluctuations and at the same time providing periodic returns. Interest payments-The convertible debt holders have a right on the receiving of interest and periodic returns in spite of any downturn in the market. Larger claim on companys assets Convertible bond holders have a larger claim on the assets of the company as compared to the shareholders in case of collapse. More protection from economic downtrend- The convertible debt holder will have a gain during the economic downtrend due the option of conversion into equity shares. As a result, the market stock of share stocks will increase with market prices dissimilar for the debts where the interest rates are fixed. This means that bond holders will gain as during inflation because his money looses value more. Ramification to the investors- Convertible debts could have complication in the view that the debt holder will be obtaining considerably lower yield to maturity in comparison to the non-convertibles. But it is only a worry when the issuers equity does not gain the upward price predictions that would make taking the lower grant speculation worthy. Finally, the ability for predictions are reduced to a great extend when a call provision is bonded to the convertible bond. This will limits the upside and will let the debt holder to declare their debt at a discount to market. The goals of an investors towards the convertible debts is to invest in debts at lower cost and gain fixed returns whereas the goal of a issuing company is to achieve higher operating income with lower borrowing cost. 5) Which two of the six methods used to evaluate projects, and to decide whether or not they should be accepted, do you prefer as a financial manager?   Explain why you decided on these two and not the other four. List the perceived deficiencies of the four not selected. The six methods which are used to evaluate projects, and to decide whether or not they should be accepted are as follows:- Investment decisions for a project evaluation postulate special aide due to the following reasons The projects influence the long term growth of the firm. The decision for a project will affect the risk factor of the firm Evaluation of the project is an important tool as it involves commitment of large amount of finances or stocks They are one of the most difficult conclusions to arrive at. The six methods are as follows:- Accounting rate of return (ARR) Internal rate of return (IRR) Net Present Value (NPV) Payback Period Profitability index Modified Internal rate of return Accounting rate of return ARR is also referred as Return on investment (ROI), as it uses the information of accounting revealed by the financial statements, to measure the gainfulness of an investment. The calculation of ARR involves the ratio of the average tax after profit divided by the average investment done Disadvantages: it can be calculated in a lot of ways profit is not a good alternate option for cash flow adjustment is not considered to calculate the time value of money Impulsive break-off date Contrary decisions can be made. Net Present Value NPV is the method of measuring the investment proposals. It is the discounted cash flow technique that explicitly acknowledges the time value for money. It rightly takes that cash flow coming up from various time periods differ in values and are comparable only when their corresponding present values are taken out. Advantages Says if the finances invested will increase the firms value Takes into account all the cash flows Takes into account the time value of money Takes the risk of future cash flows. Profitability Index The profitability Index is the ratio of present value of cash influxes to the initial of cash outlay of investment at a required rate of return Advantages Says if the finances invested can increase the firms value Takes into account all cash flows of the project Takes the time value of money Takes the risk of future cash flows Provide ranking and selection of projects when capital is rationed out. Internal Rate of Return (IRR) IRR is the way of DCF(Discounted Cash Flow), which takes into consideration the intensity and timing of cash inflows and outflows. The concept of IRR is quite simple to understand in the case of a one-period project. Disadvantages It needs to have a projection of the COC (Cost of Capital) to make a decision The given value-maximizing decision when used to compare mutually exclusive projects may not give the proper decision The given value-maximizing decision when used to choose any projects when there is capital rationing may not give the proper decisions Its not useful in the situations in which sign of cash flows for a project changes more than once during the life of the project. Payback Payback is the number of years needed to retrieve the original cash expenditure invested in a project. If the project yields constant annual cash influxes, the computation of payback period is carried out by dividing cash outlays by the annual cash influxes. Disadvantages 1) the decision criteria is not that concrete to show if an investment increases the firms value 2) Refuses the cash flows beyond the payback period 3) Refuses the time value of money 4) Refuses the risk of future cash flows I will take into consideration the Net present value and the profitability index for the consideration of two of the techniques for the project which will be undertaken due to the advantages which has been described above. I dint find much disadvantages in those methods and so I have given the advantages of those two methods which will be taken under consideration by me, the other methods I dint find of much worth in respect to evaluation for the concerned project as they have less advantages and more disadvantages and so I have written the same above for them. 6.What are the benefits and costs of placing a financially troubled company into a Chapter 11 Bankruptcy proceeding? Is this a legitimate and ethical vehicle for management to use for the benefit of the companys stakeholders? A)   Bankruptcy is a legal process for financial debtors who seek to eliminate their debts. Bankruptcys governs the federal statutory law which is there in the Title 11 of the U.S. Code. It provides for federal procedures of statutes and courts which objects the debtors to put their financial matters under the hold of the bankruptcy court. Chapter 11 Bankruptcy Chapter 11 bankruptcy says to restructure a business under some kind of supervision, rather getting liquidated because the business will still be functioning, but in case of a whole new different circumstances, the benefits of the retirement may or may not be ceased. Protection Benefits Federal law entitles a person to get pensions with some protection. When an employee announces himself to be bankrupt, finances for pensions are not to be utilized for the repayment to creditors. Also, all the retirement benefits you have earned being an employee will not be enforced to him. Federal Insurance The federal government assures standard and effective retirement plans. Any employer who cannot fund Federal government will fund temporarily. This type of insurance is not eligible for 401(k) plans. Chapter 11 Bankruptcy is the most costly anatomy of Bankruptcy in respect to average cost front. It is the most expensive form of bankruptcy and the small businesses should also take this into consideration before filling the bankruptcy. It is expensive as it involves two separate elements which are debt repayment plan and reorganization plan a. The reorganization plan means the person has to convince the court and the debtors that you can put in profit very soon which should be detailed and supported by proper research wherein you have to show a budget through which you need to assess how you are going to pay your creditors in the next several years. Its a process wherein you have to negotiate the same with the creditors and the court. A minimum of $15,000 have to be paid if there is no disputes and expensive attorneys over your reorganization plan but for Chapter 11 bankruptcy it will exceed to $ 100,000 and also this amount can vary depending upon the attorneys and disputes filed by the creditors. I understand that its not an ethical and legitimate step for the stakeholders but when there is no words to express the matter in concern and already the things have gone wrong and worse there can be few things which, if kept in mind can at least fetch some benefits for the stakeholders Filling in Court This is the first way when you can file in the court for a recovery notice wherein you owe the creditors and attorneys that you will come up with the company in a stipulated years of time and also by paying a fees for the time being just to show a courtesy to the creditors and the attorneys. Cost Minimization In this approach, an effort to minimize the cost of Chapter 11 Bankruptcy can be exercised while it may not work in most cases. The matters can be sorted out with the help of an attorney a fee agreement which would imply that most of the paper work preparation planning and filling must be carried out by the concerned person and he would simply pay his attorney to act as a legal coach in case of any need or questions. Most of the attorneys may not accept this type of payment agreement due to the complexity of plan of Chapter 11. Warning The rate of success in Chapter 11 bankruptcies is exceedingly low, which means that a very small percentage of reorganization plans will actually obtain approval from the court. As without the approval the plan will be worthless. There will be higher chance of spending lot of money and putting together a plan along with creditors negotiation and attending to win approval from the court, but this could be a failure too.

The Concept of Economy

There have been diverse views from various scholars on the meaning of economy. Of this various definitions includes; Economy is a term derived from the Greek word ‘OIKONOMOS' which means â€Å"One who manages a home†. Even though the term Economy is derived from the Greek word, history has shown that the Babylonians and their neighbouring towns were the first to develop any form of economics as it regards laws and rules. According to Wikipedia (2018) â€Å"The contemporary concept of the economy wasn't popularly known until the American Great Depression in the 1930's†. However, prior to this period, the concept of economy had passed through different phases some of which included; Primary, secondary, Tertiary and Quaternary stage of the economy.What then is Economy?Economy as defined in Investing Answers (2018) â€Å"Is the organised system of human activity involved in the production, consumption, exchange and the production of goods and services†. It is an organised system where money is made through the production and distribution of goods and services. The Oxford Living Dictionaries (2018) also defined economy as ‘the state of a country or region in terms of production and consumption of goods and services and the supply of money'. There are diverse ways of measuring the economic activities of any nation. Some of these ways include;  Gross Domestic ProductsExchange rateStock MarketInterest RateUnemploymentCHINA AND ITS ECONOMYPopularly known as the People's Republic of China. China was established on January 1, 1912 after the Xinhai Revolution that Qung dynasty era. The country is situated in East Asia and is referred to as the most populated country in the world with an estimated number of 1.404 billion people. In terms of land mass after Russia, China is the second largest country in the world. In the world in general, there is a popular conception that the Chinese people can be used for cheap labour. However, despite this notion, the country is the largest emerging economy in the world and is mostly engaged in manufacturing, industrial production, servicing and agriculture. As at 2017, China became the world's largest economy through its purchasing by making $23.12 trillion in comparison to European Union and the United States of America at Second and Third position respectively. Despite being the largest economy in the world, China remains a very poor country with regards to standard of living. This low standard of living attracts people and businesses to the country. Most of China's economic growth is dependent on the exportation of machinery and equipment. Apart from machinery and equipment, other components of China's economy includes; real estate, infrastructure, ports, railways, pipelines, aluminium, copper, cement, steel, exchange, reserves etc. In recent time, China has witnessed a slowdown of its economy which resulted to a slower growth in its GDP. Most of the changes that affects economic growth centres on change that has labour, productivity and capital. In the case of China, the decline in its economic growth is attributed to the huge technological gap between China and other rich countries. Another that contributes to decline the economy is an increase in Country's debt.CHINA AND THE WORLD'S ECONOMYThere is the doubt that in comparison to the world's economy, China's economy is a strong force to reckon with whether or not it is the largest or second largest as measured by GDP. In 2007, from being the sixth economy as at 2002, China was declared the world's largest economy with a total of $23.12 trillion as against the European Union and U.S respectively. This does not dispute the fact that when considering the per capital income of the average man in China, the country's populace comprises off relatively poor people o r that the gradual slowdown in the economy brings with it a lure of fear in the minds of their nations. According to Gutte Wallin Pederson (2002) ‘China's growth has primarily been driven by market oriented reforms and the opening of the Chinese economy to the rest of the world. Other components of China's economy include manufacturing and production of machineries at low costs, foreign direct investments, exportation, agriculture and importation of things consumed in the country. China has contributed immensely to the GDP growth of the world. It is quite central to the world's economic growth. Between 1980 to 2011, China recorded an annual growth of about 10%. A significant thing occurred when China decided to join the World Trade Organization in 2001. This is because along with the accession came China's pledge to provide fair treatment to WTO members ensuring that their enterprises where given the same treatment as that of the Chinese and vice versa. Most of China's economic growth in the world centres on physical capital and human capital. Labour force in China gross rapidly. Countries all over the world regards China's labour force as cheap as such would rather have them in their employ yet a large populous of the workforce has not been tapped. Apart from having a cheap workforce, cost of living in China is also cheap. This explains why countries now go to China to establish companies in other to access raw materials and lower their cost of manufacturing and production. For a country like the USA, China still remains the highest manufacturer of toys. China also exports manufactured products such as phones, electronics, clothing, furniture etc. Most countries depend on China for products they consume. Example African Countries. Despite being the highest exporter of consumer goods all over the world, China is the second largest importer in the world. The country because of its limited natural resources contributes largely to other countries GDP in terms of imports. Most commodities that China imports include; crude oil, petroleum gas, iron ore, lead, copper, palm oil, asphalt etc. For instance, the country's importation of integrated circuits accounted for about 44% of Malaysian exports for 2016. China is one of the major players in the arms market. Prior to now, China was one of the importers of conventional arms. However, in recent times, the reverse has become the case with the country being the 5th largest exporter of these arms as ranked in the world. According to China power (2008) â€Å"Between 2008 and 2012, China exported $14.4 billion worth of conventional weapons across the globe†. During this period, most percentage of arm supply made by China went to Asia and another fraction of Africa. China's neighbours and some parts of America have not been left out of the arm supply trend. For instance, between the aforementioned years, the country provided arms worth $1.86 billion to Bangladesh which is about 71.9% of Bangladesh arms acquisition during this period (China Power 2018). As pointed out by Alec Ash (20177) the basic areas which China intends to drive the world economics' growth and reforms are;a. Innovation-driven economy, tapping the potential of businesses both big and small.b. One belt, one road initiative, connecting trade markets across Eurasian land and sea.c. A rising middle class, growing in number spending power to drive consumption.d. Financial market liberation, speeding improvements in the Chinese market.e. State-Owned enterprises, opening biggest industries.f. Oversea investment, leveraging Chinese capital to revitalize the global economy.g. China intends to be more involved in the world's economy irrespective of being a major player already as the country is gradually becoming a consumption driven economy.Despite being a key player in the world economy, the world itself has witnessed a slowdown in the Chinese economy in recent times. This is because its service sector is suffering from the effects of its workforce population ageing and i ncrease in wages to meet global standards. The use of technology has also declared some job roles obsolete. Justin Kuepper (2017) opines that â€Å"many economists believe the country would have to migrate from manufacturing to services as a primary driver of GDP, just as other developed countries like the United States and those in Europe have done in the past†. There is no doubt that their slowdown will affect economies globally. It may have a deflationary effect on most economies. For instance, countries that exports goods to China will experience a decline in demand for the goods by China. What this implies is that the decline in demand for goods/services will lead to a drop in their price thus reducing the export GDP of these products. Example the demand for crude oil has reduced thus leading to a decline in price of crude oil. These days, China goes to the extent of rendering services in exchange for free crude oil. China's demand for these products will be slow. Other factors contributing to these slowdown include a rise in debt and gradual close of technological gap between China and other countries thus reducing the demand for Chinese products and reducing its productivity growth. Irrespective of what the effects of this slowdown may imply there is a need for countries to brace themselves for the challenges that lie ahead of them globally. Some of the way they can handle ways situation include, reduction of commodity exposure, diversification of investment hedge with puts on Chinese EIF's (Justin Kuepper 2017).IMPACT OF CHINA ECONOMY ON NIGERIAN ECONOMYRelating the impact of China economy to Nigeria, it will not be misleading to say that her impact on the Nigerian economy is quite enormous. It will not be undermining to say that Nigeria is one country that's hugely dependent on China. Most products used in Nigeria are tagged with â€Å"Made in China† labels that ranges from toys, to plastics, household items, machineries, electronics, clothing etc. Nigeria is also dependent on China for some raw materials.Nigerians also negotiate with the Chinese for customized products only for the Nigerian market. In recent times, the Nigerian economy has experienced an advancement in industrialization. This advancement has encourage the production of locally made products and reduced the country's dependence on goods from other countries in terms of economic boost, the country's bilateral ties with other countries of which China is inclusive has also brought about an increase in foreign investment. Nigeria continually comes up with policies that do not only aim at strengthening its bilateral ties but are also targeted at ensuring it is exposed to a wide range of options as regards to the quantity and quality of goods consumed by its citizens in process bring about a reduction in the poverty level. Some of this policies includes; Structural Adjustment package, Trade liberation Policy. The question to be asked is â€Å"Do these policies really help in giving the country trade advantage in the long run?† The major factor contradictory to Nigeria/China bilateral ties is labour force. The Nigerian policies as enticing as they may seem may only suffice for the country's immediate needs. There is little or no transfer of technological knowledge due to language and cultural constraints, Nigerian institutions are not accountable, transparent or credible in their dealings. Despite the above limiting factor on the part of Nigeria, China have been having currency swap dealings with different countries of which Nigeria is partisan. As stated by the Central Bank of Nigeria (CBN) Governor, Mr Godwin Emefiele, the currency swap agreement is targeted at helping both countries achieve the following;a. Provision of adequate liquidity of local currency for industrialists in both countries,b. Aid manufacturers businesses in China/Nigeria to access funds to import raw materials from both countries,c. Nigerian businesses who impart from China will be protected from the frequent fluctuations and effects of third party currency.d. It will help people in West Africa have access to China's local currency as Nigeria will be the trade hub in the region for this purpose.Since the availability of natural resources is limited in China, the aforementioned economic giants depends on Nigeria for Agricultural produce and crude oil. The importation of these goods from Nigeria helps increase its exportation quota in terms of GDP although in recent times, China would rather offer free services to Nigeria in exchange for free crude oil.

Learning Essay

Learning is a complex process that involves the acquisition of knowledge and skills through instruction, which modifies the behavior of man. (Merriam-Webster, 2008) Moreover, learning is the act of obtaining new information by undergoing educational instruction, reading, and other ways of gaining facts and information. Two types of learning characterize the process of acquiring information for learners. These two types of learning include cognitive or perceptual learning and behavioral or stimulus-response learning. These two shall be discussed in the following paragraphs in order to explicate the concept of learning and the role that cognition and behavior play in the process. Behavior plays a significant role in learning. Interest in learning, for instance, given that interest is a behavior, increases potential to accomplish academic success. Primarily, interest in learning as a behavior motivates people to attend programs in educational institutions, which lead to classroom instruction and learning. Interest is one efficient predictor of success in students. (Renningner, et. al. , 1992) There are established theories of learning which support the significant role of behavior in learning. Classical conditioning, authored by Ivan Pavlov, follows the theory of stimulus-response behavior. When applied to learning, the theory suggests that a particular stimulus influences response. Moreover, the theory explicates how behavior is developed, and in turn how certain behaviors influence learning. Basically, if a person is motivated to learn within the classroom environment, his behavior leans toward learning. This behavior produces desirable learning outcomes from the individual. (Staats, et. al. , 1963) The theory of classical conditioning has evolved throughout the years, and B. F. Skinner developed the concept of operant conditioning. Operant conditioning is similar to Pavlov’s theory of classical conditioning, such that both theories suggest behavior as an integral part of learning. However, operant conditioning relies on the manipulation of stimulus or external factors in order to influence the behavior of learners. Positive reinforcements for desirable learning behavior motivates individuals to learn, while negative reinforcements that are administered for negative learning behavior reduces its occurrence. Reinforcements act as consequences to actions, whether positive or negative, which influences how individuals behave. (Huitt & Hummel, 1997) Behavioral learning may be applied in the classroom through motivation in the form of praises and rewards, and punishment. For instance, in order to arouse the interest of learners to attend school everyday, teachers should give incentives and punishments such as checking the attendance every day and giving rewards for learners who have complete attendance. On the other hand, learners who are always absent or late, are given rewards such as putting them in detention, extra work in the form of quizzes, assignments, etc. As students learn the value of being present every day because of the rewards, merits, and acknowledgements that they receive every day, they are able to understand why there is a need to attend classes and are able to adapt the behavior of coming to class regularly. For those who are always absent, thus, receiving demerits and punishments, they learn that in order to avoid being punished and receive rewards instead, they should go to class on time each day. This idea changes the behavior of students who are always absent. The basics of behavioral learning delve into the complex personality of learners and seek to understand the motivational techniques and strategies that incite the desire to learn from individuals. Determining these motivational techniques and strategies allows teachers to adjust their instructional techniques within the learning environment in order to adapt to the desires of learners and manipulate these desires to incite desirable learning outcomes. The secondary objective of behavioral learning is to lessen undesirable learning behaviors. Cognitive learning does not simply rely on stimulus and the response of learning in order to acquire necessary information for the learners. The mechanisms inside an individual’s brain form the basic concepts underlying cognitive learning. These mechanisms are called cognitive processes. Cognitive processes include the acquisition of knowledge and new information and manipulating these acquired knowledge and information to form concepts and ideas that are meaningful. (Think Quest) For instance, the concept of the color wheel is learned by determining all the different colors that make up the wheel, such as red, blue, green, orange, violet, etc. If colors are identified by their names and their appearance, the individual also learns to categorize primary colors from secondary colors, and secondary colors from tertiary colors, or tertiary colors from neutral, etc. Through this information, the concept of mixing primary colors to form secondary colors, etc. is learned. Cognitive processes that are involved in learning the concept of colors in the color wheel include observation, analysis and interpretation. Moreover, cognitive learning relies on the senses, such as hearing, sight, feeling, etc. , reading and comprehension, experience, analysis, observation, among others, in order for individuals to learn. (Think Quest) This is supported by theories authored by Piaget and Vygotsky. The socio-constructivist and socio-cultural theories relate cognition to learning, such that learning takes place through social interaction. Funderstanding, 2001) For instance, problem solving which entails knowledge and experience is influenced by social interaction with other people. A learner’s problem solving skills is derived from interpretation of his cultural background, how he sees other people and the world that he lives in. Basically, an individual’s schema, which is used to solve his problems, depends solely on social interaction, his experiences , and how he interprets these experiences.

The Arbitration and Conciliation Act - Free Essay Example

Sample details Pages: 4 Words: 1328 Downloads: 4 Date added: 2017/06/26 Category Law Essay Type Review Topics: Act Essay Economy Essay Did you like this example? Nigeria is witnessing probably her biggest growth commercially. Nigeria is the most populous nation in Africa, its population exceeding over 150 million people. The economy of this huge country is twice the economy of many African countries. Don’t waste time! Our writers will create an original "The Arbitration and Conciliation Act" essay for you Create order In the West Africa region, Nigeriaà ¢Ã¢â€š ¬Ã¢â€ž ¢s economy is about the size of all the member states put together. Nigeria has become Africaà ¢Ã¢â€š ¬Ã¢â€ž ¢s largest and most commercialized business hub. The size of the economy coupled with various commercial, business and investment activities both domestically and internationally in various sectors of the economy which includes International commercial Trade shows the level and size of economic activities in Nigeria. These busy sectors of the Nigerian Economy are constantly involved in International Trade and Commercial transactions. These transactions results in negotiations, drafting and interpretation of international contracts and commercial agreements between bodies that form international entities. These various sectors are involved in international trade and commercial transactions which results in negotiation and drafting of international contracts and commercial agreements. These sectors in the economy by nature a re mostly contractual and inevitably conflicts arise between contractual parties. The diversity of the parties to international commercial relation is reflected in their conflicting goals and point of views, making disputes almost inevitableà ¢Ã¢â€š ¬Ã‚  [1] Many of the sectors in the economy faces obstacle while conducting their business. Some of these obstacle are unforeseen for example changes in government policies might alter a conduct of business or a contractual term between business conductors, inflation might inflate lack of performance by the parties etc. willing or unwillingly parties breach of the terms of commercial agreements which eventually leads to disputes between the parties. Parties look for ways to solve their dispute. Majority of these businesses prefer to resolve their disputes through alternative dispute resolution mechanisms, and arbitration is often the dispute resolution mechanism of choice for these parties. 5.2. Legal framework The Arbitration and concillation act is the legal mechanism for modern commercial arbitration and alternative dispute resolution in Nigeria. The ACA is the primary legislation governing the enforcement of arbitration agreements in Nigeria. The act, known as the ACA, governs both domestic and international arbitration proceedings with separate provisions for each. The First Schedule to the ACA contains arbitral rules that govern the procedure of arbitration proceedings. Whereas these rules are binding and must be applied in domestic arbitrations, they only apply by default to international arbitrations, where parties to an arbitration agreement have not expressly agreed a different set of rules such as the ICC, LCIA or UNCITRAL.[2] Nigeria being a federation, each of its 36 component states has the liberty to enact its own arbitral law to deal with contractual disputes. In Nigeria, both state and federal laws regulate arbitration. However, the federal Arbitration and Conciliation Act Cap A18, Laws of the Federation of Nigeria 2004 applies throughout Nigeria to both domestic and international arbitration, and its provisions prevail over any state laws to the extent of any inconsistency. The ACA consists mainly of the provisions of the UNCITRAL Model Law. 5.2.1.Arbitration under ACA Part 1 of the ACA deals with arbitration which comprises of section 1 to 36. The section deals with arbitration in general, including Arbitration Agreement, Composition and Jurisdiction of Arbitral Tribunals, Challenge to the Appointment of Arbitrator(s), Conduct of Arbitral Proceedings, Recourse against Awards and Recognition and Enforcement of Awards. The applicable Arbitration Rules is flexible under ACA. Parties are at liberty to agree in writing on the applicable rules. Under the ACA parties to an international commercial contract, in solving their dispute, in a case it arises, shall write an application to the courts for arbitration. Arbitration shall be refferd to in accordance with the ACA rules, or any other international arbitration rules accepted by the parties. The basic legal requirement of an arbitration agreement under this law is that an arbitration agreement must be in writing or must be contained in a written document signed by the parties (section1 of ACA). Idigbe and yamah noted Section 1 presupposes that arbitration must be consensual and indicates that an arbitration agreement may be either an express clause in a contract whereby parties agree to refer future disputes to arbitration or in a separate document (Submission Agreement) whereby parties agree to submit their existing dispute to arbitration. An arbitration agreement may also be inferred from written correspondence or pleadings exchanged between parties.[3] The following additional legal requirements for a valid arbitration agreement can be seen in the provisions of the ACA: The arbitration agreement must be in respect of a dispute capable of settlement by arbitration under the laws of Nigeria. Section 48(b)(i) and 52(b)(i) of the ACA. The parties to the arbitration agreement must have legal capacity under the law applicable to them. Section 48(a)(i) and Section 52(2)(a)(i) of the ACA.[4] The arbitration agreement must be valid under the law to which the p arties have subjected it or under the laws of Nigeria. In other words, the agreement must be operative, capable of being performed and enforceable against the parties. Section 48(a)(ii) and 52(a)(ii) of the ACA.[5] 5.3. Enforcement and Recognition of New York convention/Foreign Awards in Nigeria The New York convention was adopted by the united nation conference in 1958 and entered into force in 1959. The convention expect countries parties to the convention, to recognize arbitration between private entities and aslo public entities, and enforce arbitral awards. The convention also requires countries to enforce and recognize awards made in foregn contracting states. The new york convention is regarded as the main instrument for international arbitration. Without international standards to govern enforcement, parties neither had a guarantee that the domestic courts would enforce their awards nor that the courts would treat foreign and domestic awards equally. Buruma elaborates à ¢Ã¢â€š ¬Ã…“For instance, the Netherlands is part of the European Union, on the basis of which a Dutch judgment can be enforced in 27 European countries. Enforcing a Dutch judgment in any other country will be much more difficult, time consuming and costly. An arbitration award, rendered in the Netherlands, however, can be enforced in over 140 countries, under the provisions of international treaties such as the New York Convention of 1958 to which the Netherlands is a party.[6] Nigeria is a contracting state to the New York Convention, having acceded in 1970. The New York Convention was incorporated and domesticated into Nigerian Laws by virtue of Section 54(1) of the ACA. It constitutes the Second Schedule of the Act and has been applicable in Nigeria since 14th March, 1988. Section 54 of the ACA. Section 54 imposes a qualification that, that state that, in order to sought any recognition and enforcement, the award rendered must been made in the territoty of a country that is party to the New York Convention and have resolved a difference arising from a contractual relationship. It is also relevant to state that even though the Convention was not adopted before 1988 and the country enacted no law relating to international commercial arbitration, a foreign arbitral award in an international commercial arbitration made outside the country could be enforced in Nigeria by the combined effect of sections 2(1) and 4(2) of the Foreign Judgment (Reciprocal Enforcement) Act, Laws of the Federation of Nigeria 1960, provide amongst other things, it was registered in the High Court in this country[7] Where an award was not made in a New York Convention state, a viable option is to seek the enforcement of the award of the award as a foreign judgment under the Foreign Judgment (Reciprocal Enforcement) Act. The development and of a harmonized regime for [1] AMAZU, A. ASOUZU, international commercial arbitration and African states, Cambridge university press, Cambridge, 2001, p.1. [2] Arbitration and conciliation act, laws of the federation of Nigeria. [3] ANTHONY, IDIGBE, OMONE FOY, YAMAH, international arbitration: Nigeria, ICLG, 2010, p.1. [4] Arbitration and conciliation act, laws of the federation of Nigeria. [5] Arbitration and conciliation act, laws of the federation of Nigeria. [6] HOUTHOFF, BURUMA, à ¢Ã¢â€š ¬Ã…“international commercial arbitration: an introductionà ¢Ã¢â€š ¬Ã‚ , in house counsel practical guide, 2010, p.14. [7] EPHRAIM, AKPATA, the Nigerian arbitration law in focus, west African book publisher, 1997, p.32.