Auditing Solutions Essay Example

Auditing Solutions Paper Examine a sample Of duplicate sales invoices for credit approval by the credit manager. D. Review the aged schedule Of accounts receivable to determine if receivables from officers are included. When the computed upper exception rate is greater than the tolerable exception rate, it is necessary for the auditor to take specific action. Which of the following courses of action would be most difficult to defend if the auditor is ever subject to review by a court? a. Reduce the tolerable exception rate so as to accept the sample results. B. Expand the sample size and perform more tests. C. Revise the assessed control risk, d. Write a letter to management which outlines the control deficiencies. Psychics of the following is not generally considered in determining sample size for tests of controls? Ad. Expected population exception rate. B. Risk of assessing control risk too low, c. Tolerable exception rate. D. Population size. 25 Which Of the following statement is correct With respect to the quantification of sampling risk? easy. Sampling risk cannot be quantified. C b. Sampling risk can be quantified only When Nan-probabilistic selection techniques are used to select the sample. Sampling risk can be quantified only when probabilistic selection techniques are used to select the sample. D. None of the above. Easy The auditor may use which of the following criteria when using the directed sample selection technique? a. Items most likely to contain misstatements. B. Items containing selected population characteristics. C. Large dollar coverage. D. Any of the above, 27, Nan-sampling errors occur when audit tests do not uncover existing exceptions in the: mediums. Population. B, sample. C. Planning stage. D. Financial statements. 8 Which Of the following statements is correct With respect to the evaluation Of sample results? Medium c a. It is acceptable to make Nan-probabilistic evaluations only When probabilistic sample selection is used. B. It is acceptable to make non-probabilistic evaluations only if the auditor Anton quantify sampling risk. C. It is never acceptable to evaluate a Nan-probabilistic sample as if it were a statistical one. D. All of the above ar e correct. 29. Which of the following statements is a valid criticism of non-statistical sampling? Medium Ad. We will write a custom essay sample on Auditing Solutions specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Auditing Solutions specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Auditing Solutions specifically for you FOR ONLY $16.38 $13.9/page Hire Writer Many audit tests, such as tooting of journals, must be performed outside a statistical sampling context, b. The cost to performing random selection or testing often exceeds the benefits. C. Non-statistical sampling does not differ substantially from statistical sampling methods. D. Conclusions may be drawn in more precise ways when using statistical 30 tedium Which of the following methods of sample selection is appropriately used when selecting a random sample? D a. Use of random number tables. B. Use of computer generated random numbers.

Business Ethics When the Work

Business Ethics When the Work Work-life balance is a flexible working program that has become common in several organizations in the US. Some firms have introduced flexible working hours for their employees, who need to balance between family and work responsibilities. Work-life balance is a trend that has picked up in various places of work in the US. This work-life balance has an impact on relationships that employees have with each other. Workers who have children have found flexible working hours more rewarding for their careers and family lives.Advertising We will write a custom essay sample on Business Ethics: When the Work-Life Scales Are Unequal. specifically for you for only $16.05 $11/page Learn More The workplace environment is experiencing a lot of changes. Employers have realized the importance of offering their employees flexible work schedules, which help them balance between work and family life. However, the work-life balance approach is not getting support from all work ers as expected. Workers with no children and families to care for, feel that their colleagues who have families use this as a pretext to avoid performing their duties. They feel that they shoulder the burden of their absentee colleagues because they have to perform extra duties. It is difficult for working class parents, especially mothers, to balance their commitment to work and family effectively. However, some workers are very supportive of their colleagues who are forced by family circumstances to stick to flexible working hours. These workers understand the importance of their colleagues being involved in the lives of their children. A flexible work schedule makes such workers more effective. This is because of the satisfaction they get from performing their work duties and spending time with their children. Employees who are away from their work stations can be telephoned or emailed if an urgent issue that needs their input comes up at work. This has created a lot of harmony between workers, in firms which have work-life balance schedules. Many firms are finding it difficult to implement flexible work systems. Some employees do not have children but still need time to attend to their family members, who need their attention. Employees who care for their elderly parents or grandparents feel that their colleagues who have children are favored more by the work-life balance schedules than them. They claim that they also deserve to be given flexible work schedules, which allow them to care for their elderly relatives more. Human resource specialists argue that, for a flexible work program to succeed, all employees with alternative interests away from work need to be considered.Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More Employees in firms who offer flexible work schedules should focus on how their duties are going to be done during the period they are away. This will lessen the burden that is shouldered by their colleagues when they are away from work. Firms need to monitor the time each worker spends at the workplace, to determine every individual’s productivity level. A work-life balance program can only be effective if all employees communicate with each other easily, regardless of their locations. Workers also need to notify their colleagues if they are planning to leave their workstations early. Flexible working programs need to be fair to all workers to reduce resentment between them. Organizations need to meet crucial deadlines and performance targets. Implementation of a work-life balance program should ensure that productivity levels in the organization remain consistent. This case confirms that many firms face difficulties when implementing flexible work programs for their employees. All employees need to be given equal consideration when a flexible work program is being implemented.

Car Manufacturing and Costing Systems Essay Example | Topics and Well Written Essays - 750 words

Car Manufacturing and Costing Systems - Essay Example Meanwhile, by 1939, the UK car manufacturing Industries have reached to the extent where they seconded the United State worldwide in terms of manufacturing car, as there were 20 Independent car manufacturing companies based in UK. Additionally, according to Stephen King (2005) that "BEFORE THE Second World War, there were hundreds of UK car companies. Had you wanted to buy a car, you could have opted, in the 1930s, for an elegant Alvis. Going back a bit further, you might have preferred the rather underrated, yet classy, Albion. Now, with the administrators called in to sort out MG Rover, it looks increasingly likely that you will no longer be able to 'Buy British' at all unless you're heading for the niche world of Morgan or for self-employment as a taxi driver". The costing system that was used in most manufacturing companies in the 1930s was the volume based costing system. This therefore implies that this costing system must have been employed in the car manufacturing process in the United Kingdom during this period. A volume-based costing system is a costing system that assigns overheads to products based on the output level achieved. (Blocher et al, 2005). Overhead or indirect costs are arbitrarily assigned to products based on either labour or machine hours rather than based on the product's demand for activities and thus resources. (Blocher et al). A vA volume based costing system allocates costs to products using arbitrary methods such as direct labour hours. These systems have proven to be appropriate when manufacturing systems used to be labour intensive, when labour used to be the principal value-adding activity in the raw material conversion process. (Cooper and Kaplan, 1992). However, with the advent of sophisticated technological developments and automation of manufacturing processes, direct labour is no longer directly working in the conversion of materials to products. Instead labour is simply engaged in setting up machines and supervising production activities (Kaplan and Cooper, 1992). Under the volume based costing system products that are manufactured in low quantities tend to incur more costs than those that are produced in large batches. The costs incurred per unit on these low-volume products are usually higher than that for the high-volume products. (Kaplan and Cooper, 1992). Therefore, when a volume based costing system is used to allocate overhead costs to products both low- and high-volume products are allocated equal amounts of costs. (Kaplan and Cooper, 1992). Activity based costing (ABC) a cost accounting system that recognizes the fact that costs are incurred by each activity that takes place within the organization and that products (or customers) should bear costs in proportion to their demand for activities (Owe and Law, 1999) is the costing system that was used in the UK car manufacturing industry in the year 2000. This is so because car manufacturing in the year 2000 became computerised and the role of labour in manufacturing was mainly supervisory. Apportioning overheads using labour or machine hours while appropriate in the 1930s could not be appropriate in 2000. ABC was proposed by Professor Johnson

Intelligence brief analysis Assignment Example | Topics and Well Written Essays - 250 words - 1

Intelligence brief analysis - Assignment Example However, about a week ago, Iran’s senior negotiator said that in the next meetings, the discussions will only tackle nuclear issues (Black N.P). He stressed that the nuclear talks are not similar to military programs talks. Upon his arrival in Vienna, Zarif who is an official in the scheduled meetings said,† the committee believes they can finally reach an agreement†. The six world powers are: Britain, China, France, Germany, Russia and the United States. Their aim however, is to reach an agreement within at least six months. The previous deal has frozen Iran from its nuclear project so far until July 20, a period by which they think they will have already come up with an agreement. Difference of position in the discussion points might make a final agreement impossible because every party would like its interest met which is obviously impossible.US for example want some parts of the nuclear plant in Iran to be abolished if they are to get to an agreement. On the ot her hand, Iran insists that the only discussion they will hold will concern their nuclear program thus excluding their military (Khan N.P). Steven Erlangler.†Iran and 6 Powers Agree on Terms for Nuclear Talks.† The New York. 2014, NP. Retrieved on 26/2/2013, from, http://www.nytimes.com/2014/02/21/world/middleeast/iran.html?ref=nuclearprogram&_r=0 . web Black Ian. â€Å"Iran won’t discuss military programs, say officials.† The Guardian.2014, N.P Retrieved on 26/2/2013, from http://www.theguardian.com/world/2014/feb/18/mohammad-javad-zarif-iran-political-will-final-nuclear-agreement.

Savil Building by Glen Howells Architects Essay

Savil Building by Glen Howells Architects - Essay Example In its design, its response to the site, the climate, the design requirement, it has surpassed the programme. That's what makes it unique, 'high architecture' or in plainer words an award winner! This essay investigates the architectural qualities of the Savill Building with specific reference to the following themes: Beauty or the aesthetic value of every building is an important feature of every structure established within certain locations. It is also closely related to the time and place of the architectural event. Thus, modernists like Philip Johnson see deconstructivism as 'warped' and the International Style as 'pure'. It is about the contrast between 'perfection and violated perfection'.1 The many trends in architecture after modernism suggest a pluralist society where too many issues are equally important. However, in the collective concern for the environment and attempts at conserving and reusing and generally trying to contain one's carbon footprint, we may have finally, the one world- religion that will generate an aesthetic that may be most persuasive of recent trends.2 And the Savill Building illustrates this beautifully both figuratively and literally. Through improving the landscape of the park, the building creates a profound experience for the visitors making them feel like they belong to the landscape itself. The dome shape of the roof creates an illusion that the entire building is one continuous structure that follows the dictates of the landforms so sensitively that it is difficult to perceive where building ends and landscape begins. It fits in with its surroundings hand-in-glove, not just in terms of building profile but also in terms of its material for construction that was judiciously selected and felled on site itself. Of all the other features of the complex, the structure of the building stands out as the chief characteristic of the complex. Being a part of the whole landscape works well for the Savill Building as it utilizes the natural beauty of the location where the structure is established. The complete building created not only for catering to its distinct functions it aims also to enhance the entire natural landscape of the site3. This capability of the structure to bring out the natural essence of the beauty that the location itself posses makes the complete conception a complimentary element to the landscape. 2. Nature Seen and Sensed The major features of the shapes and elements that make up the building actually create a more sophisticated presentation of nature. The carefully crafted design that mimics the entirety of scale and location highlights the abundance of nature creating an 'environment of seemingly untamed, ever-productive free growth'4. A curved glazed curtain wall allows the visitor to view the 'spectacular' landscape over the terrace.5 The glazing allows natural light to enter the building giving it better chances of being appropriately lit during the day right up to mid afternoon. The glazing 'frames' the scenic view of the natural landscape of the gardens for which the interiors of the building create a perfect foil. Hills and

Free Cash Flow with a Firms Capital Expenditure

Free Cash Flow with a Firms Capital Expenditure Free cash flow and capital expenditure go side by side. What is important to find out is the existence of an association between the two in Sugar Industry of Pakistan by means of ascertaining the strength of their relationship. Annual financial statement data for 27 sugar mills of Pakistan, listed on Karachi Stock Exchange (KSE), was taken to calculate free cash flow and annual capital expenditure over the 2000-08 period. Linear regression test was run on the data to study the relationship between the two variables. The results hence proved an association confirming an existence of a relationship. Introduction Overview of the Sugar Industry of Pakistan Pakistan is the 5th largest country in the world in terms of area under sugarcane cultivation, 11th by production and 60th in terms of yield. Sugarcane is the primary raw material for the production of sugar. Since independence, the area under cultivation has increased more rapidly than any other major crop at around one million hectares. The sugar industry in Pakistan is the 2nd largest agro based industry comprising 81 sugar mills out of which 27 are listed on Karachi Stock Exchange. The annual crushing capacity of the industry is over 6.1 million tones. Sugarcane farming and sugar manufacturing contribute significantly to the national exchequer in the form of various taxes and levies. Sugar manufacturing and its by-products have contributed significantly towards the foreign exchange resources through import substitution. Sugar production is a seasonal activity. The mills, at an average operate for 150 days a year whereas the supplies are made throughout the year. As the industry n ow has large daily crushing capacity there are efforts to reduce the production even further. About the subject The purpose of this research is to examine the significance of free cash flow in relation with firms capital expenditure. Many researchers have studied the relationship built around free cash flow and have argued that managers have to play a vital role in deciding where free cash flow eventually ends up. Something known as an agency problem is widely discussed and commented on by several researchers. This problem talks exactly about the conflict of interest between managers and shareholders. Shareholders are interested in earning as much dividends as possible which would increase their value. On the contrary, managers think for themselves. They tend to invest the available cash flow in projects that would not necessarily increase shareholders value but ensure that the tenure of the manager is as extended as possible. New investments would mean more responsibilities on managers thus their uninterrupted length of service is required in the long term interest of the firm. Going one step ahead of agency problem, this study is related to free cash flow which shows an association and a relationship with the capital expenditure. Free cash flow is a  measure of financial performance and one of the sources of capital expenditure in firms. Managers can either disburse the available cash among shareholders in the form of dividends after  keeping aside the money required to expand or maintain its asset base or hold it back for developing new products, making acquisitions, and reducing debt. At this point in time, it is imperative to note that negative free cash flow in itself is not bad. If free cash flow is negative, it  could show that a company is developing new products, reducing debts or even making large investments. If these cash out flows earn a high return eventually, the strategy has the potential to pay off in the long run. Capital expenditures (CAPEX) are those cash outflows that create future benefits for the firm. A capital expenditure is incurred when a business outlay funds to acquire or upgrade physical assets such as property, industrial buildings or equipment. CAPEX is commonly found on the Cash Flow Statement as an investment in plant, property and equipment or something similar in the investing section. Companies listed on stock exchange will often list their capital expenditures for the year in annual reports, which allows shareholders to see how the company is using their funds and whether it is investing in its long term growth. The hypothesis tested in this study is accepted and thus a relationship between free cash flow and capital expenditure is established. Literature Review Cash flow is determined by integrating the cash receipt and disbursement items from the income statement with the change in each balance sheet item; the sum of the cash inflows equals the sum of the cash outflows. Whereas capital expenditure is the amount a company spends buying or upgrading fixed assets, such as equipment, during the year and acquiring subsidiaries, minus government grants received. The free-cash-flow (FCF) hypothesis by Jensen (1986) suggests that excess cash flow is wasted on value-destroying expenditure because managers have a personal motivation to grow the asset base of the firm rather than dispense cash to shareholders in the form of dividends. Cash flow has always been somewhat of a puzzle in the literature on the determinants of investment. Gugler (2004) argues that in a strictly neoclassical world, cash flow does not belong in an investment equation. Even than pragmatic studies dating back over 4 decades invariably document that cash flow and investment are positively related. The influence of internally generated cash flow on financing capital investment expenditure is well studied. But what is less well understood is the cause behind this influence. Modigliani and Millers (1958) Irrelevance proposition asserts that firms undertake all positive net present value (NPV) investments regardless of the financing source. Firms that pay low dividends rely more heavily on cash flow as shown by Fazzari, Petersen and Hubbard (1988). The first two gentlemen also found that such firms use working capital adjustments and not external financing to maintain the needed capital expenditure in order to smooth cash flow fluctuations. They further argued that in order to save cash flow, firms choose a low dividend payout policy. Calomiris and Hubbard (1995) proved that those firms have heaviest dependence on cash flow to finance capital expenditure which pay the highest taxes associated with undistributed profits. Devereux and Schiantareelli (1990) found that as compared to smaller firms in the UK, the large firms depend more heavily on cash flow financing. The reason they pointed out for such a trend was the manager/shareholder agency problems in these large firms mainly because of lower managerial ownership and higher costs associated with monitoring mechanism. In this thesis, further evidence have been provided on the role of free cash flow and capital expenditure through observing the data provided by the Karachi Stock Exchange. To measure the market reaction to such expenditure plans, the over and above returns around capital announcements have been used. It was moreover, found that the impact capital expenditure has on firm value that is financed by cash flow depends upon the characteristics of the firm making the expenditures. Firms show a strong positive relation between the level of undistributed cash flow and the level of announced expenditure, although large firms depend less heavily on cash flow as compared to the small firms and those firms that have high managerial ownership. Jensen (1986) suggested that those firms which had a large level of free cash flow were likely to squander it on unprofitable investments. As a result undistributed cash flow must play an important role in explaining capital expenditure by these firms. In addition, certain firms are more prone to the agency problems of free cash flow, especially the large firms which, as discussed by Devereux and Schiantarelli (1990), generally have a more diverse ownership structure. Jensen (1993) discussed such firms as the ones that have more costly internal control mechanisms. About small firms, Jalilvand and Harris (1986) commented that they are more vulnerable to suffer from cash flow restraint mainly because they have limited access to external captial markets due to higher transaction costs of public security isssues and the information problems. Therefore, Vogt (1997) believes that small firms tend to have profitable and at the same time unexploited investment opportunities. The available ca sh flow should be the main source of capital expenditure by these firms. Moreover, if cash flow is used by these firms to fund the capital expenditure, such an announcement must show a positive reaction in terms of appreciated stock prices. Jensen (1986) argues that there are agency costs coupled with free cash flow. His study broadens that argument and speculates that shareholders form their valuation decisions on firms reputations regarding free cash flow exploitation. This notion was tested by examining the stock price responses to equity offers, which generally aggravate the cash flow quandary, for firms differentiated by their recent avaricious behavior. The results suggested that shareholders react more positively to equity issue announcements if firms have obtained only assets related to their key business than to other equity issue announcements. On another occasion, Jensen and Meckling (1976) explained the agency problem between managers and shareholders. They unarguably stated that managers are supposed to be the representatives of the shareholders. But they tend to make those decisions that will maximize their own benefits as opposed to the shareholders value. In order to restrict them from doing so, they must either be provided incentives or be monitored. They further argued that in firms where managers have low level of insider ownership, have greater incentives to invest in unprofitable projects that stretch the firms beyond its optimal size and the expected return on new capital expenditure can be negative for such firms. Such actions would obviously be inconsistent with firms value maximization objective. Jensen (1986) suggests that stock prices are tendered downward to imply agency costs coupled with a firms free cash flow. In particular, managers have an enticement to use unfettered funds to benefit themselves instead of the shareholders. John and Nachman (1985) claim that agency costs can be alleviated through reputation building. Particularly, they demonstrate that the agency problem of underinvestment can be determined through reputation. The observed results recommend that managers build reputation through covetous activity whereas the shareholders state their response on pre-acquisition activity. In an ideal world, managers would disburse the entire free cash flow among the shareholders provided; the interests of shareholders and managers complement each other. This would maximize shareholders wealth and allow them to use the available cash for capitalization. Amihud and Lev (1981) however argued that managers have an enticement to minimize their employment risk. Employment ris k aims to explain the insecurity inbuilt in a managers tenure or the term of employment. Managers have an option of increasing the certainty of their tenure by diversifying the real asset portfolio of the firm and they do it by purchasing those assets that are unrelated to the primary line of business of the firm. Managers have an option of financing diversification projects by using the free cash flow that has been held back and not been distributed to shareholders, thus they need not seek funds from the capital markets. Easterbrook (1984) believes that it is easy to watch the managerial behavior of the firms when they seek funds from the well-performing capital markets. Therefore, on one hand it becomes difficult to keep a check on the performance of managers if they use the hoarded cash flow for the purpose while on the other hand, investors are unable to measure free cash flow as they are incapable of scrutinizing the investment opportunity schedule of the firm. Shareholders are expected to take any unencumbered cash request negatively, coming from the management for the purpose of diversifying. Unless they are provided sufficient proof, they will assume the request to be the acquisition of free cash flow. As a result of this ambiguity, stock prices will fall and show the residual loss caused by the probable misuse of free cash flow by management. Further, managers may wish to expand firm size, irrespective of the fact that it increases shareholders wealth or not, based on the assumption that exec utive promotion and compensation are positively related to firm size (Donaldson 1984; Baker 1986; and Baker, Jensen, and Murphy 1988). Cash flow is related to the expected return from new investment as shown by Myers and Majluf (1984). Those firms which have a shortage of cash flow and liquid assets might let go profitable investment expenditure instead of issuing mispriced securities to fund the investment. As a result, these firms might have unexploited investment opportunities that would increase firm value if sufficient cash flow could be generated to finance them. Capital expenditure of high ownership firms must show a dependence on cash flow and positive excess returns must be observed for these firms when they declare new capital expenditure. Morck, Shleifer, and Vishny (1988) described high levels of insider ownership to be associated with high levels of cash-flow-financed capital expenditure because of managerial-establishment issues. Firms with high insider-ownership levels might wish to finance expenditure with cash flow solely to avoid loss of control associated with weakening their ownership position or restrictions imposed by creditors. Lehn and Poulsen (1989) and McLaughlin, Safieddine, and Vasudevan (1996) defined Free Cash Flow to be operating income before depreciation, less interest expense on debt, less income taxes, less preferred and common dividends. Vogt (1997) calculated both cash-flow measures net of interest expense and dividends in order to control for managerial decisions affecting the level of undistributed cash flow. Ignoring these other decision variables might create a bias in the observed relation among cash flow, capital expenditure, and market returns. As an example he referred to a firm with high levels of cash flow that does not manipulate the agency problem. Such a firm will minimize undistributed cash flow by choosing high interest and/or dividend levels. It might pursue profitable investment expenditure and is unlikely to rely heavily on cash flow for financing. This firm must be associated with positive market responses around expenditure announcements. Using a cash-flow figure gross of interest expense and dividends would incorrectly combine positive market returns to firms with high cash flow rather than the correct low level of cash flow that it actually maintains. Vogt (1997) used 421 firms to observe relationship between cash flow and capital expenditure. When these firms announced expenditure increases, the level of announced capital expenditure seemed to be positively and strongly related to the level of cash flow. The strength of this relation increases for firms with profitable earlier investment opportunities, as firm size declines, and as the proportion of insider ownership increases. His further analysis suggested that considerable diversity exists in the capital markets response to capital expenditure financed by cash flow. The positive and statistically significant excess returns found in the sample of firms announcing increases is concentrated in the smallest of the sample firms, in firms with low cash flow relative to capital expenditure, and, to a lesser extent, in firms with high levels of insider stock ownership. Tests explaining the cross-sectional variation in returns reveal that excess returns for medium and small firms in the sample are positively associated with unexpected increases in planned expenditure. These tests also suggest that the capital market responds more favorably to the announced expenditure by small firms when the planned expenditure is more dependent on cash flow. On the other hand, excess returns for the largest firms in the sample are negative, however not statistically significant. Vogt (1997) observed that due to the fact that small firms and high ownership firms are most likely to face the liquidity crunch associated with asymmetric information, they are also the most likely to let go profitable investment opportunities in times of cash flow shortages. As cash flow rises, the set of profitable capital investment projects the firm can carry out also increases. As a result, capital expenditure announcements are met with positive shareholder reactions, particularly when expenditure is dependent on cash flow. Vogt (1997) concluded by observing that the apparent diversity in the markets response to capital expenditure decisions suggests different capital expenditure financing policies for firms that seek to augment shareholder value. The market values of small firms, firms with significant insider ownership, and firms that are generally cash flow confined appear to be improved, on average, by financing capital expenditure with cash flow. These firms might consider policies of saving undistributed cash flow through low payout and leverage policies. Such an action therefore encourages new capital expenditure from internally generated funds. However, all other firms seem to be less dependent on a cash flow retention policy to facilitate capital expenditure. In 1986 while explaining the free cash flow (FCF) hypothesis Jensen (1986), focuses on the agency issue. He argues that managers can increase their wealth at the cost of shareholders by not paying out the funds from a firms free cash flow in the form of dividends or debt financed share repurchases, rather investing them in unprofitable investment prospects. Devereux and Schiantarelli (1990), Strong and Meyer (1990), Oliner and Rudebusch (1992) and Carpenter (1993) later studied the role that agency problems play in the cash flow-investment relationship. Their findings turned out to be conflicting vis-a-vis the importance of free cash flow. Strong and Meyer (1990) found that share prices of firms that undertake investment expenditure with unrestricted cash flow experience negative performance while Oliner and Rudebusch (1992) found little evidence regarding ownership structure affecting the cash flow-investment relationship. The firms dividend decision has connotation for the FCF theory. According to Lang and Litzenberger (1989), dividends are one means of eliminating free cash flow. Vogt (1994) developed a model in this research paper where he showed that firms with the opportunity to exploit free cash flow will follow low dividend payout policies and cash flow will have a strong influence on investment expenditure. On the other hand, if firms are confined from obtaining external funds because of whatever reason, those firms with profitable investment opportunities will maintain low dividend payout policies in order to preserve on cash flow. Therefore his model was found to be consistent with Fazzari, Hubbard, and Petersen (1988); it predicts that low payout firms should be associated a strong cash flow-investment relationship. There has been considerable empirical evidence which indicate that internally generated funds are the primary way of financing firms investment expenditures. Gordon Donaldson (1961), in a detailed study of 25 large firms, concludes as follows: Management strongly favored internal generation as a source of new funds even to the exclusion of external funds except for occasional unavoidable bulges in the need for new funds. A later survey of 176 corporate managers by Pinegar and Wilbricht (1989) discovers that managers prefer cash flow to finance new investment over external sources as 84.3% of sample respondents showed their preference for financing investment with cash flow. Vogt (1994) explains the relationship of cash flow and capital expenditure by analyzing the free cash flow theory of Jensen (1986). As monitoring is assumed costly, and managers can benefit from overinvestment, he predicts that cash flow will significantly influence investment expenditure after controlling for the cost of capital. Investment expenditure of firms not paying dividend will be more influenced by cash flow than investment expenditure of firms that pay dividends. This follows because no-dividend firms are able to retain all cash flow and still not reach the retention constraint. For liquidity-constrained firms, cash flow and changes in the stock of the firms liquid assets should have a significant influence on investment expenditure. Firms with many profitable investment opportunities or large information asymmetries will have investment expenditure that is most sensitive to changes in cash flow, and should conserve on cash flow by paying low or no dividends. Firms indicat ing a liquidity constraint by not paying dividends will have the most significant cash flow/investment relationship. In a study; Fazzari, Hubbard, and Petersen (1988) discovered that cash flow has a strong effect on investment expenditure in firms with low dividend payout policies. They argue that this result is consistent with the belief that because of asymmetric information costs associated with external financing, low payout firms are cash flow confined. One reason these firms keep dividends to a minimum is to preserve on cash flow from which they can fund profitable investment prospects. Later in the year 1993, Fazzari and Petersen (1993) found that the same group of firms paying low dividends, even out fluctuations in cash flow with working capital to maintain desired investment levels. This result is consistent with the findings done by Myers and Majluf (1984) which states that the underinvestment problem arising from asymmetric information can be alleviated by the liquid financial assets. Carpenter (1993) studied the relationships between debt structure, debt financing, and investment expenditure to test the theory of free cash flow, comparing the restructured firms with the non-restructured firms. He observed that firms had increased their investment expenditure that was restructured by substituting large amounts of external equity with debt as compared to non-restructured firms. To him these results seemed to be inconsistent with free cash flow behavior. He believed that cash flow committed to debt maintenance must be correlated with reductions in later investment expenditure. Devereux and Schiantarelli (1990) and Strong and Meyer (1990) conducted studies that support the free cash flow interpretation. Strong and Meyer (1990) studied separately the investment and cash flow of firms in the paper industry into sustaining investment and discretionary investment, and total cash flow and residual cash flow. Discretionary investment and share price performance are negatively and strongly related. Discretionary investment and residual cash flow are found to be positively and strongly correlated. This evidence suggests that residual cash flow is frequently used to finance unprofitable discretionary investment expenditure. Study conducted by Vogt (1994) related to cash flow and capital expenditure predicts that firms not paying dividends should exhibit the strongest relationship, while those paying high dividends should show the weakest relationship between cash flow and investment expenditure. His result suggested that cash flow-financed capital expenditure is slightly inefficient and provides facts in support of the Free Cash Flow hypothesis. Regarding the small firms that paid low dividends over the sample period, Vogt (1994) commented that such firms relied heavily on cash flow and changes in cash to fund capital expenditure. Cash flow-financed growth by small, low-dividend firms is likely to be value- creating, whereas cash flow-financed growth is value destroying for large, low-dividend firms. He concluded by suggesting that managers of cash flow-rich companies may consider increasing dividend payouts as a method of increasing the efficiency of their capital expenditure decisions. A continued hig h-dividend-payout policy may also signal to shareholders that extra and expensive monitoring of capital expenditure decisions is unnecessary. Furthermore, since capital expenditures typically add to the amount of assets under managerial control and create more predictable future cash flows, such expenditures generate the opportunity to exploit free cash flow in following periods. Alti (2003) found out that investment is sensitive to cash flow. The sensitivity is substantially higher for young, small firms with high growth rates and low dividend payout ratios. The uncertainty these firms face about their growth prospects amplifies the investment-cash flow sensitivity in two ways. First, the uncertainty is resolved in time as cash flow realizations provide new information about investment opportunities. This makes investment highly sensitive to cash flow surprises. Second, the uncertainty creates implicit growth options relate to long-term growth potential but not to investment in the near-term. Having a weaker relationship with the value of long-term growth options, cash flow acts as a useful instrument in investment regressions. Gentry (1990) analyzed capital expenditure with total cash flow and found out that the percentage of cash flows going to capital investment ranged from an outflow of 60 percent or more. The giant companies invested a higher percentage of their total outflow in plant and equipment than companies in the other size categories. The small companies invested the lowest percentage of their total outflows in capital. There has been a research done previously that was applied to agricultural firms by Jensen (1993). The results were found to be consistent with previous studies for nonagricultural firms which showed that internal cash flow variables are important in explaining investment. It was found that the addition of internal cash flow variables can improve the explanatory power of agricultural investment models. In terms of elasticity, investment was more responsive to internal cash flow variables. Worthington (1995) has found that cash flow measures industry-level investment equations positively and significantly, even after investment opportunities are proxied by capacity utilization variables. The effect of cash flow is greater in durable goods industries than in non durable goods industries. Moyen (2004) explained the fact that the cash flow sensitivity of firms described by the constrained model is lower than the cash flow sensitivity of firms described by the unconstrained model can be easily explained. In both models, cash flow is highly correlated with investment opportunities. With more favorable opportunities, both constrained and unconstrained firms invest more. Raj Aggarwal (2005) conducted a study in which he concluded that investment levels are significantly positively influenced by levels of internal cash flows. Also, the strength of this relationship generally increases with the degree of financial constraints faced by firms. Overall, these findings seem strong to the nature of the financial system and indicate that most firms operate in financially incomplete and imperfect markets and find external finance to be less attractive than internal finance. Research Methodology Introduction The hypothesis tests the relationship between free cash flow and capital expenditure, concentrating on the Sugar Industry of Pakistan. The aim is to ascertain the strength of the relationship between the variables. In order to do that, linear regression seems to be the best test as it attempts to model the relationship between two variables by fitting a linear equation to observed data. One variable is considered to be an independent variable while the other is considered to be a dependent variable. The objective of multiple linear regression analysis is to use the independent variables whose values are known to forecast the single dependent value selected by the researcher. (Hair, 2006) Data Annual financial statement data for 27 sugar mills of Pakistan listed on KSE is taken to calculate free cash flow and annual capital expenditure for the period 2000 through 2008. Variable 1. Independent variable = Free Cash Flow (FCF) 2. Dependent variable = Net Capital Expenditure Independent variable: The FCF is calculated they way Lehn and Poulsen (1989) and McLaughlin, Safieddine, and Vasudevan (1996) defined it. It is operating income before depreciation, less interest expense on debt, less income taxes, less preferred and common dividends. Free cash flow = Operating income before depreciation – interest on debt – income taxes – preference common stock dividend. Dependent variable: Net capital expenditures are those where funds are used to acquire or upgrade physical assets such as property, industrial buildings or equipment. Change in fixed assets over a year is taken as net capital expenditure by the firm. Net capital expenditure = Current year fixed assets – last year fixed assets. Net capital expenditure = Ln (FA) Ln of fixed assets is taken to control the variability of the data. Sampling criteria Sample companies that are taken for the purpose of research are 27 sugar mills of Pakistan that are listed on Karachi Stock Exchange. Hypothesis Free Cash flow has a significant relationship with capital expenditure. Data analysis Annual financial statement data for 27 sugar mills of Pakistan, listed on Karachi Stock Exchange (KSE), was taken to calculate free cash flow and annual capital expenditure over the 2000-08 period. Model Summary R R Square F Sig. 0.302 0.091 23.676 0.000 Predictors = (Constant), FCF Dependent Variable = Ln FA The researcher has used statistical software SPSS 13.0 to process the data and run regression analysis on the variables. The results are interpreted in light of statistical text book by Hair (2006). All FCF and (ln) FA figures are in Million Rupees. R value: It is the sample correlation coefficient between the outcomes and their predicted values, or in the case of simple linear regression, between the outcome and the values being used for prediction. R value of 0.302 means that the strength of the relationship between FCF and capital expenditure is 30.2%. R squared value: the coefficient of determination, R2 is the amount of variance in the dependent variable that can be explained by the regression model. The R square of 0.091 means that 9.1% of the variability in the data is explained by the predictor. Out of the total free cash flow, 9.1% is used for capital expenditure. The F test for the regression model is significant which proves that regression model is best fit. Regression model summary is showing that FCF has a positive impact on net capital expenditure. Coefficients Model Unstandardized Standardized Sig. Coefficients Coefficients B Std. Error Beta (Constant) 3.251 0.107 0.000 FCF 0.004 0.001 0.302 0.000 Dependent Variable: Ln FA Unstandardized Equation: Ln FA = 3.251 + 0.004 FCF Standardized Equation: Ln FA = 0.302 FCF If FCF changes by 1 million, ln of net capital expenditure changes by 0.004, which means Net Capital expenditure increases by 1.004008 million. The regression coefficie

Happiness is the meaning and purpose of life Essay

â€Å"Happiness is the meaning and purpose of life, the whole aim and end of human existence†- Aristotle. Do you agree with Aristotle’s statement? Discuss why/ why not. While happiness in a scientific sense can be explained as the chemicals released throughout our bodies, it still doesn’t tell us fully why these are chemicals are sent and what it means in the overall human experience in scientific terms. From an artistic perspective happiness is the largest component in providing self-worth to one’s self and with its absence we see people delve into the depths of depression losing the motivation and ability to perform tasks and live life to its fullest, and in some extreme cases losing the will to live. On the opposite side of depression there is euphoria and this is where people experience moments in their life that they remember and cherish during times of reflection, it is at these moments when we find the most purpose in our lives especially when we enjoy what we are enjoying so therefore Aristotle’s statement can easily be viewed as correct as this essay will argue for. What does it mean to be happy? It seems that this is another one of those questions that can be argued in multiple ways but for this essay I will take Aristotle’s definition. Happiness, from Aristotle’s definition of a human as a being who recognises his potential to give form to himself (Colebrook 2006, p. 2). A person with depression and the utter lack of happiness views themself as worthless and lose their passion of living, losing much their ability and potential. This fact of people committing suicide when they are overcome with sadness demonstrates that without happiness human beings lose their meaning and passion in life. Without this passion and drive depressed people tend to isolate themselves and do not ‘live’ their lives to its fullest extent. It seems therefore that the purpose of our lives is to find those things that do make us happy, and then doing them. If there’s a certain person in our lives that makes us happy, we need to find a way to spend more time with them. Because if you’re not happy, you need to look at your life and think about why you aren’t feeling that amazing thing you want to be feeling. When a person reflects back on their life in their elder years the memoires they tend to remember are based around the feelings of joy and happiness such as the birth of their children or their first kiss, spending times with friends etc. These  memories are fundamentally the building blocks of their personalities and without these moments of happiness a person would more than likely feel unfulfilled in their lives in reflection. We see this time and again when renowned people who have achieved great accomplishments turn to drugs and seep into mental illness when they are not happy with the direc tion of their life. This then demonstrates that regardless of what you accomplish if you are not enjoying what you are doing you may lose meaning in your life and turn to unhealthy methods so that you can cope with your current life style. Thirdly when people have the available time and resources it is more than likely that they will spend this leisure time doing activities that make them feel happy and give them self-satisfaction. ‘Happiness can also be a by-product of working’ (Andersen, W, 2008) occupation that the person enjoys. It therefore seems that humans will go through burdens so that they may enjoy the activity of their choice. An example of this would be working all week in a occupation you do not enjoy so that you may go on a camping trip with your family, supporting the coming saying that people ‘live for the weekend’ as that is during the time when they are doing activities they enjoy, although these kinds of one off activities do not demonstrate lifelong happiness it must be something ongoing, a more long term activity that can be used as an example could be coaching a junior sport team. This therefore demonstrates if recreational activities are what people are working towards and it is what makes them happy it must then tie in with what they consider meaningful in life and therefore be its purpose. If you can find something that makes you happy, truly happy, then life will be a lot better for you. It can’t be something superficial, or something that only lasts for a day or two. It’s something that affects your entire life. It lasts. It burns inside of you and it doesn’t go out. That is happiness. It is therefore clear that Aristotle’s statement that happiness is the meaning and purpose of life can be argued as correct on multiple basis’s such as those people lacking happiness losing all meaning and purpose as explained in the second paragraph. In addition when people look back on their lives in reflection it is moments of happiness that people are most likely to remember and cherish and not those of turmoil and heartache. Furthermore people will pursue activities they find enjoyment and happiness in when given the opportunity demonstrating that they live for those brief  moments of time. In conclusion it is clear that Aristotle’s stat ement may well be correct but it is entirely dependent on the individual to find what makes them happy. References: Colebrook, C 2006, Narrative Happiness and the meaning of life Andersen, W, 2008, Journal of Christian education, vol 51, No. 2, p1/p17

Life on the Color Line Essay

A- Gregory Howard Williams wrote the book. Before you read the book you have no idea who he is. Once you read the book you find out that he is mulatto and was raised in a community that was extremely prejudice against blacks. The authors’ point of view is his own story. P-The book takes place in Virginia at the beginning of the book from 1943-1952, and then in Muncie, Indiana from 1952-1969. The source was produced in 1995. The meaning of the source doesn’t really change at all, but now that it is after the problems of racial segregation and discrimination, we are able to read it and look back on the problems of our society and make sure it doesn’t happen again. P- Other than what I learned from the book, I actually knew a lot. I knew that in the 1940’s-50’s there was a major problem with racial discrimination. I knew that the way whites treated blacks was terrible and unjust. I also knew that blacks looked toward whites as horrible people and that it was taboo to interracially date/marry. This helped me better understand why the whites were treating Greg the way that they were and why the blacks had a hard time accepting him into their community. A- The audience is for teenagers and adults. It’s pretty graphic so it is intended to be taken seriously and with an open mind. It is it is more so towards teenagers and people with hard lives to show that they aren’t the only ones going through something difficult, because he went through some really complicated times and is now leading a successful, happy life. R-This book was produced in order to show what life was like for the mulatto race and how difficult it was for them. It is an inspirational book to tell people that they can go through anything if they keep their eyes on a goal and work towards it, no matter how hard it gets. T-The theme of the book was trials and success. It tells of his early child hood having to be both white and black in a community that was extremely prejudiced. It shows how he finds his way by keeping with the black influence and embracing it as his own lifestyle. It shows the difficulties he had with bullies and ignorant people and how he used academics as a way to stay out of trouble. It shows how he has to live with an alcoholic father and how he takes care of him even though he would probably be better off not worrying about him. It shows how he went through an extremely difficult childhood and was able to graduate college with a doctorate in law. S-This book is significant because it gives us a deeper look into how messed up our society was during the late 1900’s. It gives us a better understanding into the life that we aren’t familiar with because we usually just look at the black or white side of the story. Life on the Color Line makes us realize that it was just as hard for mulattos in that time as it was for blacks.

Homework Grace Essay

Homework Grace Essay Homework Grace Essay F2 Case Study Analytical Questions Q1. Describe Master’s management style. According to Hickey (2005, pp.23-7), managers who are autocratic were rigid in their management method. From the case study we can see that Master has an autocratic management style. Firstly, when Master works with Engineering department staff, he failed to delegate authority to the stuff, in contrast, he interferes in the department management. Moreover, he never takes into account the staff’s opinion before he makes decisions. For example, he set a tight deadline without talking to the staff involved ,which caused the staff increasingly stressed and considering quitting the job. Therefore, Master held all the powder and never accept the other staff’s opinion. Q2. Imagine you are the management consultant referred to in the case study. What management style would you recommend that Master’s adopt to manage his different staff members? Firstly, Master needs to pay more attention to delegate authority to the two department managers. According to Bartol (2003, pp.369-370), delegating appropriate responsibility to the employees who can achieve the required task’s goals is one of the motivators which can promote the staff’s job satisfaction. Secondly, in terms of the two department employees, Master need focus on meeting the employees’ physical needs and security needs. According to Hickey (2005, pp.27-31), individuals have intrinsic needs that they are impelled to seek to satisfy. These intrinsic needs are arranged in four levels which are physic needs, security needs, ego needs and self-actualisation needs. The third need level means employees are desired to be valued or be praised. In the case study, when the engineering department staff tried to solve some problem Master told her that she has to get approval from him first. Thus Master failed to satisfy the third need level which is ego needs. Furthermore, some newer staff have been injured, therefore, Master unable to meet the staff’s physical and security needs level which is the reason why employee morale is at an all-time low. Q3. Using one or more motivation theories, advise Masters how to motivate his different staff members. Firstly, according to Bartol (2003,pp.369-370), delegating

The Public Sector Project Funded by XYZ Foundation Coursework

The Public Sector Project Funded by XYZ Foundation Coursework The Public Sector Project Funded by XYZ Foundation – Coursework Example Through this memorandum, a trial is being done to analyse the ethical issue pertaining to the policy decisions which has to be taken regarding the untrue reflection of the number of beneficiaries being catered under the public sector project funded by XYZ Foundation. Though this issue is under the jurisdiction of the management board and not the supervisor, I am addressing this memorandum to the supervisor keeping in view of the Organizational moral to adhere with the professional hierarchy involved. The works done in continuation with my predecessor to formulate a project proposal in order to attract funds from XYZ foundation has revealed that the previous office bearer had inflated the number of beneficiaries of the project to a count of ten percent. This was done in order to meet the fund receipt standards set by the funding agency. On the other side this fund was inevitable for the follow up activities of the project and the organization as well. Being the new administrator, I analyzed the ethical issue against the moral standards. To determine the moral standards of the ethical issue, the whole scenario was passed through the Cooper’s ethical decision making model whose first step was the perception of an ethical problem which was already realized. The second phase involved the description of the situation and the definition of the ethical issue. Here the trial of the previous administrator to project figures which was more than the actual ones in a scenario of Institutional and Project crisis was the situation of concern. The ethical issue was clearly defined as whether to keep on the hyped figures so as to ensure the fund receipt or to replace the figures with the actual ones. Identification of the alternatives was the third phase in Cooper’s ethical decision making model. On evaluation of the defined ethical crisis, there were few possible alternatives. One of it was to have relentless efforts in order to achieve the inflated number of clients by the time the grant was sanctioned. Another possible option was the correction of the figures to actual ones and the last alternative was to keep the proposal going with the hyped figures. The final step in Cooper’s model was the evaluation of each alternative against moral rules and ethical principles. The practicability of the first alternative was at stake as the grant proposal was due on a sooner date and the gap in the inflated number of clients could not be achieved by the time of proposal submission. The second alternative could have however resulted in the rejection of the fund leading to serious problems with the finance of the organization and the project as well. Though the alternative to keep the proposal going with the hyped figures poised doubts on the rehearsal defense or the publicity test, it was further evaluated against the ethical principles. The moral consistency with the Social standards and the organizational standards could be ensured with transparency in the intention of the option. However the principle of utilitarianism substantiated the lacunas of the suggested solution as it addressed the genuineness of the social cause intended and it proved to be a more practical solution with not even scare traces of Amoralism. Ladd’s concept of moral responsibility John Ladd has described formal organizations as "machines" in order to emphasize the constraints on their options for action.(Risser,2006). He tries to make the point that organizations some times are bound to procedures and policies and some times legalities leading to non compliance with the moral obligations to the society and towards the concerned particular task. His point is completely agreed upon as the non flexibility of the procedural undertakings of organizations often tends to move out and respond as per the ethical and moral requirement at particular point of time and with reference to the specific development involved. He further argues that an organization must be capable of non-programmed behavior, such as responding constructively to moral blame or disapprobation, to qualify as a morally responsible agent However his point that organizations have neither moral responsibility nor moral rights cannot be completely agreed to, as there exists many systems even with in the modern corporate world to address such issues. The concept of Corporate Social Responsibility is in a broader sense an example to this. However it is true that the context of ethics from an individual perspective is much easier to monitor and is more flexible than the Context for Ethics in the Organization. But this does not mean escapism of the organizations from the responsibility of following the moral and ethical standards. Ladd also relates the organizational moral perspective to a machine which is only capable of performing those functions that it has been designed or programmed to undertake. However this philosophy is also challenged in an ironical way, by the upcoming possibility of Artificial intelligence of the next generation computers. WORKS CITED Risser T, The Internet Encyclopedia of Psychology, 2006, Collective Moral Responsibility, 18 Oct 2008, Scott R, â€Å"Ethical  Decision-Making: The Link Between Ambiguity and Accountability†, 2002, Air and Space Jounal, 18 Oct 2008,

Law Notes on Behalf of The Peoples Republic of Zambeziland Essay

Law Notes on Behalf of The Peoples Republic of Zambeziland - Essay Example The PRZ asks the commission to take into account whether or not it has jurisdiction over this matter since Article 56(5) requires that all local remedies are exhausted, unless it can be shown that there is the excessive delay. As the African Commission previously decided, governments should have an opportunity to remedy human rights violations prior to being ‘called to account by an international tribunal’. No national remedies have been pursued by Zapo notwithstanding the fact that the PRZ has been working with the IMF and the World Bank as a means of addressing the consequences of the national disaster. Thus a claim that there is the exemption to the exhaustion of remedies’ requirement on the grounds that there are no adequate remedies would fail. With respect to derogation, the Banjul Charter does not address the issue of derogation at all and thus it neither forbids derogation nor does it set standards for derogation. Therefore, the only reasonable explanation for this omission is that the Banjul Charter expects derogation to be regulated by customary international law.   Under the fiduciary theory of human rights, states may derogate from non-peremptory human rights norms during emergencies as long as such derogation is intended to ensure ‘secure and equal freedom’. Derogation is therefore recognized as a means by which the state takes action for the good of the people and not as a means of advancing the interest of the state. Specifically, under international law, Article 62 of the Vienna Convention on the Law of Treaties 1969 provides specific guidance on the issue of derogation. To begin with, where termination or withdrawal from a treaty is not provided for in a treaty, states may withdraw from the whole of the treaty.6 In particular a change of circumstances in relation to circumstances existing at the time of subscribing to a treaty can justify withdrawal from a treaty.

How Gas Laws Apply In the Health Care Industry Research Paper

How Gas Laws Apply In the Health Care Industry - Research Paper Example Most of the arms and ammunition works utilizing the principles of the gas laws. A bullet utilized the gas pressure to be shot from the bullet. This high pressure is attained by igniting the gunpowder present in the bullet. Rockets also have the same principle but a rocket requires a lot more fuel to attain such a pressure due to its weight as compared to a bullet. In this way, the significance of the gas laws is in every aspect of life. Gas laws are applicable to most of the industries to provide goods and services to the customers. Gas Gas is a state of matter in which the molecules of the matter remains apart from each other, in this way, the volume of the gas remains higher as compared to its weight. Gas may be colorless and odorless but gases have odor and slightly light color like chlorine has a stingy smell while oxygen is colorless and odorless (West 2008). Difference between Gas and Other Type of Matter The other two states of matter are solid and liquid. The molecules of the solids are such liked to each other that the molecules can only vibrate maintaining their position because of external force. In liquids, the molecules are liked to each other but in relatively loose bond than that of the solids. In this way, the molecules can more from one place to remains contacted with the other molecules. In gases, the moles are free to move, there exists no bondage between the molecules of the gas. ... Pressure Pressure is a term, which is utilized when the freely moving particles of the gas collide with the walls of the container and collide with each other to make a force exerting against the wall of the container. The more the dimensions of the container, the lesser will be the pressure and the container with less dimensions has the more pressure for the same amount of gas. In the similar way, if the amount of gas is increases the pressure will be increased in the container with similar dimensions. The units of the pressure are Atmospheres (atm), Pounds per square inch (PSI), Inches of mercury (in.Hg) and millimeters of mercury (mm.Hg). While the SI unit of pressure is Pascal (Pa) or Newton per square meter (N/m2) while non SI units are Bar and dyne per square centimeter (barye). Standard pressure is considered as one atm (Halzner 2011). Temperature Temperature intensely affects a gas. Temperature is an external effect that affects the molecular motion of the gas particles. As t he temperature increases the random molecular motion of the particles, increases as the gas molecules take the heat energy and convert it to kinetic energy. In this way, the volume of the gas increases and thus the pressure increases. Similarly, if a container filled with an amount of gas is exposed to extreme lower temperature, the gas in the container contracts and creates a vacuum in the container, the container may sucker external gas to fill the vacuum. The standard value of temperature is 273K or 0oC. The units of temperature are Kelvin (K), Celsius (C) (Halliday, Resnick and Walker 2005). Chemical amount The chemical amount of gas is represented as the no of grams or no of moles. The amount in grams is calculated using the