Effects of the financial crisis on various UK industries

Effects of the financial crisis on various UK industries Economic Report The above graph shows the FTSE 100 index in the 5 years to the 14th October 2010.   The index value at any particular time is based on the share prices of the top one hundred by value with each organisation being weighted in proportion to its total market value (Pike, Neale, p.38 2009).   Despite this index only being a small percentage of the total companies in the United Kingdom it generally reflects the performance of much of the market. Prior to the financial crisis of 2008 leading to the crash in the markets-shown in the first quarter of 2009-investment in government debt was regarded as relatively risk free.   It is a sign of the fragile economy situation globally that investors no longer view such investments as a sure thing (Oakley, 2010).   This credit crisis has prompted investors to proceed with caution and despite initial positive trends the principles which underpinned investments in the past have been shattered resulting in large scale political reforms throughout much of the Western World (Future of investing, FT).   The suggestion of an unsteady recovery is reinforced by a recent article in the Economist which states that,   Big asset busts are usually followed by years of weakness as the over-borrowed repair their balance-sheets.   Experience suggests that several years of slow growth lie ahead.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Oct. 7th 2010 It goes on to state that the reactive measures will be the biggest synchronised fiscal tightening on record.   Governments worldwide have had their hand forced in to budget cuts and other measures to sustain growth out of the crisis.   Whilst this statement points to and assures uncertainty should be highlighted that growth albeit at a slow pace is thought to be likely. The current economic situation, specifically in the United Kingdom, is underlined by the massive growth in unemployment.   Gilmore comments that the number of workless households has increased to 3.9 million over the last two years an increase of 389,000 (2010, p 39).   Furthermore, high profile cutbacks remain prevalent with Boots and Hewlett-Packard announcing combined cuts of 2,200 workers in the UK alone (Clark, 2010; Felsted 2010).   Whilst over the past two years there has been an overall escalation in unemployment there are some signs of improvement.   The three months to July 2010 witnessed the number out of employment fall to 2.47 million (Gilmore, 2010). It can be said that the current times are very uncertain and on that account the correct investment strategy will be vaguer than ever before.   For that reason, the general investment strategy which will be employed is buy and hold.   Not all investments will be made in this manner, however, for the most part this logic will be applied.   The buy and hold approach can be justified by looking at the market trend since the FTSE 100 began in 1984: It can be seen that after a dip such as in 1987 and in 2000 that the market tends to recover so despite the fragile economic situation a recovery, albeit a slow one as mentioned previously, can be envisaged. Sector Reviews Sector: Power The power sector is one of the main constituents of the FTSE 100. Utilities and Oil Gas alone make up 14 of the 104 constituents which complete the index, together counting for nearly a quarter of the net market capitalisation for all the industries included. It can therefore be deduced that any reasonable change in the power sector as a whole has a great influence on the performance of the top one hundred FTSE listed companies (FTSE Fact Sheet, 2010). For consideration, the sector has been split in to three main sub-sectors: mining, water utilities and oil gas. All three sub-sectors witnessed their three year minimum around 2009 and have recovered strongly since with one exception to be covered in more detail: oil gas. Mining The recovery can be expected to continue in the mining sector as commodity prices continue to rise. One of the major mined commodities, gold, has seen prices soar in recent times increasing nearly six fold since 2001 (Post1, 2010) to its current levels of $1361.20 per ounce. The market expects this price will continue to rise amid speculation that the United States government will commence quantitative easing once more (Murchie, 2010). Barrick Gold and Anglo Gold Ashanti have recently raised equity to eliminate bad hedges and does not expect to return to hedging at any price (Yahoo! Finance, 2010). Thus, both organisations expect the price of gold to continue to rise therefore gold companies with proven reserves are likely to increase in value. This theory is reinforced by a Goldman Sachs analyst, writes Alistair Dawber, who predicts that Gold will hit $1,650 within a year (Independent, 2010). Water and Utilities Water and Utilities in the United Kingdom show a strong recovery after the first quarter of 2009 also receiving boosts from an exceptionally cold winter. Profits of ScottishPower rose 7.9% last year due to the bitterly cold winter and Britains biggest supplier of gas and electricity witnessed profits soar 46% to  £554 million (Macallister, 2010). The Met office commented that it had been the coldest winter in thirty years (2010). Long term forecasts predict that this winter will be colder than average with more precipitation than would be the norm. Should this hold true then share prices will increase on the back of higher demand for gas and electricity which eludes to the sector share prices to trend upwards. Oil and Gas The first graphic representation shows the FTSE 350 index for Oil and Gas producers. A sustained recovery from the low in late 2009 was seen until Q2 of 2010 which observed a sharp decline. This deterioration is largely due to the Deepwater Horizon disaster and its effects are clear. BP (formerly British Petroleum) are the second largest company in the FTSE 100 index (FTSE Fact Sheet, 2010) so any change in share price will have a large influence on both the sector and the whole economy. The second graph shows the correlation between the BP share price and the FTSE 350 Oil and Gas. The cost to BP, who are regarded as being ultimately responsible for the disaster, amounts to a pre-tax charge of $32,192 million. This amount relates to all costs sustained in relation to the Gulf of Mexico oil spill and the commitment to cover any future costs which BP feel they can estimate reliably (BP, 2010). As the cost of the disaster has already been absorbed by the company and the markets, assumi ng there is no further outfall, it can be expected that the market will continue to trend upwards and back towards its previous average. On this basis, the sector can be considered as a relatively safe investment. There is potential for very large returns within this sector however they arise with considerable risk. Those with a higher risk appetite may seek to invest in the companies partaking in the oil exploration taking place in the Falkland Islands. Investment Due to the positive nature of all three sectors in this uncertain economic period it has been decided that all three sub-sectors outlined will provide investment opportunities. This facilitates potential for excellent gains but at the same time it utilises one of the main strategies for managing risk, diversification (Jaeger, 2002, p.235). Sector: Transport and Leisure Transport and leisure is a broad ranging sector including companies such as Babcock International Group who specialise in a wide range of areas including defence to organisations such as First Group who are a leading transport operator in the UK and North America (First Group). As it is such a broad sector transport and travel and leisure will be combined due to the similar nature of the two sub-sectors. Food Beverages has been discounted for ethical reasons. Aerospace and Defence As much of this sub-sectors revenue comes from government spending, Aerospace Defence at first appeared to be a wise choice for investment although on closer inspection this was proved not to be the case.   This sector was eventually discounted largely due to the expected cuts in government spending in the United Kingdom and abroad which will have an influence on companies which rely on this spending to maintain profitability and current share price levels.   For example, Babcock International Groups revenues are 80% U.K based (Hoyos, 2010) which in the current climate is too much exposure to a single market.   The FTSE 350 index Aerospace and Defence shows the volatility across the sector throughout 2010. Automobiles and Parts Outside of the main organisations in this sector there is only comparatively small amount of information available outside of the major companies. Where the majors are concerned, a case could be constructed for investment however these are outweighed by the potential risks. In recent times there has been many disrupting events which have an effect on the volatility of share prices within the sub-sector. Three major car manufacturers, including one trading in the UK-Toyota, have announced large scale recalls. Toyota was forced to recall 10.9 million cars in the US and Canada (Simon, 2010) whilst both BMW and Dailmler AG have recalled a combined 698,800 vehicles. (Sky News, 2010)(WSJ, 2010). As well as the turbulent recalls demand for new cars in the UK has fallen and it is not expected that they will return to peak levels. Between 2007 and 2009 the amount of new cars purchased fell from 2.4 million to 1.9 million-of which 285,000 were purchased at a heavily discounted level under the Governments scrappage scheme (Sky News, 2010). The article goes on to state that sales figures are not expected to increase above 2 million for the next three years which would allude to a levelling of share prices at current levels. Food and Beverage The low which the FTSE 350 Food and Beverage experienced in March 2009 coincided with the bottom of the FTSE100, however, the dip was not as severe and the immediate recovery was swift and strong.   Whilst these are promising signs there has been a stagnation.   In Q2 and Q3 of 2010 the index has   fallen from its high of 541.81 in mid April to a its current level of 528.69 (Yahoo finance, 18th October).   In the same period the FTSE 100 after suffering from an initial drop recovered strongly and is now showing a positive growth curve in the short term.   It can be concluded that the performance of the sector as a whole is not matching that of other sectors which are performing well. An example of a poor performer in this sector would be Punch Taverns which is one of the largest pub companies in the United Kingdom (Punch Taverns, 2010). Shares in Punch Taverns are down over 15% in the last 52 weeks (Interactive Investor Trading, 2010). Travel Leisure A graph of the FTSE 350 index over the previous 5 years is shown. It can be seen that from its peak in 2007 there has been a huge loss in market capitalisation across the travel and leisure sector however this was met with a strong recovery from mid 2009 onwards and this trend looks to continue. The upwards movement of this index is underpinned by growth in many of the major companies in the sector such as British Airways, Ryanair Holdings and Easyjet. This shows growing investor confidence in one of the most troubled industries of the past 10 years. Investment It is this confidence and steady sustained growth within sub-sector four that makes the Travel and Leisure sub-sector the advised choice for investment however the other sectors will provide some potential for investment should an appropriate company be identified. Retailers UK retail sector employees around 3 million people. It is the 3rd largest in the world after USA and Japan. On a whole the retail sector generates around 8% of the UK GDP. 1 in 10 of the people in employment currently works in the retail sector. Shops account for more than a third of consumer spending; due to this the retail sector is very important to how the economy on a whole performs. Usually if there is a drop in retail, the GDP of the economy would be affected greatly as well. The year 2007 marked the beginning of the credit crisis which resulted in the UK facing an economic downturn. This affected many companies, including Woolworths. Woolworths before the credit crisis was one of the major companies in the retail sector. Due to the crisis, which lasted from 2007-2009, Woolworths went into administration on the 26th November 2008. During late 2009 market the end of the period of the recession, which allowed the retail sector to improve its growth, as shown in the graph below. Investment The retail sector is ideal because of its high growth before the credit crisis, this sector is now quickly recovering and should be expected to be at a high growth as before the credit crisis. There should be high growth especially during the Christmas period. The House leisure Personal Goods sector would be an inappropriate option in my opinion because it involves lots of manual and material costs. This sector will also gain lower growth unlike the retail sector, which should have higher growth. Telecommunications The telecommunication sector offers a wide variety of jobs and is an important sector for the economy. The UK is one of the leading locations for telecommunication in Europe. In recent times, the competition between telecommunication companies has sharply risen since the early 1990s. This is due to the rapidly increasing use of phone lines, internet and mobiles etc. This sector also was affected with the credit crisis during late 2007 as shown below on diagram. One of the largest companies in the telecommunications sector BT faced their third-quarter profits had been reduced to 81 per cent. This was due to the poor performance from the BTs IT network division. BT had also had to write off a lot of its contracts which resulted in a loss of  £336 million. But it should be considered that this was due to the credit crisis, now that the crisis is finished, most companies should start to develop more growth in the telecommunication sector. Investment Telecommunications is constantly developing through mobile devices, video calling and other services. Todays technology has an impact on the telecommunication sector, such as Apple, that supplies innovative telecommunication service through its Iphone. There telecommunication service offers many new services, which suggest this sector would be ideal for strong growth The Tech Hardware sector involves lots of constant research that includes innovation and development, which could involve lots of costs in this sector. The Electronic Electronic Equipment sector involves large costs of investment because of the development and material costs involved, you must take into consideration of the current competiveness in the market today. This sector makes up for 4 per cent of the Europeans municipal waste, which is growing three times faster than any other waste management system, as discussed by Waste online website. It would not be recommended to invest in the Media sector because of the competiveness in this market. Current organisations in the media sector are losing out from customers, due to the vastly availability of free media available online. Pharmaceuticals Biotechnology Sector: Chemicals General The pharmaceuticals and biotechnology sector is a massive industry, there are many companies involved with the field. The value of the global pharmaceutical market is expected to grow 5-7 percent in 2011, to $880 billion, compared with a 4-5 percent pace this year, according to IMS Health. The sector divides itself into two sub-sectors. Pharmaceutical companies: Develop and manufacture prescription and over-the-counter drugs (aspirin, cold remedies, birth control pills), as well as vaccines. Biotechnology companies: Create new biological substances for use in drugs and diagnosing tools through research and development. The sector is mainly occupied by small, extremely specialised, research firms. As these companies dont have a normal income flow, but rely more upon new discoveries to help fund future research any breakthroughs or licensing arrangements. As this can lead to large revenues which may help fund even further research. On the other hand due to the small size of the businesses any delays in acquiring funding may cause cash flow problems. Along with this trading can be very irregular as new discoveries can cause share prices to rocket. There has been a trend in the pharmaceutical industry whereby small biotechnology companies are carrying out the premature work on new discoveries, before selling their work to the industry leaders, which is quite similar to an outsourcing model. The end result allows the product to be sold in large quantities to a global market. The industry has seen very drastic changes over the past few quarters, since performance was affected by factors such as generic competition. The next 5 years suggest a major change between the introduction of new products and patent loses. One of the main reasons why the global pharmaceutical market growth, will be limited to 5-8% through 2014 is because over the next five years. Products that generate sales upwards of $142 billion will eventually face competition from generic products. Also upcoming products are not likely to reach the same amount of sales, as products lose their patent protection. Fig 1. The above graph shows the FTSE-350 of the Pharmaceutical and biotechnology sector over a period of 4 years. You can see the affects of the credit crisis in the first quarter of 2008, after this there is a slight increase in the market however the market crashes in the first quarter of 2009. Overall the sector produced total revenues of $615.1billion in 2008. One of the most profitable sectors of the market in 2008 was cardiovascular which was worth 19.8% of the markets total value. That is equivalent to $121.7 billion. Forecasts suggest that the growth of the market is set to shrink with a likely CAGR of 3.6% fro, 2008-2013. This should cause the value of the market to increase to $734 by the end of 2013. Top ten companies top 10 pharma bio.jpg Emerging Markets Other recent trends include focusing on emerging markets such as the BRIC countries (Brazil, Russia, India, and China). This is due to sales in emerging markets that have been growing at faster rate than sales in the established markets (IMS, 2010). Within the next five years these emerging markets will generate as much revenue as the traditional markets such as the U.S. market (largest pharmaceutical market) along with Europe and Japan. Source: IMS health Construction Materials Sector: Industrials materials This sector includes companies that are involved with discovering, developing and processing raw materials and mining/refining of metals, chemicals and forestry. Due to this sector supplying materials for construction, it heavily relies on a strong economy. This sector can also be very unpredictable as it is vulnerable to supply and demand due to prices of raw materials such as gold. In general construction activity declined rapidly by 10.5% in 2009. Estimates backed by fragile private sector housing, industrial and commercial property activity suggest a further fall of 1.6% in 2010. The most profitable in the sector over the past year was infrastructure and public non-housing (such as schools) which increased by 10% and 25% Recent data shows slight signs of recovery in the private sector, particularly in new housing. This is backed up by survey evidence which shows a slight increase in housing activity in the final quarter of 2009 construction2.jpg In 2010, private sector housing activity is expected to show further signs of a gradual recovery, but recent signs of increased investor confidence in commercial property may not translate into stronger activity until 2011. This is shown in the graph below. contruction 1.jpg Review Public housing: Weak activity in the private sector has caused output in this sector to have fallen in 2009. However due to the governments drive to help increase affordable housing there are signs of increase in the second half of 2009. Public housing is expected to rise around 6-7% within the next two years. Private housing: Output for private housing was forecasted to drop by nearly 30% last year. Forecasts suggest the recovery period will be gradual. Housing indicators also show recovery in house prices and mortgage approvals. Output in this sector is set to rise to 1% this year pushing it to 10% in 2011 Infrastructure and public non-housing: This sector is continuously growing over the past year this has been due to a number of high- profile projects such as road and rail projects across the UK, the schools building programme and the 2012 Olympics Private commercial and industrial: Over 25% of output has plunged since last year in this sector according to forecasts. Even though there has been interest to investors in this specific sector. Output will likely increase again in 2010, as the commercial sector underperformed industrial, before it returns to normal growth. Repair maintenance: As the current economic situation is slowly recovering, maintenance and private repair are expected to stabilise and eventually grow in 2011. However its different story for public repair and maintenance as its easier to push back spending on this area than make a cut in new high- profile investments Chemicals General including:- Support Services Tobacco Industrials Materials including:- Industrial Transportation Industrial General Industrial Engineering Sector: Chemicals General Sub Sector 1: Chemicals The chemical industry is very crucial to UK manufacturing as it provides the essential compounds for the manufacturing processes and the also the large number of jobs it creates. The industry is equivalent to 1.5%GDP. UKs manufacturing industry total sales of  £62.62bn over the period of 2005 to 2009. However when the economy fell into recession one of the key sectors to be hit by this was manufacturing which the chemical industry is a key supplier of. This sector is highly competitive which has lead to a great deal of mergers and acquisitions. Majority of the major companies in the UK industry are global players which are focused on core ` activities which involve specialised synthesis or final formulation of products. Before the economic recession growth was steady and would have increased over a period of time, however due to the sluggish growth of the UK economy and also globally. Growth will stay reasonably restrained in 2011-2012. Along with the dire state of the governments finance which will eventually lead to tax rises and spending cuts. Therefore this subsector will not be a profitable investment. However export markets in emerging economies are more likely to successful. Sub Sector 2: Health Care Equipment Services The Healthcare industry is broken down into smaller groups such as medical devices, laboratory equipment, system and technology and associated services such as management, training and education. The majority of companies that operate in the UK are foreign-owned mostly American. This sector exports up to  £4bn worth of products and services annually into the global market. Overall this sector is growing extremely fast as there are so many countries working to improve their health care services and facilities. The main reason to the UKs growing presence in the global market is down to the positive relationship between the government, the industry, NHS and private sectors. Along with the well developed health care infrastructure. One of the main themes of the healthcare industry has become cost reduction this is due to the difficult economic times. It is very crucial that the organisations look for new ways to help decrease costs. Therefore this sub sector will not be a profitable investment.

The Dominance of Gothic Architecture in The High Middle Ages Essay

When one sees the Notre Dame de Paris cathedral in person or in pictures they are likely to be awestruck. The twin towers of the western faà §ade rise high into the sky, seemingly in an attempt to scrape heaven. Spiky arches seem to grow out of the sides and claw at the ground. Inside it is cavernous with colored light filtering in through the large, intricate stained glass windows. All of these physical qualities make Notre Dame a prime example of Gothic architecture. It does not stand alone in that distinction. One is also likely to see several hundred examples of this style on varying scales throughout Europe. Because, despite its humble origins, Gothic architecture became the standard for religious buildings in the early 11th century thanks to innovative use of new and old design techniques which resulted in majestic buildings that symbolized the builder’s version of heaven. To understand the appeal of Gothic architecture at the time, it is critical to start in the small suburb of Paris called St. Denis. There, lived a worldly member of the monastery named Abbot Suger. When he took over as Abbot in 1122, his first priority was to â€Å"fatten the monastery’s purse† (Gilgoff 59). He was able to procure more land for the abbey through royal donations and even won favor for one of the region’s large annual trade events. Thus, with the revenues he had collected, â€Å"he felt justified in spending lavishly† (Gilgoff 59). But, in his heart, he was very religious and sought to create a welcoming environment for his parishioners and saw the need to expand the church because â€Å"The narrowness of the place forced the women to run toward the altar upon the heads of men as upon a pavement with much anguish and noisy confusion" (Gilgoff 59... ...ic lighting thanks to intricate stained glass windows. These glorious structures built by some of the humblest of men have offered a vestige of the divine for people in the past and the present and will carry on into the future. â€Æ' Works Cited Bony, Jean. French Gothic Architecture of the Twelfth and Thirteenth Centuries. Los Angeles: University of California Press, 1983. Frankl, Paul. Gothic Architecture. Yale University Press, 1962. Gilgoff, Dan. "GOTHIC GLOW. (Cover story)." U.S. News & World Report 134.23 (2003): 59. Academic Search Complete. EBSCO. Web. 12 Apr. 2010. "Gothic architecture and art." Columbia Electronic Encyclopedia, 6th Edition (2009): 1-3. Academic Search Complete. EBSCO. Web. 12 Apr. 2010. Scott, Robert. The Gothic Enterprise: A Guide to Understanding the Medieval Cathedral. Los Angeles: University of California Press, 2003.

July at the Multiplex

DATE:June 12, 2012 TO:Mr. Plex, Owner, Royal 16 Theater FROM: Team 8 RE:Analysis of Liability for Fraud Based off of your request, we have completed an analysis concerning Royal 16 Theater’s liability for fraud assumed by the customer, Tommy. Please contact us if any additional information is needed. July at the Multiplex Executive Summary What are the standards of selling a service or product so the customer will not get furious? If we tried out best but they are still unsatisfied, what kind of response should we give? In this case â€Å"July at the Multiplex†, the plaintiff, Tommy, was not satisfied with the service that was provided with Royal 16 Theater. He demanded the money that he paid be returned. The theater owner, Mr. Plex refused to do so. Therefore, Tommy was outraged and filed a lawsuit against him. Mr. Plex has two choices to make. The first is to negotiate settlement money or defend the lawsuit. As a group, we will give our best knowledge of business law, statistics, and ethics to help Mr. Plex choose the ideal decision. First of all we will compare the fraud and misrepresentation of business law. Furthermore, we conducted tests on Hypothetical test and a Confidence Interval calculation. Lastly, under the ethics theory of cost-benefit analysis, justice vs. fairness and rights, we decided on the best action that Mr. Plex is supposed to take. July at the Multiplex Purpose: This report is intended to analyze the liability for fraud, the results of the statistical conclusions conducted by the movie theater, and the ethical issues involved with screening commercials before the scheduled movie. I. Analysis for Liability of Fraud The analysis for liability of fraud will explain in detail the offer, acceptance, and possible misrepresentation involved in the contract between Tommy and the Royal 16 Theater. The analysis will also cover the  Cao and Cao v. Nguyen and Pham  case and draw conclusions based on the prima facie case. Assuming that a contract exists between Tommy and Royal 16 Theater this examination of the facts will help determine whether Royal 16 Theater is liable at all for fraud. The offer made to Tommy by the Royal 16 Theater complex was a unilateral contract. That means that only one of the parties involved made a promise and they made that promise for an action. When Tommy bought his ticket for â€Å"The Governator† movie, this solidified the unilateral contract between him and the Royal 16 Theater complex. Tommy took the action of buying the movie ticket at the front kiosk and in exchange for that action the Royal 16 Theater complex promised him the opportunity to go inside, find a seat in the theatre, and watch the movie he paid for. Since all of the requirements were met in the contract this made the contact between Tommy and Royal 16 Theater valid. Read also  Case 302 July in Multiplex Valid contracts are contracts in which all of the legal requirements are met making the contract binding to both parties. The contract between Tommy and Royal 16 Theater is a valid contract because it was legal and both parties met the requirements to make that contract binding. Tommy fulfilled his part of the contract buy purchasing a ticket for the movie â€Å"The Governator† and the movie theater performed their part of the contract by screening the movie. Tommy knowingly knew about the contract he was entering into when he gave the Royal 16 Theater his acceptance. The duty of acceptance falls upon both parties seeking to enter into the contract. In a unilateral contract the party seeking to perform an action for a promise must accept the offer made by the offeror by the terms and in the method requested by the offeror. In this case Tommy was the offeree and the Royal 16 Theater was the offeror. Tommy accepted the offer made by Royal 16 Theater and did so in the method requested; making both the offer and acceptance valid for all terms and purposes in this contract. There are certain limitations on the recovery of damages imposed upon the contract that both Royal 16 Theater and Tommy entered into. The duty to mitigate damages falls onto Tommy, the plaintiff, in this specific case. The duty to mitigate damages is the responsibility of the plaintiff because the plaintiff injured by the breach of the contract cannot recover for losses that could have been easily avoided. In this case Tommy fulfilled his duty to mitigate damages and was not trying to recover for any damages that he could have easily avoided. Instead Tommy wants to file a lawsuit based on misrepresentation. A misrepresentation is a statement made that is not unified with the truth. There are two categories that misrepresentation can fall under: either innocent or fraudulent. When a misrepresentation is innocent it was made not intentionally to deceive the other party. A fraudulent misrepresentation is made with the intent to deceive with knowledge that it is false. Tommy wants to pursue legal action against Royal 16 Theater on the basis that they conducted fraudulent misrepresentation. Prima Facie Case The prima facie case that relates to this case between Tommy and Royal 16 Theater is  Cao and Cao v. Nguyen and Pham. In  Cao and Cao v. Nguyen and Pham  the plaintiffs file a lawsuit against the defendant for fraudulent misrepresentation. They said that when they were attempting to buy a property the defendants claimed that the property was in fact a duplex and that multiple families could live there. The city building and safety department revealed that the property was not a duplex and could not become a duplex due to building and safety issues. The plaintiffs then filed a lawsuit against the defendants for fraudulent misrepresentation. The first trial court dismissed the charges and found that the buyers did not prove the elements of fraudulent misrepresentation. When the plaintiffs appealed the results the second court reversed the decision of the first court and decided that the plaintiffs did prove fraudulent misrepresentation. The property sold by the defendants caused reasonable reliance upon the plaintiffs and there were damages because of the reliance. The property was sold to them on the idea that the property was indeed a duplex when the defendants had prior knowledge that it in fact was not a duplex. The defendants knew that the plaintiff would rely on the representations and conducted business anyway. This case relates perfectly to the situation going on between Tommy and Royal 16 Theater because both cases involve the plaintiffs trying to recover for fraudulent misrepresentation. In our opinion, Royal 16 Theater does have some liability for fraudulent misrepresentation when they tell their customers the movie is supposed to start at 1:00 pm, but they play twenty minutes of previews before. A simple solution to this issue could be resolved by printing disclaimers on the tickets sold to a customer that warns them about the commercials before they enter into the theater. That way when customers come to accept the offer from the theater they are bound by the method of acceptance and they agree to the commercials playing before the movie starts. The simple disclaimer will go a long way and will ensure that there will be no more plaintiffs like Tommy pursuing legal action against the theater again (Mallor, 2009). II. Statistical Analysis According to the commission of Royal 16 Theater, they need to decide which courses of actions are more advisable, considering negotiating a settlement of any lawsuit or defending vigorously. The survey is the key to which course of action will be taken. If the result shows that the percentage of people resenting the ads is 10%, the consortium should consider negotiating the settlement. However, if the percentage is less than 10%, Royal 16 Theater should vigorously defend. We have performed a survey which asked 100 random patrons whether they resent the ads. The result came out to be 6 out of 100 resented the ads. This information itself is not enough. We have to conduct several more tests to have a more solid idea of whom and how many resented the ads. First of all, we have to begin with a Hypothesis test, which means that we conduct a test to understand whether 10% of moviegoers resent the ads or less than 10% of moviegoers resent the ads. Our Ho(null hypothesis) should be p = 10% and our Ha(alternative action/hypothesis) should be p < 10%. In this case, the sample proportion would be 6100 = . 06. The calculation is going to be done using a confidence level of 95%. The confidence interval formula for this analysis is p=p  ±z ? p(1-p)n where p is the sample proportion, z is the level confidence from the 95% confidence level and n would be the sample number. = . 06, z = 1. 96, n = 100. If we plug in the numbers into the formula then we will get p  ±E (E is Error = z ? p(1-p)n). E would be . 04655. Therefore, p= . 06 ± . 04655 = 0. 1066, . 01345. Thus, the confidence interval for this analysis would be . 01345 and 0. 1066 which are 1. 345% and 10. 66% if written in percentage form. This says that this result is not accurate and the actual result may vary between this interval. In this case, since our null hypothesis which is 10% lies between the confidence interval, then the null hypothesis is not to be rejected at the moment. We have to perform further research and calculation. By this result alone, we suggest that Mr. Plex should consider the settlement agreement. Type I and II error Before we start with the consortium, here are the definitions of each error according to the textbook â€Å"Statistic for Business and Economics†: * A type I error is an error if we reject the correct null hypothesis * A type II error is an error if we fail to reject the false null hypothesis. Therefore, the Type I and Type II errors are wrong judgments in the testing of null and alternative hypotheses. With the null hypothesis Ho and the alternative Hypothesis Ha, only one of them is true. The result of hypothesis testing must accept Ho when it is true and reject Ho when Ha is true. If the result of Ho is true, but we reject it then we will make a type I error. On the other hand if Ha is true, but we fail to reject it then we make a type II error. As stated before, the Ho(Null Hypothesis) is when p = 10% and the Ha(Alternative action/Hypothesis) is when p < 10%. To illustrate more, A type I error would happen if 10% of moviegoers resent the ads, and they reject it. It would be a careless decision if they decide not to consider the settlement money, even though they understand that their null hypothesis lies between the Confidence interval. Going deeper with error, a type II error would happen if less than 10% of moviegoers resent the ads, and they fail to reject it. It would be a waste of money if they agree with the settlement when in fact, they do not need to and should defend the lawsuit. Hypothetical Statistical Analysis This time, we have a survey of 300 patrons. The result states that 18 out of 300 resent the ads and this 6% is inadequate for finding the answer. Once again we have to conduct a hypothesis test and confident interval calculation. Just like before, the null hypothesis for this would still be p = 10% and the alternative action would still be p < 10%. If 300 patrons are to be randomly selected instead of 100 patrons, and in the end 18 out of 300 patrons agree with Tommy to resent the ads, then the sample proportion would be 18300 = . 06. The calculation is going to be similar as above. This time it is still going to be calculated using a confidence level of 95%. The confidence interval formula for this analysis is p=p  ±z ? p(1-p)n where p is the sample proportion, z is the level confidence from the 95% confidence level and n would be the sample number. p = . 06, z = 1. 96, n = 300. Then if we plug in the numbers into the formula we will get p  ±E (E is Error = z ? p(1-p)n). E would be . 02687. Therefore, p= . 06 ± . 02687 = 0. 08687, . 03313. Thus, the confidence interval for this analysis would be . 03313 and 0. 08687 which are 3. 3313% and 8. 87% if written in percentage form. This time, the null hypothesis does not lie between the confidence interval. Thus, the null hypothesis has to be rejected and the alternative action accepted. Therefore, we suggest that it would be better not to do the settlement and instead defend the lawsuit. Additional Information There are many other factors which we are not aware of that might affect the survey. The most common one is how the survey is taken. In statistics, there are a few types of conducting surveys and each would lead to different outcome. There are Simple Random Sample, Stratified Random Sample, Cluster Sample, Systematic Sample, etc. Beside these types, the time and place of the survey is also a huge factor. To illustrate, there are more teens in a certain area and more elders in a certain are. What teens think and what elders think are two different things. Thus, the place is also a factor. Furthermore, the time is also a significant factor. Surveys taken on weekdays night and weekend afternoon would result in a different outcome. To conclude, we believe that the survey might not be very accurate survey. III. Ethical Analysis The ethical issues that may be involved in showing twenty minutes of commercials before the screening of the movie can be described under three main categories: the cost-benefit analysis, fairness, and the theory under which we believe Royal 16 Theater should act under. Cost-Benefit Analysis Schmidt (2012) believes cost-benefit analysis is when â€Å"both positive and negative consequences of a proposed action are going to be summarized and then weighed against each other† (â€Å"Cost benefit†, para. 1). Using this analysis will help to understand which is the best route for the Royal 16 Theater to take between their costs and benefits. Costs The â€Å"negatives† or cost of Royal 16 Theater showing twenty minutes of commercials before the movie is customers can of course become upset such as Tommy had. If there are more moviegoers that hear of Tommy’s lawsuit, many could follow in his footsteps because they believe in his position on the matter. Another cost the Royal 16 Theater will have due to commercials is they will need to keep their advertisers and stakeholders pleased. According to investopia. om (2012) stakeholders are â€Å"investors, employees, customers, and supplier that have an interest in an enterprise or project† (â€Å"Definition†, para. 1). It will always cost the theater something to keep each stakeholder happy. By showing commercials, the investors will get their money’s worth for finding advertisers to invest their time with Roya l 16 Theater. Employees will not have any benefits from commercials. Tommy has already showed the discontent a moviegoer may have towards commercials. Finally, suppliers can be content with commercials because customers can see their product and need to buy it during or after the movie. However, all this shows a large cost of trying to keep all of these stakeholders pleased. Keeping one stakeholder happy can make another unhappy. Benefits One benefit of showing twenty minute commercials is gaining revenue from commercials. When a customer sees a commercial with yummy chocolate bars or dancing popcorn they are going to be more enticed to go run and get some snacks before the movie starts. The Royal 16 Theater gains much revenue from moviegoers who gain this feeling during commercials. Another benefit from showing commercials is actually towards Royal 16 Theater’s customers. By showing commercials, a moviegoer can show up late and not miss the movie. This is usually what customers will do if they do not care for the commercials or just decide on a last-minute movie trip. Now we can decide on the cost vs. benefit choice for the Royal 16 Theater. Cost-Benefit Analysis Conclusion After seeing both costs and benefits Royal 16 Theater should deal with the cost entailed with dealing with stakeholders and Tommy. We believe this due to the fact that the Royal 16 Theater has too much invested with their stakeholders to stop it all just for one lawsuit. By taking the cost choice Royal 16 Theater will keep its reputation with customers and keep a relationship with the stakeholders. Having the benefits of customer satisfaction would be great; however losing the stakeholders is too much of a risk for the theatre to take. We have discussed the cost-benefit analysis, now we can understand if moviegoers are being treated fairly. Customers Treated Fairly In this ethical issue it is pondered if the customers are truly being treated fairly. This is a yes or no issue. It can be argued that the customers are being treated unfairly because they are not seeing a true representation of an advertisement or time for a movie. However, it can be argued that moviegoers are being treated equally because the Royal 16 Theater does not have an actual contract stating that a movie will start at this time no matter what happens. Neither party has an agreement saying any compensation will be given if the contract does not follow through. Also, movies have always been similar to this routine of commercials and many customers understand that. However, based on ethics the moviegoers are not being treated fairly. It is mainly due to the fact that the Royal Theater states a time slot for a movie to start, not when commercials for the movie will start. It is just good business practice to keep moviegoers happy by not deceiving them. According to Michael Hackworth (1999), â€Å"ethical leadership actually saves money; consider it the role of quality in business† (â€Å"Only the Ehical†, para. 1). We have just discussed if the moviegoers are being treated fairly, now we will discuss the ethical theory which the Royal 16 Theater should act under. Ethical Theory The ethical theory Royal 16 Theater should act under is the stakeholder/utilitarian theory. We believe this theory is the best because it lends itself to the golden rule of â€Å"the greatest good to the greatest number†. We believe this is the best course of action for the Royal 16 Theater because the theater has to act out of its own interest to keep its stakeholders content with performance. Ethically, this decision makes the most sense because by going on with Tommy’s lawsuit it will make the problem go away quicker. By fixing this issue with Tommy, the Royal Theater will make their stakeholders pleased and keep pursing revenue with their other fellow loyal customers. Conclusion In conclusion, we believe Mr. Plex should fight the case against Tommy with the consortium. We consider our evidence of the analysis of liability for fraud, statistical analysis, and ethical analysis enough to show Mr. Plex he will be successful in the case. Reference List Anderson, Sweeney, and Williams T. â€Å"Chapter Nine- Hypothesis Tests†, Statistics for Business and Economics. 10th ed. Thomas South-Western, 2009. Cao and Cao v.Nguyen and Pham, 258 Nev. 1027; 607 N. W. 2d 528; 2000 Neb. LEXIS56 Hackworth, M. (1999). Only the Ethical Survive. 10. Retrieved Jun 8, 2012 from http://www. scu. edu/ethics/publications/iie/v10n2/ethical-surv. html Mallor. (2009). Business law: The ethical, global, and e-commerce environment. (14th ed. ). United States: McGraw-Hill/Irwin. Schmidt, M. (2012). Cost Benefit Analysis (CBA). Retrieved June 9, 2012 from http://www. solutionmatrix. com/cost-benefit-analysis. html Stakholder. (2012). Retrieved June 8, 2012 from http://www. investopedia. com/terms/s/stakeholder. asp#axzz1xLL3G6UG

Embryo Adoption A Only Of A Kind Thing - 1613 Words

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