Accounts and Finance

Quantitative Investment Appraisal

Average rate of return

Average rate of return is a percentage that shows the amount of profit someone gets back from an investment. This takes into account the profit and not the time.

                           [Net return (profit) per annum / Capital Outlay (cost)] x 100 = ARR

Payback Period

The Payback Period is the amount of time a firm would take to recover the investment made. This takes into account the time and not the profit.

                           [Amount required / Net Cash Flow in year] x 12 = Payback Period

In the case UWP

There is not enough information to make an Average Rate of Return (ARR) or a Payback Period as the case does not explain how much profit would the hospital or the University generate. Maybe a reason why they do not tell us that information is because the intention of those projects are not financial but to be healthy to the community. Also we do not have a net cash flow forecast for each project so the Payback Period is not available for students. In case the IBO gives a cash flow, we just need to analyse the amount of profits the projects are going to be generating to put what we need in a formula. 

In the case of Kos, we know how much profits the options available for him are going to be generating, what we do not know is how much does he have to invest so neither the ARR nor the Payback Period can be made. 

Recruitment and selection

Recruitment and selection is present in a section of the case.

• If the main objection of the local population was the concern that most of the doctors would be male, the UWP, he argued, should do everything it could to recruit female doctors, even if only for the short term. So even though different factors are being taken into account by the managers of the project, most of the recruitment must be specialized on the preferences of the loykese, this is because the project is mainly for them, if the loykese approve the project then the mission that was established by the leader will be accomplished, the acceptance of the Olive Hats will be successful. Depending on whether a hospital or a university will be constructed different factors would need to be taken into account. The university will need to employ teachers that will be part of the staff, loykese don’t seem to have a problem with the recruitment of males or females, in the other hand, the staff of the hospital will need to be mainly people from loykese, this is because of the idea that they have about foreign doctors treating people from the country, especially male people.

Motivational theories

Maslow

Maslow’s theory consist of two parts: the classification of needs and how these classes are related to each other. The classes of needs are:

• physiological needs (food, drink, rest and activity)
• safety needs (protection from dangerous situations or threats)
• love and belonging (receiving and giving love, affection, acceptance, and trust)
• esteem needs (gaining the esteem and respect of the others)
• self-actualisation (realising your full potential)

The UWP Mission is not achieving the class of esteem needs for their troops because there is opposition to the UWP presence grew as did violence against the troops. Moreover, “the Olive Hats” in Loyka started to resent being there and motivation was beginning to deteriorate. They felt unappreciated by the local population, whom they believed they were assisting by maintaining order, peace and security. (27-30)

Herzberg

Herzberg’s theory shows two factors that influences in the causes of feelings of satisfaction or dissatisfaction at work. This factors are motivators or hygiene factors.

The motivators give workers job satisfaction, such as recognition for their effort. The hygiene factors can lead to workers being dissatisfied, such as pay and conditions, improving these factors should remove dissatisfaction. Because Herzberg’s ideas are often linked with job enrichment, this theory is applied with the creation of a new hospital or a new university campus that would remotivate the The Olive Hats by providing a change of routine, by giving them a sense of achievement, and by buildingpositive relationships with the local population. (47-49)

Taylor

Taylor’s Scientific Management says that money is what motivated people at work. Taylor felt that workers should receive a fair day’s pay for a fair day’s work, and pay should be linked to output through piece rates. Although that this may be a good motivator for the soldiers, the salaries aren’t set by the colonel, they are set by the UWP itself, so financial rewards are not an option that could be taken to motivate workers.

Glossary

Na (Later)

Categories

• Business Organization and Environment
• Human Resources
• Accounts and Finance
• Marketing
• Operations Management

References

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