ABC Corporation Case Study

ABC Corporation Case Study
ABC Corporation Case Study

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ABC Corporation Case Study

Complete a case study of ABC Corporation (your instructor will assign the specific company for the case study at the beginning of Module/Week 3) in the case section of the text (e.g., Case Number 1).

A formal, in-depth case study analysis requires you to utilize the entire strategic management process. Assume your group is a consulting team asked by the ABC Corporation to analyze its external/internal environment and make strategic recommendations. You must include exhibits to support your analysis and recommendations.

The case study must include these components:

  • A total of 10–12 pages of text plus the exhibits
  • Cover page (must include the company name, your group name, a list of the active team members, the date of submission, and a references page; the document must follow current APA guidelines.)
  • Matrices, which must be exhibits/attachments in the appendix and not part of the body of the analysis (The Strategy Club has excellent templates/examples for exhibits and matrices: http://strategyclub.com/free-student-template/)

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Case study deliverables (text must follow this order with current APA-level headings for each component):

  1. Executive Summary
  2. Existing mission, objectives, and strategies
  3. A new mission statement (include the number of the component in parenthesis before addressing that component)
    Great mission statements address these 9 components:
  4. Customers: Who are the firm’s customers?
  5. Products or services: What are the firm’s major products or services?
  6. Markets: Geographically, where does the firm compete?
  7. Technology: Is the firm technologically current?
  8. Concern for survival, growth, and profitability: Is the firm committed to growth and financial soundness?
  9. Philosophy: What are the basic beliefs, values, aspirations, and ethical priorities of the firm?
  10. Self-concept: What is the firm’s distinctive competence or major competitive advantage?
  11. Concern for public image: Is the firm responsive to social, community, and environmental concerns?
  12. Concern for employees: Are employees a valuable asset of the firm?
  13. Analysis of the firm’s existing business model

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  • SWOT Analysis (comes from researching the firm, industry, and competitors)
    It is important to know the difference between causes and effects in the SWOT analysis. Causes are important, not effects. Once the SWOT Analysis is created, each group needs to construct the SWOT Bivariate Strategy Matrix.
    Deliverables for this section include:
    • SWOT Analysis
    • Internal Factor Evaluation (IFE) Matrix
    • External Factor Evaluation (EFE) Matrix
    • SWOT Bivariate Strategy Matrix
  • BCG Matrix (follow the Strategy Club’s template, not the textbook’s format)
  • Competitive forces, Competitive Profile Matrix (CPM), and competitor’s ratios
    Deliverables for this section include:
    • CPM and analysis
    • Competitor’s ratios and analyis
  • Current and historical Financial Statements (Income Statement (I/S), Balance Sheet (B/S) and Statement of Cash Flows) from the 3 most current years for the firm
    The financial statements must include changes (deltas) between years.

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  • Ratios from the most current and available 3 years with deltas and analysis
  • Alternative strategies (giving advantages and alternatives for each)
  • Pro-Forma Financial Statements (I/S, B/S and Statement of Cash Flows) with deltas out 3 years and analysis
    Each year must have 2 columns: 1 with your strategy and 1 without your strategy.
    • Include Pro-Forma ratios for the first year out with deltas contrasting from the most current year’s ratios.
  • Net Present Value analysis of proposed strategy’s new cash flow and EPS/EBIT analysis
    NOTE: To construct the first cash flow (cf1) at the very minimum, the new revenue from your strategy(s) must be discounted back to the present value by calculating EBIT and that figure will be your cfn for each year. cf0 (initial cost of your strategy), cf1 (discounted cash flow first year), r (opportunity cost of capital, the rate of the next best alternative use of cash/debt/equity resources).
  • Specific recommended strategy and long term objectives
    Explain why you chose the strategy, and discuss how much the strategy will cost to implement and how much new revenue your strategy will create. Include your action timetable agenda for accomplishing your strategy.
  • Proposed new business model

Have your group leader place the results of the case study analysis in a single document and post it to the Group Case Study 1 forum on your Group Discussion Board Forum.

Submit this assignment by 11:59 pm (ET) on Friday of Module/Week 4.

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Inflation and Interest Rates

Inflation and Interest Rates
Inflation and Interest Rates

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Inflation and Interest Rates

Overview

Solve three problems addressing inflation and interest rates affecting the financial environment, including the real risk-free rate, expected interest rate, detailed risk premium, and ratio analysis.

By successfully completing this assessment, you will demonstrate your proficiency in the following course competencies and assessment criteria:

  • Competency 1: Maximize shareholder wealth.
    • Compute real risk-free rate of return based on data presented.
    • Determine yield on 2-year and 3-year Treasury securities.
  • Competency 2: Evaluate the financial health of the firm
    • Assess the default risk of a corporate bond.

Context

There are different determinants of market interest rates. Try to answer such questions as, “What determines the shape of the yield curve?” and “How is the yield curve used to estimate future interest rates?,” which are important considerations for financial managers.

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Resources

The following optional resources are provided to support you in completing the assessment or to provide a helpful context.

  • Brigham, E. F., & Houston, J. F. (2016). Fundamentals of financial management (14th ed.). Boston, MA: Cengage.

Assessment Instructions

For this assessment, complete Problems 1–3 on inflation and interest rates affecting financial environment. You may solve the problems algebraically, or you may use a financial calculator or an Excel spreadsheet. In addition to your solution to each computational problem, you must show the supporting work leading to your solution to receive credit for your answer. Note the following:

  • You may need an HP 10B II business calculator.
  • You may use Word or Excel, but you will find Excel to be most helpful for creating spreadsheets.
  • If you choose to solve the problems algebraically, be sure to show your computations.
  • If you use a financial calculator, show your input values.
  • If you use an Excel spreadsheet, show your input values and formulas.

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Understanding and Managing People

Understanding and Managing People
Understanding and Managing People

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Understanding and Managing People

Understanding and managing people can be a daunting task. The process involves numerous concerns brought about by the complexity of handling multiple individuals with the balance of following strict regulations. This paper breaks down a section of such complexity by addressing a number of contemporary issues facing organisational behaviour. In addition, the paper seeks to point out the impact of such issues on the human resource practices within the company.

Contemporary issues facing the field of organisational behaviour

Given the breadth of content and research in the field of organisational behaviour, many of the issues and topics are widely researched. However, the field is rather flex, with issues changing every now and then. As such despite the numerous research in the field, there are always new and incoming issues that require attention and research. This section discusses a number of contemporary issues facing the field of organisational behaviour as outlined below.

Diversity in the workplace

For the longest time, workplace diversity has been an issue under the radar of a lot of companies and their management. Over the years, the management and definition of diversity in the workplace have titled and shifted with changing global concerns. Workplace diversity refers to the inclusion of the various characteristics, similarities, and differences between the members of staff in a given organisation. Such differences include race, age, cultural background, handicaps, education levels, religion, and sexual orientation among others (Saxena, 2014, pp. 77 – 78).

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While the issue of diversity has its impact on organisational behaviour, it is not among the most crucial. However, mismanagement of diversity can have potentially disastrous outcomes (Davidson & Burke, 2016, pp. 254 – 257). To counter such, modern management practice calls for inclusion to cater for such differences. While the concept is theoretically simple, the implementation calls for much more focus and can be quite resource-incentive as discussed in the next section.

A recent contentious issue in organizational behaviour tied to diversity and inclusion is the inclusion of women in management. In the recent years, research has indicated that firms have had a direct increase in various metrics of business success from improved gender equality, inclusion, and diversity within the company (Davidson & Burke, 2016, pp. 29 – 30). Such inclusion fosters better relationships and promotion of women as integral parts of the organization rather than unwelcome players.

Positivity

Positivity as an independent field of psychological knowledge has widespread research and coverage. However, the case is not the same for its impact in the workplace, and on the organisational behaviour. New studies indicate the impact of positivity in an individual to an increase in their work effort and ethic (Warr, Bindl, Parker, & Inceoglu, 2013). In addition, such positivity has a high potential to spread across the firm and create a phenomenon known as positive organisational behaviour.

With an increase in positive organisational behaviour, there is an increase in firm qualities such as hope, optimism, resilience, the development of psychological capital, and self-efficiency (Luthans & Youssef, 2007, pp. 327- 336). Luthans and Youssef (2007, pp. 339 – 340) also indicate the presence of strong links between the positivity of the individual, better firm performance, and positive organisational behaviour.

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Reciprocity and Social Exchange Theory

As with the other terms, the history of reciprocity and theories of social exchange has been an issue under research for a long time. However, only recently did scholars gain interest in its relationship with organisational behaviour. The concept of reciprocity at the workplace may result either from transactional needs, folk belief or as a moral and cultural norm. In an organisational setting, transactional reciprocity is most common.

In such a setting, most of the interactions are interdependent on the exchange of various resources. Such engagements form the basis of social exchange relationships in the workplace. Here, reciprocity begins upon signing a work contract, and negotiations kick in almost immediately, where the exchange is between the hours of work and a form of agreed compensation, that is usually monetary (Cropanzano & Mitchell, 2015).

The concepts of reciprocity and social exchange influence organisational behaviour in a number of ways. Among the most common is the fostering of cordial interactions between employees (Cropanzano & Mitchell, 2015). A second is the enhancement of personal, behavioural and team commitment to various tasks and the company as a whole (Shiu, Jiang, & Zaefarian, 2014), and a third is the increase of equity and inclusion of historically marginalized groups within the organisation (Singh & Vinnicombe, 2004).

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Trade Unions

The impact of trade unions and their influence on work productivity is not as widespread a topic as their relationship with worker remuneration. However, trade unions have an impact on employment, career growth and the behaviour of firms, employees, and employers (Blanchflower, Millward, & Oswald, 1991; Bryson, 2005). Unionisation has a largely positive effect on the work relationships between employees, and between employees and the employer. The change in behaviour emanates from the changes in pay levels, employment levels, and security of tenure (Millward, Forth, & Bryson, 2001).

The influence of these issues on Human Resource practices

Diversity in the workplace

Inclusion and improving on increased diversity in the workplace is a key goal for the human resources department in a firm. Therefore, the increase in scholarly discourse and willingness of firms to increase inclusion and foster equality is a big boost to HR practices, especially the inclusion of women in managerial and decision-making positions. 

Positivity

The concept of individualistic positivity, as well as positive organisational behaviour, increase the wellness of the individual as well as overall increase in work output and efficiency of the firm. According to the CIPD, this increases the ability to meet work targets and set quotas of work (CIPD, 2015). Therefore, the issue of positivity helps further human resource practices within the organisation.

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Reciprocity and Social Exchange Theory

Successful implementation of reciprocity and SET within the workplace is vital towards better overall relations. SET calls for better relationships between colleagues, and between workers and employers. This is in line with the goals of HRM practices. Therefore, reciprocity and social exchange within the organisation help to improve HR practices.

Trade Unions

In spite of the common goals of both human resource practice and trade unions at improving welfare and providing better working conditions, the two sometimes find fault with each other. For example, while unionisation uses a collectivist approach, HRM prefers an individualistic approach to managing situations. In addition, human resource models are based on high trust levels, while adversarial relations pushed by unionisation call for decreased trust.

Conclusion

Improving diversity in the workplace, enhancing a sense of positivity, implementing the concept of reciprocity and social exchange theory, and unionisation stand out as examples of contemporary issues facing the organisation and with an impact on the organisational behaviour. Each has its distinctive influence on organisational behaviour, as well as its effect on the human resource practices, where some foster such operations, and others provide challenges to the HR department. However, they all serve to increase the understanding and management of people within an organisation.

References

Blanchflower, D. G., Millward, N., & Oswald, A. J. (1991). Unionism and employee behaviour. The Economic Journal, 815 – 834.

Bryson, A. (2005, September 1). Union effects on employee relations in Britain. Journal of Human Relations, 58(9), 1111 – 1139. doi:10.1177/0018726705058912

CIPD. (2015). Quotas and targets: How do they affect diversity progress? London: CIPD.

Cropanzano, R., & Mitchell, M. S. (2015). Social Exchange Theory: An Interdisciplinary Review. Journal of Management, 31(6), 874 – 900. doi:10.1177/0149206305279602

Davidson, M. J., & Burke, R. J. (2016). Women in Management Worldwide: Progress and Prospects (2nd ed.). New York: Routledge Publishing.

Luthans, F., & Youssef, C. M. (2007). Emerging Positive Organizational Behavior. Journal of Management, 33(3), 321 – 349. doi:10.1177/0149206307300814

Millward, N., Forth, J., & Bryson, A. (2001). Who calls the tune at work? The impact of trade unions on jobs and pay. Layerthorpe: Joseph Rowntree Foundation.

Saxena, A. (2014). Workforce Diversity: A Key to Improve Productivity. Procedia Economics and Finance, 11(1), 76 – 85. doi:10.1016/S2212-5671(14)00178-6

Shiu, E., Jiang, Z., & Zaefarian, G. (2014). Antecedents of behavioural commitment in inter-organizational relationships: a field study of the UK construction industry. Journal of Construction Management and Economics, 32(9), 888 – 903. doi:10.1080/01446193.2014.915335

Singh, V., & Vinnicombe, S. (2004). Why So Few Women Directors in Top UK Boardrooms? Evidence and Theoretical Explanations. Corporate Governance: An international review (pp. 479 – 488). Blackwell Publishers.

Warr, P., Bindl, U. K., Parker, S. K., & Inceoglu, I. (2013). Four-Quadrant Investigation of Job-related Affects and Behaviours. European Journal of Work and Organizational Psychology, 23(3), 342 – 363. doi:10.1080/1359432X.2012.744449

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Tax Credits on 1040 to Reduce Tax Liability

Tax Credits on 1040 to Reduce Tax Liability
Tax Credits on 1040 to Reduce Tax Liability

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Tax Credits on 1040 to Reduce Tax Liability

Assessment 5

Overview 

Determine eligibility for available tax credits and complete an official worksheet for each credit, to demonstrate eligibility.Note: Completing a tax form requires specific steps that need to be executed in a sequence. The assessments in this course are presented in sequence and must be completed in order. Incorrect entries in previous assessments will result in incorrect entries in future assessments. Do not complete Assessment 5 until you have submitted and received faculty feedback for Assessment 4.

Tax credits work to lower taxpayer liability rather than provide refund incentives. A tax credit is subtracted directly from the taxpayer’s tax obligation, providing equal relief to all taxpayers. This can make the credit more valuable than a deduction taken during the filing process.

Tax Credits on 1040 to Reduce Tax Liability

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By successfully completing this assessment, you will demonstrate your proficiency in the following course competencies and assessment criteria:

• Competency 1: Analyze the background of the federal income tax system. 
o Interpret official rules and instructions to record correct entries on tax forms.• Competency 2: Analyze the basics of individual income tax return preparation.o Analyze tax rules to complete tax credit worksheets to prove eligibility.o Apply laws and rules to correctly enter data on Schedule A.o Apply rules and tax tables to record the correct tax owed on the 1040.o Correctly calculate the amount of a refund on the 1040.

Context

“When a new source of taxation is found it never means, in practice, that the old source is abandoned. It merely means that the politicians have two ways of milking the taxpayer where they had one before.” — Henry Louis Mencken, one of the most influential American writers of the early twentieth century.

Politicians have a penchant for finding ways for doing one of two things:

• Enacting tax credits for the benefit of individual taxpayers as a means of putting more money in taxpayer pockets to stimulate the economy.• Enacting tax credit legislation for the benefit of specific groups or industries in the business sector.
The hope is that businesses will take the additional monies and reinvest them in the business for the benefit of the economy.

There are credits for foreign taxes paid, child and dependent care expenses, and for the elderly or disabled; credits for education, retirement savings contributions, and residential energy; and child tax credit, adoption, retirement savings, and earned income credits.

Tax Credits on 1040 to Reduce Tax Liability

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Reference

Quotegarden.com. (n.d.). Quotations about taxes. Retrieved from http://www.quotegarden.com/taxes.html

Question to Consider

To deepen your understanding, you are encouraged to consider the questions below and discuss them with a fellow learner, a work associate, an interested friend, or a member of the business community.

• How do tax credits directly benefit an individual taxpayer?• Which is more advantageous: a deduction or a tax credit?• What can you do if you have already filed your tax return and you discover you are eligible for a tax credit?

Resources

Required Resources

The following resources are required to complete the assessment.
Access the following resources by clicking the links provided. Please note that URLs change frequently. Permissions for the following links have been either granted or deemed appropriate

IRS.gov is the homepage for the federal IRS Web site. Use the tabs at the top of the page to navigate the site. The Interactive Tax Assistant and Tax Trails are tools that walk you through a series of questions to find answers to tax questions. Download the appropriate forms and publications from the IRS Web site to complete this assessment.

• IRS.gov. (n.d.). Retrieved from http://www.irs.gov/• IRS. (n.d.). Interactive tax assistant. Retrieved from http://www.irs.gov/uac/Interactive-Tax-Assistant-(ITA)-1• IRS. (n.d.). Tax trails. Retrieved from www.irs.gov/Individuals/Tax-Trails%2d%2d%2dMain-Menu
The following optional resources are provided to support you in completing the assessment or to provide a helpful context.
Click the links provided below to view the following multimedia pieces:

Tax Credits on 1040 to Reduce Tax Liability

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FORM 1040: TAX CREDITS

This final section of Form 1040 incorporates a variety of tax credits designed to reduce tax liability for certain taxpayer groups. The unique aspect of these credits is that they are subtracted directly from the total federal tax liability of the taxpayer(s). The affect of these credits can reduce or eliminate the taxpayer’s financial obligation.If a taxpayer is eligible for any/all of the credits, additional tax forms must be completed and filed with the Form 1040.

The primary forms are Form 1116 ( Foreign Tax Credit), Form 2441 (Credit for Child and Dependent Care Expenses), Form 8863 (Education Credits), Form 8880 (Credit for Retirement Savings Contributions, Form 8839 (Qualified Adoption Expenses), and Schedule EIC (Earned Income Credit).Licensed under a Creative Commons Attribution 3.0 License.

Library Resources

• J. K. Lasser Institute. (2015). Your income tax 2015: For preparing your 2014 tax return. Hoboken, NJ: Wiley.

• J. K. Lasser Institute. (2014). Your income tax 2014: For preparing your 2013 tax return. Hoboken, NJ: Wiley.

• Galletta, P. Z. (2014). Taking credit for your work: A roundup of federal tax credits available to individuals. The CPA Journal, 84(12), 17–23.

• Crawford, C., & Crawford, C. (2014). 2014 individual tax landscape. The CPA Journal, 84(12), 6–8.

• Baldwin, D. R., Carlton, L. H., Fava, K. L., Haim, D, Horn, J., Morrow, S., . . . Zidik, D. J., Jr. (2014). Individual taxation: Digest of recent developments: Part II. The Tax Adviser, 45(4), 274–280.

Internet Resources

Access the following resources by clicking the links provided. Please note that URLs change frequently. Permissions for the following links have been either granted or deemed appropriate for educational use at the time of course publication.
lynda.com. (n.d.). Income tax fundamentals: Accounting tutorials. Retrieved from http://www.lynda.com/Business-Accounting-tutorials/Income-Tax-Fundamentals/188210-2.html

• IRS. (n.d.). IRS videos. https://www.youtube.com/user/irsvideos.

o The IRS has a channel on YouTube devoted to income tax information in a video format. There are numerous videos available to help you with the course assessments. Videos are available with closed captions and in ASL and multilingual versions. You can search this channel by topic.

Cruz, A., Deschamps, M., Niswander, F., Prendergast, D., Schisler, D., & Trone, J. (2016). Fundamentals of taxation 2016 [with taxation software] (9th ed.). New York, NY: McGraw-Hill.o Chapter 9, “Tax Credits (Lines 47 through 54 and Line 64A, Form 1040).”

Tax Credits on 1040 to Reduce Tax Liability

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Assessment Instructions

Note: The assessments in this course are presented in sequence and must be completed in order. In Assessments 2–5, you will work step-by-step toward completing a 1040 tax return and all the necessary related forms, based on a provided scenario. Do not complete Assessment 5 until you have submitted and received faculty feedback for Assessment 4.
This assessment will require significant research and critical thinking to complete each required form successfully. An incorrect entry on one form will create incorrect entries in other forms.

There are two parts to this assessment. Be sure to complete both parts and submit the necessary materials.• Part 1: Determine eligible tax credits by completing official worksheets.• Part 2: Complete Schedule A and the 1040.

Preparation

• Read the information provided in the scenario below.• Download the following tax forms and instructions from IRS.gov, linked in the Resources under the Required Resources heading:o 1040.o Schedule A.o 2441.o 3800.o 5884.o 6251.o 8826.
Part 1Use the information in the scenario, on IRS.gov, and in the interactive IRS tools to interpret official rules and instructions to determine available tax credits.

Tax Credits on 1040 to Reduce Tax Liability

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• Complete an official worksheet for each tax credit to demonstrate eligibility.• Submit each tax credit worksheet.
Part 2Use the information in the scenario, on IRS.gov, and in the interactive IRS tools to Interpret official rules and instructions to complete the following:

• Complete Schedule A.• Enter data from Schedule A into the 1040.• Apply the rules and tax tables to calculate the tax owed and the amount of any refund.• Submit Schedule A and the completed 1040.
Scenario—Use form for 2016

• Jacob and Taylor Weaver, ages 45 and 42 respectively, are married and are filing jointly in 2016.o They have three children, Ashley, age 9; Patrick, age 6; and John, age 18.o Social Security numbers are: Jacob, 222-33-4444; Taylor, 555-66-7777; Ashley, 888-99-1234; Patrick, 789-56-4321; John, 123-45-6789.
Jacob is self-employed as a contractor.o 2016 net income: $133,000.o Clients owe him a total of $53,000 for work completed in 2016.o 2016 estimated tax payments: $25,000.

• Taylor works part-time as a paralegal.o She earned $26,000 in 2016.o Federal income withholding: $2,350.• Weavers $350 paid with their 2015 state tax return.• Jacob and Taylor bought their house in 2016.o Home mortgage interest: $7,246.o Property tax: $2,230.

• Charities: $4,500.• $435 to rent a moving truck.• $8,000 to put new siding on the house.• $11,600 for child care expenses ($5,800 for each child).o It was paid to Lil Tigers Daycare, 1115 S. Garrison St., Muncie, IN 47305 (EIN 98-7654321).• Taylor is a part-time student at Ball State University in Muncie.

o She received a 1098-T indicating tuition and fees for 2016 in the amount of $6,011.• Health insurance for the family, through Taylor’s job, cost $6000 for all 12 months of 2016.o They paid deductibles and co-payments of $550.• Dental insurance for the family was $1200.• Car insurance for the family car was $600.

Tax Credits on 1040 to Reduce Tax Liability

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‘Racist or not?’: Heart of Darkness a study of Joseph Conrad

Heart of Darkness
Heart of Darkness

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‘Racist or not?’: Heart of Darkness a study of Joseph Conrad.

Joseph Conrad occupies an important position in English literature. He is credited as being “one of the greatest novelists in the English language” which is no small feat for any writer but a particularly striking one for someone who learned English in his adult years. Conrad was born Jozef Teador Konrad Nalecz Korzeniowski in Russian-occupied Ukraine to Polish parents in the year 1857. He led an active life with roughly twenty years of naval adventures. In 1878, he arrived in England and began to learn the native language. He was twenty-one.

Conrad’s literary career was as adventurous as his life. He produced fourteen novels and eight volumes of stories. His impact on literature-in-English was nothing short of revolutionary and his influence is particularly apparent in American fiction. In the immediate post-World War I landscape, critical giants (including FR Leavis and Thomas C. Moore) took an active interest in analysing Conrad’s works. In the 1930s renewed American curiosity about the author led to many well-written biographical records being published.

Conrad’s fiction revolves around his own experiences. Fascinated by Africa as a young boy, he would grow up to work for an imperial company. This would take him on many journeys to “the dark continent” and leave him with a disillusionment of colonisation.

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After prompting celebratory reverence for more than half a century, Conrad’s fiction is now facing sharp criticism. A lot of this revolves around race. The world looks different in the twenty-first (and twentieth) century than it did in the nineteenth. Writers from once-colonised nations have integrated themselves into the academic and artistic world of English literature, and have found Conrad’s depictions of Africans (and others) to be intellectually lazy, filled with Orientalist stereotyping and employing a rhetoric that justifies colonisation.

Forefront amongst these are: African author and critic Chinua Achebe and Palestinian-born intellectual Edward Said. The former has famously called Joseph Conrad “a thoroughgoing racist”.

So, was Joseph Conrad – story-teller extraordinaire and firm part of the English canon – nothing more than a racist, included in the company of great English writers simply because he was lucky enough to be born a white man at an age where you could recycle stereotypical descriptions of Africans to no-end and still be given credit? Or is he simply a victim of literary-theory, that oppressive force that many celebrated critics feel has taken over English classrooms and turned them into battlegrounds of political correctness?

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To decide, many point – as this essay will – to Conrad’s famous novella Heart of Darkness.

Published in 1899, the premise of the short story is simple: On the deck of a ship docked on River Thames, a man named Marlow recounts his previous adventure as the captain of a river-boat that travelled up the River Congo. Marlow was the employee of an imperial company specialising in ivory trade in Africa. His mission was to rescue Kurtz, the evasive station captain stranded somewhere in the depths of Congo.

Conrad was different from his contemporaries in that he offers an apparently scathing critique of imperial domination right from the start of the novella. Unlike many, he does not posit colonial rule as of benefit to the natives and highlights white cruelty at (almost) every turn.

Marlow points out that his predecessor Fresleven once beat the chief of an African tribe with a stick over a dispute involving some hens. When a fire breaks out at the company’s central station a black man is punished; he is beaten bloody at the mere suspicion of playing a part in the destruction and afforded no trial.

A line of slaves joined with chains hanging from their necks is paraded around the station, and Marlow’s companion is eager to “kill somebody” as punishment for the black men (who are forced to carry him everywhere) deserting them. Even Kurtz – who is a part of the company’s newly recruited “gang of virtue” – scribbles “Exterminate all the brutes!” in a moment of carelessness as a jarring postscript on his (ironically titled) pamphlet for the ‘Suppression of Savage Customs’.

If the white people are cruel – the black people are oppressed, and Conrad makes sure to show this repeatedly. The hungry slaves deserted after they had fulfilled their usefulness are “black shadows of disease and starvation.” Black heads on stakes decorate Kurtz’s house, a reminder that even the best view natives as easily disposable.

On the river-boat, Marlow’s white crew members throw a slab of smelly hippo meat overboard, their olfactory sensibilities overriding a major concern: what will the black-crew eat? This is of little consequence to the Europeans and (strikingly) Marlow recounts this instance with a good deal of sarcasm, commenting that the useless brass wire paid in place of the meat “was paid with a regularity worth of a large and honourable trading company.”

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This is to Conrad’s credit. He does not seem to fully subscribe to the mission civilisatrice (‘civilising mission’) that maintained that the white man had a duty to go forth and westernise all non-Europeans for their own benefit. This was a powerful rhetorical position in the nineteenth century, and this novella offers contemptuous commentary in this regard: Marlow encounters a man paid by the company for the upkeep of roads and points out that neither roads nor upkeep was to be seen unless the body of a black man lying in the middle of the path with a bullet hole through his head “could be considered a permanent improvement.”

When he first arrives in Congo, Marlow encounters the senseless digging of a hole which seems to have no purpose other than a “philanthropic desire” to give the natives work. When Marlow’s aunt elaborates on the goodness of colonisers spreading culture and Christianity to savages, he replies: “The Company is run for profit.”

These – and other – instances show that Conrad was ahead of his time, at least to a certain extent.

Shouldn’t this be enough to exonerate him?

Achebe doesn’t think so.

In 1975, he delivered a lecture titled ‘An Image of Africa: Racism in Conrad’s Heart of Darkness’. In it, he outlines why he indicts Joseph Conrad.

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For one thing, Conrad sees Africa as little more than a foil to Europe. If Europe is cultured, civilized and advanced, then Africa is (all words used to describe Congo in Heart of Darkness:)savage, barbaric and primitive. A place “where man’s vaunted intelligence and refinement are finally mocked by triumphant bestiality,” Achebe writes. This is problematic because it sees Africa only in terms of not-being-Europe, and not as a real place with its own spatiotemporal context.

This means that the author is so blinded by his prejudices that he deliberately misses out on achievements by Africans. As Achebe points out, the tribe of Fang people lived near were the novella is set. European travellers inspired by their bronze-art would introduce cubism to 20th century Britain around the time of Conrad’s writing. But you wouldn’t guess from that from reading this novella. Conrad spares no adjective in describing how hopelessly childlike, incapable of progress and primitive Africans are.

That they could create something worthwhile is unimaginable. Essentially what Achebe points out is that Conrad’s works are ‘Orientalist’ – a tricky word that basically means that European domination in Africa, Indochina and the Near East was accompanied by representations that insisted that black and brown people were incapable of progress and so justified colonial rule as being in their own best interests.

Secondly, African characters in the novel are rarely allowed to speak lucidly. Their language is brushed aside as “grunting phrase[s]”, a “clamour” and “an incomprehensible frenzy”. The narrator has a disturbing habit of comparing them to animals. There is a black river-boat boilerman who struggles to understand the work his white masters require of him, and Marlow comments that watching him was “as edifying as seeing a dog in a parody of breeches and a feather hat, walking on his hind legs” while a black helmsman is compared to a horse. These depictions further dehumanise Africans in the eyes of readers.

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Edward Said was a post-colonial literary critic who coined the term ‘Orientalism’. In his 1993 book Culture and Imperialism, he talks about Conrad. He is much more charitable than his African colleague and credits the author with the creation of a convincing narrative and a powerful voice that pays attention to the “waste and horror” of Europe’s mission in the dark world.

However, Said admits that Conrad recycles the narrative of European domination, and does not show Africans as real people. He writes: “…neither Conrad nor Marlow gives us a full view of what is outside the world-conquering attitudes embodied by Kurtz, Marlow, the circle of listeners of the deck of The Nellie and Conrad.” The full humanity of Africans is compromised in favour of stereotypes.

So, was Joseph Conrad racist? The jury is still out. But as academia expands to include perspectives from those living in the Global South it seems likely that Achebe will have the last work. In a 2003 article in The Guardian, Chinua Achebe is in conversation with a white author Caryl Philips who admires both him and Conrad. There, Achebe offers some insightful remarks with regards to Heart of Darkness:

“You see, those who say that Conrad is on my side because he is against colonial rule do not understand that I know who is on my side. And where is the proof that he is on my side? A few statements about it not being a very nice thing to exploit people who have flat noses? This is his defence against imperial control? If so it is not enough. It is simply not enough. If you are going to be on my side what is required is a better argument. Ultimately you have to admit that Africans are people. You cannot diminish a people’s humanity and defend them.”

This article ends with this insightful exchange, in which Philips examines his own skepticism with regards to Joseph Conrad’s racism (the dialogue in quotation marks is Achebe’s):

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“Yes, you will notice that the European traders have ‘tainted’ souls, Marlow has a ‘pure’ soul, but I am to accept that mine is ‘rudimentary’?” He shakes his head. “Towards the end of the 19th century, there was a very short-lived period of ambivalence about the certainty of this colonising mission, and Heart of Darkness falls into this period. But you cannot compromise my humanity in order that you explore your own ambiguity. I cannot accept that. My humanity is not to be debated, nor is it to be used simply to illustrate European problems.”

The realisation hits me with force. I am not an African. Were I an African I suspect I would feel the same way as my host. But I was raised in Europe, and although I have learned to reject the stereotypically reductive images of Africa and Africans, I am undeniably interested in the break-up of a European mind and the health of European civilisation. I feel momentarily ashamed that I might have become caught up with this theme and subsequently overlooked how offensive this novel might be to a man such as Chinua Achebe and to millions of other Africans.

Achebe is right; to the African reader the price of Conrad’s eloquent denunciation of colonisation is the recycling of racist notions of the “dark” continent and her people. Those of us who are not from Africa may be prepared to pay this price, but this price is far too high for Achebe. However lofty Conrad’s mission, he has, in keeping with times past and present, compromised African humanity in order to examine the European psyche. Achebe’s response is understandably personal.

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Real Risk-Free Rate of Return

Real Risk-Free Rate of Return
Real Risk-Free Rate of Return

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Real Risk-Free Rate

Current 30-day T-bills are yielding 3.5 percent. Your accountant provided you with these interest rate premiums:

  • IP = 1.5%
  • LP = 0.6%
  • MRP = 1.8%
  • DFP = 2.15%

What is the real risk-free rate of return based on this data?

The risk-free rate of return is the theoretical rate of return of an investment with zero risk. The risk-free rate represents the interest an investor would expect from an absolutely risk-free investment over a specified period of time.

The so-called “real” risk-free rate can be calculated by subtracting the current inflation rate from the yield of the Treasury bond matching your investment duration.

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Default Risk Premium

Default Risk Premium
Default Risk Premium

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Default Risk Premium

A Treasury bond maturing in 5 years has a yield of 4 percent. A 5-year corporate bond has a yield of 7 percent. Consider that the liquidity premium on the corporate bond is 0.5 percent. If this is so, what is the default risk on the corporate bond?

A default risk premium is effectively the difference between a debt instrument’s interest rate and the risk-free rate. The premium exists to compensate investors for an entity’s likelihood of defaulting on their debt. It is an additional amount of interest rates paid by a borrower to lender/ investor as a compensation for the higher credit risk of the borrower assuming his failure to pay back the principal amount in future and can be mathematically described as the difference in between the interest rates payable on bond and risk free rate of return.

The premium is determined by Credit history, Liquidity and profitability, Asset ownership

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Expected Interest Rate

Expected Interest Rate
Expected Interest Rate

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Expected Interest Rate

For this problem, examine Treasury securities. Considering the following numbers, what would the yield on 3-year Treasury securities be?

  • Real risk-free = 4%.
  • Inflation expected at 1.5% for this year and 2% for the next 2 years.
  • Maturity risk premium = 0.
Treasury Securities

Treasury securities—including Treasury bills, notes, and bonds—are debt obligations issued by the U.S. Department of the Treasury. Treasury securities are considered one of the safest investments because they are backed by the full faith and credit of the U.S. government.  The income from Treasury securities may be exempt from state and local taxes, but not from federal taxes.

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Required Rate of Return

Required Rate of Return
Required Rate of Return

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Required Rate of Return

  • Stock R’s beta = 1.5
  • Stock S’s beta = 0.75

Consider that the required return on an average stock is 14 percent. The risk-free rate of return is 6 percent. If this is so, the required return on the riskier stock exceeds the required return on the less risky stock by how much?

The required rate of return (RRR) is the minimum return an investor will accept for owning a company’s stock, as compensation for a given level of risk associated with holding the stock. The RRR is also used in corporate finance to analyze the profitability of potential investment projects.

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