Explain Stretegies to Overcome Barriers to Effective Communication Essay Example

Explain Stretegies to Overcome Barriers to Effective Communication Paper Developing effective communication in health and social care| P4: explain the strategies used in health and social care environments to overcome barriers to effective communication and interpersonal interactions. For this question I am going to explain strategies used in health and social care environments to overcome barriers to effective communication and interpersonal interactions. There are many different strategies can be used to overcome barriers of communication in a health and social care settings:   Building relationships and appropriate verbal and non-verbal communication. It is very important to build relationships with people who use services involve skills listening, together with appropriate verbal and non-verbal communication. It also may be important to use friendly, warm non-verbal behaviour that expresses interest in another person such as: * Making effective eye contact(varied and appropriate contact with another person’s eyes We will write a custom essay sample on Explain Stretegies to Overcome Barriers to Effective Communication specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Explain Stretegies to Overcome Barriers to Effective Communication specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Explain Stretegies to Overcome Barriers to Effective Communication specifically for you FOR ONLY $16.38 $13.9/page Hire Writer * Smiling-looking friendly rather than frozen or cold in expression * Adopting a relaxed and calm body posture * Using an appropriate gentle tone of voice Using hand movements and gestures that show interest * Nodding your head slightly while talking to communicate messages such as â€Å"I see,’ or ‘I understand’, or ‘I agree†. It is important to build an understanding of the needs of people we work with in health and social care. Very often, people will make their preferred method of communication obvious. Sometimes a medical or professional social work assessment may needs in order to clarify the person’s needs and their preferred method of communication. All the skills of recognising and overcoming barriers to communicate will be useful to avoid trigger situation, such as aggression. Reflective listening skills are vital in order to make the other person feel valued. 2. Staff training is possible strategy to overcome some barriers of communications. Communicating effectively with depressed, anxious or aggressive people cannot be developing simply by obtaining information. So, formal training courses usually provide opportunities to practise important skills as well as theories about how to overcome communication barriers. 3. Appropriate environment may help to reduce communication barriers by: Improving the lighting Reduce any nose. Move to a quieter or better room. Organize any seating so that people can see and hear each other Work with smaller groups to see and hear more easily. 4. Assessment of needs and using preferred methods of communication. It is very important to understand the needs of people you work with in health and social care. Very often, people will make their preferred method of communication obvious. So, sometimes a professional social work or medical assessment may be needed in order to clarify the person’s needs and their preferred method of communication. For example, people with visual disability can be use BSL (British Sign Language) and Makaton. The signs given help the person, because it gives them extra visual clues as to what is being said. When using Makaton the words are also said as Makaton is used to support what is being said as appose to its own language. Makaton includes not only signs, but also written symbols which are both used or either one is used depending on a persons particular needs and cultures. British Sign Language differs from Makaton, because with Makaton not all the words are signed, the signs are simpler and the words are spoken. For example, when saying Good morning, you first say Good by showing your thumb (fingers folded into palm), then for morning you touch your chest with your finger tips from left to right. This image is used as a symbol of the curtains opening in the morning. Also, may be used Braille (introduced by 1838 the Frenchman Louis Braille) – a system of imprinting dots on paper standing for letters of the alphabet, numbers and punctuation. With this system blind people can read by running their fingers across the dots, and can write by impressing the raised dots into paper using a frame called Braille slate, or a Braille writer. Other possible strategies are: * Use language to describe things * Assist people to describe things * Explain details that sighted people might take for granted * Check glasses. Other aids and equipment. Another example, people with hearing disability may use hearing aids. They are battery-powered electronic devices with small microphones to pick up and increase the volume of sound received by a person. Also, text phones, relay systems and minicoms may be used for people who are deaf or hard of hearing. Other possible strategies are: * Don’t shout. Use normal clear speech and make sure your fase is visible for people who can lip-read * Show pictures or write messages. * Learn to sign (for people who used sign language) * Ask for help from, or employ, a communicator or interpreter for sign languages * Check that hearing aids and equipment are working. For people with physical and intellectual disabilities may be used strategies, such as: * Increase your knowledge of disabilities. * Be calm and patient * Use pictures and signs as well as clear, simple speech * Set up group meeting where people can share speech. Check that people do not become isolated * Use advocates- independent people who can spend time building an understanding of the needs of specific individuals to assist with communication work. 5. Learn Assertive Skills Assertive behaviour is where a care worker is in control of their own actions, it is a balance of an appropriate expression of your own need while understanding the needs and rights of others, therefore not behaving aggressive (anger) or submissive (fear) in a care environment as both emotions will have an effect on others and a possible short or long term affect on you. Being assertive will help to challenge how other people feel about you. Assertive behaviour in a person listens and shows respect to others, tries to solve problems, aiming that no one needs to lose, negotiating (come to an agreement) with others and maintaining a clear, calm voice. An assertive person is able to: * Understand the situation they are in. * Control their personal emotions and remaining calm. * Use the right non-verbal assertive behaviour including varied eye contact, relaxed facial muscles, looking in control, keeping hands and arms by their side. Use the right words and statements in any situation. If a care worker were to act aggressive, this is where they somehow threaten someone, put them down or make them feel inferior to you. This type of behaviour has long and short term affects; the short term affects are that you are releasing some emotions that have been building up or getting some sense of power. Whereas the long term affects may lead to you feeling guilty a nd over apologetic, and you blame others for your behaviour. This will all result in people mistrusting you which will make you feel isolated from others and will contribute in high blood pressure. Being aggressive not only affects you but it also affects others as they may feel hurt, angry or humiliated and therefore retaliate or they may stop being in your company. Some people are aggressive whereas others are indirectly aggressive; this means storing your aggression to be released later or onto someone not related to your aggression. Again this affects you long and short term, short term being that you are able to let off steam onto someone else, you have less anxiety because you are not confronting the cause for your aggression directly, you get what you want and enjoy working behind the scenes. The long term affects is that you could lose control of your aggression, suffer from stress and stop being honest with yourself. Others are also affected as they may feel unfairly criticised by you and come to distrust and distance themselves from you. This is why it is important for care workers to learn assertive skills by watching other professionals and doing the same, as being assertive will help to resolve and problems. Vulnerable people need to be empowered to control their lives, whilst rights and responsibilities also need to be thought through. Assertive behaviour from a member of staff in a care setting will lead to effective communication, as assertive skills. . References Books Portch, T. (1999). Communication and Interpersonal Skills. Great Britain: Hodder and Stoughton

Gucci Group Essays

Gucci Group Essays Gucci Group Essay Gucci Group Essay Executive Summary Gucci Group is a luxury goods retailer focusing on improving their market share while producing high quality fashionable items. Initially, Gucci’s poor business strategy and internal family conflict directly resulted in decreased sales and net income. When Investcorp took control of the company, Gucci regained their success through quality management and acquisitions. Gucci’s product line now includes a large range of products. We would like to continue Gucci’s success and believe that the next major business decision for Gucci is how to manage the new acquisitions. We recommend that Gucci cease further acquisitions of companies to its portfolio and should not challenge the status quo by making big management changes at the group of companies that it has acquired. This will help sustain growth in different segments and maintain an existing customer base. Introduction Gucci Group’s iconic red and green stripe, as well as their G logo, has been associated with luxury, elegance and glamour since 1923. Once a family owned leather goods store, Gucci has expanded worldwide and increased its product mix to include other luxury goods such as purses and shoes. Gucci’s business operations lacked experienced leadership since family members controlled business decisions. The market for luxury goods had become fiercely competitive and Gucci’s lack of business strategy had caused them to lose market share to their close competitors, Moet Hennessy-Louis Vuitton, Hermes and Prada. Gucci financial status had fallen while their competitors had increased their sales and operating margins (Exhibit 4). In 1993, Investcorp bought the remaining shares of the Gucci family and placed the necessary management personnel to help turn around Gucci’s struggling business. : Through a series of acquisitions and business line decisions, Domenico De Sole, President, and Tom Ford, Creative Director, help re-invent Gucci’s brand line and established a firm financial foothold for the company. Gucci acquired three major companies: Yves Saint Laurent Couture, YSL Beaute, and Sergio Rossi to create four divisions of Gucci Group while also generating $3 billions in cash. In the early 1990’s, Gucci’s core customer was a matured, conservative, wealthy woman but the company decided to change their business line to capture the market on the younger, more ashion conscious individual. Identification and Justification of Key Strategic Issue Gucci, as previously mentioned, has evolved from a family business into a global corporation. Along this evolution, Gucci has encountered many challenges. One of the key challenges faced by Gucci is preventing a buyout from one of it’s main competitors, Moet Hennessy-Louis Vuitton, Hermes. In order to prev ent being acquired, Gucci has taken the path to acquiring other companies, and this is the key strategic issue that is challenging them moving forward. Do they continue this path of acquisitions with the capital they have on hand or not. Another key strategic issue that had adversely affected Gucci in the past was streamlining their supply chain and distribution operations. This is related to their key strategic strategy of acquisition. As they acquire companies, they will face the same challenges they have had in the past. Identification and Evaluation of Alternatives Below are the strategic recommendations regarding the future position of the Gucci Group and its new acquisitions. All of these alternatives are mutually exclusive business strategies, and we have evaluated each alternative’s pros and cons should Gucci choose to implement it. Alternative 1: Keep separate management structure and freeze new acquisitions. As of 2000, each of Gucci Group’s new divisions – Gucci, Yves Saint Laurent Couture, YSL Beaute, and Sergio Rossi – had its own management structure. A president or CEO of each of the divisions reported to Domenico De Sole. Our strategic recommendation is to continue managing the newly acquired brands independently while holding off on further acquisitions for now. Pros: Having separate management that ultimately reports to De Sole allows the new divisions to maintain the integrity of each brand and avoid brand dilution, while keeping the overall control of the company in the hands of one man who has proven to be a positive influence on the company. We can also leverage the strength and popularity of the Gucci brand to gain distribution for the smaller names, much like how LVMH leveraged Louis Vuitton’s popularity. By holding off of new acquisitions, Gucci can learn to handle the four brands they currently have before adding extra brands. Cons: Four brands with their own management structure may prove to be difficult for De Sole to wrangle, as the managers could bring their own management styles that may not mesh well with De Sole’s style. With the current hold on acquisitions, Gucci may miss out on opportunities to acquire strong brands. Alternative 2: Increase acquisitions in a number of diverse companies. Most luxury brands have been family-owned or -controlled and, consequently, were single-brand firms for the most part. However, mergers and acquisitions have been growing in the industry, with LVMH leading the way. Our strategic recommendation is to follow LVMH’s lead and acquire a multitude of diverse companies to build the Gucci portfolio. Pros: Family ownership of the Gucci Group had dissolved with the drama and tragedy that plagued the Gucci family, so moving away from the ‘family-owned, single-brand’ system seems like it would strengthen and stabilize the company. Depending on the acquisitions the company makes, Gucci Group could potentially become a lifestyle brand for luxury customers to go to for a diverse set of needs. Cons: If the Gucci name becomes associated with lower quality companies through poorly chosen acquisitions, the Gucci brand could be in jeopardy. Becoming a multi-brand company may take away the focus and attention that each brand, including Gucci, needs to continue being successful. Moreover, acquiring multiple companies now before Gucci management is comfortable with the acquisitions it has already made may be too much too fast for the company. Alte rnative 3: Extend Gucci brand through diffusion lines. Extending the brand through diffusion is another strategic recommendation that would help Gucci increase sales. Pros: With Gucci diffusion lines, the company could target different market segments while maintaining their core business. Extension lines have been successful for competitors such as Emporio Armani and their diffusion line of Armani Exchange. Gucci would be able to attract a new clientele while increasing their customer base. Cons: Diffusion lines may weaken the Gucci brand strength overall due to different quality levels. A new line would also incur large initial capital investment and advertising.

White Paper 33 Essay Example | Topics and Well Written Essays - 250 words

White Paper 33 - Essay Example The age group of between 18 and 24 years reported the highest incidence of application of social media with high percentages of users seeking services through the media. The age group for example reported that about 60 percent of females social media users apply it in soliciting services while about 57 percent of the group’s male social media users sought services through it. Application of social media was also identified among the elderly population, above 65 years, in which about 33 percent of the group relies on social media for obtaining services. The rate at which individuals use social media is also high with about half of the studied population using the social media at least once in a month and about 10 percent of the people using the media on a daily basis (Destination, p. 1). The report further identifies consumers’ power in selecting their mode of communication, whether such mode is applicable to their target recipients or not. This therefore identifies a disadvantage to those organizations that do not use social media. It further identifies an advantage to organization whose strategies have merged marketing with customer care. Further, a satisfactory response in the social media promotes furthers application by about 70 percent as opposed to a non-satisfactory experience that is only likely to promote social media application by 17 percent. About 70 percent of the media users are also likely to re-use the media following satisfactory services. Proper use of social media is therefore necessary for organizations. Such applications can be achieved through channels such as facebook pages, which are the most popular, followed by organizations’ blogs, and twitter (Destination, p. 1). Destination. â€Å"Consumers demand service through social media.† DestinationCRM. October 26, 2012. Web. November 9, 2012.

Political Theory Essay Example | Topics and Well Written Essays - 1750 words

Political Theory - Essay Example These leaders assume their respective positions in government for a specified period of time after which they return to their normal work never to serve the people again. During their tenure in the government, leaders in a republic should serve the interests of the people who elected them at the expense of their personal interests. In any state, republicanism emphasizes on several significant concepts that include dedication to serving the people, advantages of universal political participation, the negative effects of corruption, strict adherence to the rule of law, and the necessity to separate powers. From these concepts, the most significant value that stands apart in republicanism is political liberty. In this case, political liberty transcends the lack of government interference in private affairs to incorporate self-reliance and self-discipline as key determinants of societal wellbeing. Political liberty keeps off the government and its leadership from the private lives of its citizens. The government’s interference with the private lives of its citizens only happens when individual activities threaten the wellbeing of the entire republic. As such, the role of the government in a republic is to protect the entire republic (Duff, 2011). ... Particularly, the essay explores the extent to which Jon Locke’s social contract theory is compatible with the republican ideologies of Niccolo Machiavelli. Understanding Social Contract Social contract is a convention between humans that aims to discard the state of nature. Under this state of nature, individuals coexist peacefully without the interference by the government and its written rules and regulations. Principles of justice based on individual ability to reason efficiently guide the people’s way of life. These principles include the right to liberty and the right to live. They apply to all individuals regardless of race or ethnicity. Through reasoning, most individuals seek to follow these principles; nonetheless, the lack of written regulations results to challenges especially in the manner at which individuals solve the arising interpersonal conflicts (Maloy, 2009). In times of such conflicts, the state of nature becomes a social contract as individuals see k assistance from the state. To solve these conflicts, the state sets up rules and enforces them prompting the people to pay the state for its role in conflict resolution. In this process, the government sets up legislatures, law enforcement units, and non-partisan judicial systems to protect the right of every individual. This theory explains the processes of forming states and governments. Particularly, this theory focuses on the voluntary provision of information to the government by the people. This is because the government serves the people and it requires accurate information from the people in the process of serving them. Jon Locke’s Social Contract Theory and its Compatibility with the Republican Ideologies of Niccolo Machiavelli In this

The Social Network Facebook And Privacy Media Essay

The Social Network Facebook And Privacy Media Essay Introduction: We are living in the golden age of technology. Day by day technology is going to be more important in human life. Every aspect of our life like education, medical, business, information, transport, communication etc. demand technological support. It is helping us many ways in our daily life. Nothing is impossible nowadays. Information technology, given us the power to move around the world within minutes. What we got from IT: the communicative world is blessed of IT. There is no community in the modern world which can go through without IT. People nowadays become much more depended on IT. Operating business, financial transaction, entertainment, communicating everywhere we are using IT. In a word the globe is in palm and it happened for IT. As the Information technology playing an important role in our life but sometimes it is affecting our privacy and social life. Privacy: Privacy refers to personal secrecy or private or confidential information or property. In general everyone has some preference, someone likes to listening music and collecting songs and it is his personal privacy or secrecy. If anyone interfere his listening or collecting music that mean it is interfere in his privacy. In the website http://www.privacilla.org, they published, The word privacy has been used to describe many concerns with the modern world. It is a complex concept even before other concerns are lumped with it. The concept of privacy deserves to be carefully examined. It defies easy, and many proposals to protect privacy have gone forward without a clear articulation of what privacy really is. Importantly, privacy is a personal, subjective condition. One person cannot decide for another what his or her sense of privacy should be. (http://www.privacilla.org/fundamentals/whatisprivacy.html) So privacy has no visible size or feature. It actually depends on person and varies community to community and situation. It might be personal opinion, political view, or likings or sensitive information. Day by day the globe is coming closer by influence of various inventions and technological bless. And the word privacy is going to be much more complicated in this technological arena Social networks: Social networking is a grouping of people of same community or people of same neighbour or same likings or we can say it a group of friends. But in the IT world, social network is the best way of communication among people from same institutes or workplace via internet. For example; Facebook, twitter, MSN and many other open networks. Facebook: Facebook is the second largest social network on internet was founded by former-Harvard student Mark Zuckerberg and launched in February 2004.People using Facebook find their older friends and stay keep in touch with friends and family, make friendship with new people, publish their personal information. Like as, name, gender, interest, study, job etc. people are posting their likings, personal views, or in a word every single moment of our time we are publishing to share with our friends. This information is recorded by the operators in the server. Though sometimes we are deleting from our profile but we cannot delete it from there. How we are affected: According their (Facebook) privacy and policy, Facebook has the right to save our information and to share with third parties if necessary. That mean, with whom they are sharing our information we do not know it. In the same hand the third party, they do not have any obligation to share our information. So the third party can share our information with anyone or can use our information for any purpose. And thats how we are losing our privacy. Our personal preference is going to anyone who is not familiar with us. On the other hand anyone in our friend list can affect us or our social status putting any comment or any post in our wall which result harassment and hamper social status. Again various companies they can use the preference of individuals for their surveys without acknowledging people from their information given at the time of having the account of any social network. Another thing is, as Facebook is an open source network when you sign in you are gett ing a lot of advertisement or application where someone can easily access. And if anyone access in those applications, there is terms that they can access your personal information. By this you are giving your information to them unwillingly. A case study about Facebook abuse/offence: in 28th of August 2010 the popular newspaper METRO in UK published,  £ 10,000 bill for Facebook Jokes'. The news was about two friends. One of them posted a joke about his friend. He said his friend, he likes kids and he is a gay. And it was claimed that about 800 people watched this and that person was so scared to leave home. And their family expressed, it was a horrible and really stressful time for us. [http://e-edition.metro.co.uk/2010/07/28/] This case has been solved by court and the magistrate court fined  £10,000 the person, who commented about his friend. Recent warnings about Facebook: Recently The chief executive of search engine Google has predicted, Web users will one day be able to change their identity in order to escape the traces of their misspent youth available on social networking sites such as Facebook. [http://www.guardian.co.uk/media/2010/aug/18/google-facebook] Jason Deans guardian.co.uk, Wednesday 18 August 2010 16.54 BST Article history In the same hand the founder of Facebook cited, The Age of Privacy is over. In a six-minute interview on stage with TechCrunch founder Michael Arrington, Zuckerberg spent 60 seconds talking about Facebooks privacy policies. He said, If he were to create Facebook again today, user information would by default be public, not private. [http://www.readwriteweb.com/archives/facebooks_zuckerberg_says_the_age_of_privacy_is_ov.php ,January 9, 2010] So that mean in average everyones privacy is the risk. No one is in secret at least who is using the social networks. Conclusion: Finally we can say that social networks does not only publishing or reciting information about personal but also it is a medium of entertainment. If some steps can be taken to prevent the invasion of privacy all the networks are for our society and our community; to entertain people, keeping them happier and peaceful. On the other hand individuals should be much more aware about their privacy and secrecy. And we can stop to interpret anyones personal life and preference and thus the networks of community will be fruitful otherwise day by day it is going to much worse situation as the founder of Facebook is aware about the privacy and policies of society.

Similarities Between Hurston’s Novels, Seraph on the Suwanee and Their Eyes Were Watching God :: Compare Comparison Essays

Similarities Between Hurston’s Novels, Seraph on the Suwanee and Their Eyes Were Watching God Seraph – page 153 So, calling soothingly to Earl, Jim started from the south border of the sink hole and began to pick along to where Earl stood braced between two great cypress trees. Earl’s face was cold and unrecognizing. Jim caught hold to vines and shrubs to keep from slipping off the precarious footing into the water, and said nice things to Earl and kept going. He was a good half way along the dangerous route when Earl stepped forth and leveled the rifle and took aim. Eyes – page 184 He steadied himself against the jam of the door and Janie thought to run into him and grab his arm, but she saw the quick motion of taking aim and heard the click. Saw the ferocious look in his eyes and went mad with fear as she had done in the water that time. She threw up the barrel of the rifle in frenzied hope and fear. Hope that he’d see it and run, desperate fear for her life. But if Tea Cake could have counted costs he would not have been there with the pistol in his hands. No knowledge of fear nor rifles nor anything else was there. He paid no more attention to the pointing gun than if it were Janie’s dog finger. She saw him stiffen himself all over as he leveled and took aim. The fiend in him must kill and Janie was the only thing living he saw. Ms. Hurston’s two books Seraph on the Suwanee and Their Eyes Were Watching God are remarkably similar in many aspects, and I believe that these two passages exemplify that likeness. These two scenes take place just before a person is shot, Tea Cake in Eyes, and earl in Seraph. Janie kills (shoots) Tea Cake because he contracted rabies during the hurricane by a dog, and Earl was killed (shot) by several of the townsmen because he tried to rape Lucy Ann. Both Tea Cake and Earl were rendered mad and lost all humanity due to their circumstances. Both men needed help long before someone realized they could possibly be a danger to themselves or others. Both men were killed for attacking a woman, even though they clearly could not control themselves. Jim and Janie both try to help, but ultimately fail.

Bw/Ip International, Inc Case

Valuation of Corporate Finance BUFN 750 BW/IP International, Inc 1? BW/IP is a good candidate for the leverage buyout. * Steady cash flow (around 30 million per year). * Strong management team. * Positive NPV (about 61. 5 million) The NPV of BW/IP is 61. 5million(301-239. 5). Thus, we are quite optimistic about this BW/IP’s project. Calculating the NPV. Method: APV: VL=VU+PV (ITS). We can get the interest paid schedule from the BW/IP’s projected operating performance, which means there is a pre-determined interest paid to debt holders.Assumption: Tax rate: 38%. From 1991 to 1993, the tax rate remains to be constant, which is 38%. And we assume that the tax rate will continue to be 38%. Exhibit 1 shows the process of calculating tax rate: Growth rate:We assume the project will last for infinity, and grow in perpetuity after year 1992. And we use the average annually growth rate from 1990 to 1993 as our perpetuity growth rate, which is 2. 3%. Change in NWC:We subtract cas h from NWC provided in the case and we get the adjusted change in NWC.The calculation is presented in Exhibit 2. Discount rate:Typically, the investment horizon of a common leverage buyout range from 5 to 10 years, so we use the ten years treasury yields, ending at 1987 as the risk free rate, which is 8. 79%. For the market return, we use the S&P 500 index in 1980s, which is 12. 79%. Thus, we can easily get the risk premium. Exhibit 3 shows the process of calculating discount rate. Tax shields:Giving the interest paid schedule, we can figure out the tax shield each year from 1988 to 1993 at the tax rate of 38%.Discount rate: with a pre-determined debt and interest paid, we should use the cost of debt to get the present value of interest tax shield, because the risk of tax shield is moving together with the risk of the loan (debt), instead of the total assets. We assume the corporate borrowing rate is the same with BBB long-term bond, which is the cost of debt, 10. 63%. Thus the pres ent value of tax shield from 1988 to 1993 is 31. 91. We assume perpetual debt from the year 1994, and the same growth rate, which is 2. 3%. Exhibit 4 shows the processing of calculating tax shields.The FCF is presented in Exhibit 5. Sensitivity Analysis for BW/IP is presented in Exhibit 6 2? We favor the proposed acquisition of UCP. The primary sources of value in the transaction include: * Low capital or cash requirement UCP is a small firm, which would require additional borrowing by BW/IP of only 13 million. * Synergy and efficient gains. UCP’s product line complemented BW/IP’s extremely well because UCP’s most attractive feature was its installed base in the petroleum industry and together they would have the largest installed base in the petroleum segment. Improved management Takeover can improve management because interest and principal payments can force management to improve performance and operating efficiency. The proposed price is reasonable, because it is higher than the levered value of the project, which is 48. 17. Method: APV: VL=VU+PV (ITS). Assumption: Tax rate: Tax rate=38%, which is the same as the tax rate for BWIP. Growth rate: We use the average annually growth rate from 1991 to 1993 as ourgrowth rate,which is 6%. Discount rate: We use the ten years treasury yields, ending at 1988 as the risk free rate, which is 9. 4%. Exhibit 7 shows the calculation of Vu Exhibit 8 shows the calculation of PV(ITS) Sensitivity Analysis for UCP/IP is presented in Exhibit 6 3. How do the various features of the BW/IP buyout affect the company’sdecisions about long-horizon opportunities such as the UCP acquisition? What are the advantages and disadvantages of the 1987 buyout, viewed as afinancial program? After the buyout, BW/IP became a privately owned company which was less dependent from Borg-Warner Corporation than before in decision making.For the opportunities that the managers favored, such as the UCP acquisition, the compa ny had more chance to carry on the deal. However, for the case in which larger amount of financing is required, the company may not be competitive enough without Borg-Warner’s financial support. The buyout could generateda better and a more efficient management, by changing the corporate structure (including modifying and replacing executive and management staff, unnecessary company sectors, and excessive expenditures), BW/IP can revitalize itself and earn substantial returns.However, since the 1987 buyout is highly leveraged, the new company has a high debt-to-equity ratio, which means the company needs to achieve required return to pay the cost of debt or faced the chance of bankruptcy. Besides, the leveraged buyout is also considered to be a risky project, which may be easily affected by economics environment. The chance of success tends to be larger under steadily growing economy, while smaller in recession periods. 4. As one of BW/IP’s bankers, would you approve t he company’s request for a waiver of covenants and financing of the UCP acquisition?Yes. A banker will not approve to finance a project unless he has confidence in the profitability of the project and in that he can get his money back. The projected NPV of the UPC deal is 48. 17 million dollars, which is far bigger than the offer 18. 5 million dollars. To analyze this qualitatively, the expected success of the UCP acquisition comes from several aspects. Undeniably, the economic and industrial forecast is against financing a risky project . However, the deal will generate positive synergies since UCP’s product line complemented BW/IP’s extremely well.BW/IP will raise its competence in both original equipment and aftermarket sector domestically as well as internationally after acquiring UPC. Besides, as mentioned in the case, the good credibility of Mr. Valli and his team and that C&D’s principals were experienced and respected in the financial community wi ll affect bankers’ attitude. Exhibit 1: Tax rate | 1987| 1988| 1989| 1990| 1991| 1992| 1993| EBT| -9. 56| -0. 001| 8. 91| 12. 95| 17. 31| 19. 49| 23. 57| Income tax| 2. 8| 0| 0| 3. 61| 6. 58| 7. 41| 8. 96| Tax rate| -29%| 0%| 0%| 28%| 38%| 38%| 38%| Exhibit 2: Change in NWC AR| 58. 68| 53. 1| 51. 69| 55. 08| 59. 11| 63. 6| 67. 91| 72. 54| INV| 58. 5| 58. 39| 60. 72| 64. 66| 69. 57| 75. 46| 80. 29| 85. 53| Other current asset| 3. 91| 3. 49| 4. 42| 4. 7| 4. 99| 5. 31| 5. 64| 5. 99| AP| 15. 78| 18. 12| 19. 73| 20. 94| 22. 32| 23. 78| 25. 19| 26. 69| Other current liabilities| 14. 92| 17. 29| 15. 19| 16. 12| 17. 1| 18. 23| 19. 36| 20. 56| NWC| 90. 39| 79. 57| 81. 91| 87. 38| 94. 25| 102. 32| 109. 29| 116. 81| Change in NWC| | -10. 82| 2. 34| 5. 47| 6. 87| 8. 07| 6. 97| 7. 52| Exhibit 3: Cost of capital Cost of capital| 17. 5%| CAPM| Rf| 8. 79%| Exhibit 7 | ?a| 1| Hint| Market return| 12. 79%| S&P 500 index in 1980s| Risk premium| 4. 00%| |Exhibit 4: Interest tax shield | 1988| 19 89| 1990| 1991| 1992| 1993| Total interest paid| 0. 63| 1. 75| 1. 66| 1. 51| 1. 4| 1. 22| ITS: tax [email  protected]%| 0. 24| 0. 67| 0. 63| 0. 57| 0. 53| 0. 46| Cost of debt 10. 63%| | PV (ITS) 1988-1993| 31. 91| PV (Terminal value)| 37. 1| Total PV (ITS)| 69. 00| Exhibit 5: Free cash flow | 1986| 1987| 1988| 1989| 1990| 1991| 1992| 1993| FCF| | 39. 37| 26. 8| 24. 62| 24. 11| 24. 57| 24. 72| 25. 8| Growth rate| 2. 3%| Terminal Value| 270| VU| 232. 89| PV (ITS)| 69| VL| 301. 89| Exhibit 6: Sensitivity analysis for BW/IP * Buyout| | * NPV| * % change of NPV| * Growth rate| * 0. 00%| * 32. | * -47. 91%| | * 2. 30%| * 62. 39| * 0. 00%| | * 4. 60%| * 109. 5| * 75. 51%| * Discount rate| * 10. 79%| * 81. 5| * 32. 52%| | * 12. 79%| * 61. 5| * 0. 00%| | * 14. 79%| * 44. 5| * -27. 64%| * Cost of debt| * 9. 63%| * 64. 5| * 4. 88%| | * 10. 63%| * 61. 5| * 0. 00%| | * 11. 63%| * 59. 5| * -3. 25%| Exhibit 7:The calculation of Vu | 1988| 1989| 1990| 1991| 1992| 1993| EBIT| -1. 15| 2. 59| 3. 29| 3. 96| 4. 34| 4. 74| Income tax @| -0. 44| 0. 98| 1. 25| 1. 50| 1. 65| 1. 80| NI| -0. 71| 1. 61| 2. 04| 2. 46| 2. 69| 2. 94| FCF| | | | | | | Depreciation| 0. 48| 0. 6| 0. 99| 0. 90| 0. 84| 0. 84| Change in NWC| | | | | | | Change in AR| 1. 13| -0. 15| -0. 22| -0. 20| -0. 13| -0. 14| Change in inventory| -0. 36| 0. 68| -0. 21| -0. 18| -0. 12| -0. 13| Change in other asset| 1. 73| 0. 00| 0. 00| 0. 00| 0. 00| 0. 00| Change in current liability| 0. 27| 0. 18| -0. 01| -0. 35| -0. 04| -0. 04| Change in NWC| 2. 23| 0. 35| -0. 42| -0. 03| -0. 21| -0. 23| Capital expenditure| 0. 18| 1. 20| 0. 40| 0. 40| 0. 40| 0. 40| FCF| -2. 64| 1. 02| 3. 05| 2. 99| 3. 34| 3. 61| Growth rate| | | | -2%| 12%| 8%| Average growth rate| 6%| | | | | | Terminal value| | | | | 53. 15| | FCF| -2. 64| 1. 02| 3. 05| 2. 99| 56. 9| | VU| 40. 28| | | | | | Exhibit 8:The calculation of PV(ITS) | 1988| 1989| 1990| 1991| 1992| 1993| Interest | 0. 63| 1. 75| 1. 66| 1. 51| 1. 40| 1. 22| ITS: tax [email  protected]%| 0. 2 4| 0. 67| 0. 63| 0. 57| 0. 53| 0. 46| Terminal value| 2. 18| | | | 10. 01| | PV (ITS)| 7. 97| | | | | | Exhibit 9: Sensitivity analysis for UCP/IP UCP| | NPV| % Change of NPV| Growth rate:| 0. 00%| 14. 35| -51. 76%| | 6. 00%| 29. 75| 0. 00%| | 12. 00%| 278. 5| 836. 13%| Discount rate:| 10. 79%| 46. 5| 57. 63%| | 12. 79%| 29. 5| 0. 00%| | 14. 79%| 20. 21| -31. 49%| cost of debt:| 9. 63%| 30. 5| 3. 39%| | 10. 63%| 29. 5| 0. 00%| | 11. 63%| 27. 5| -6. 78%|