Commentary on Iagos first soliloquy Essay Example

Commentary on Iagos first soliloquy Paper Towards the end of Act 1 in Shakespears Othello, we come across a significant soliloquy recited by an important character in the play, Iago. Throughout the play, Shakespear has used Iago as a working force towards the plot. The whole plot of the novel revolves around this character and what he plans to do next, and this seems clear by the end of Act 1. Thus, Shakespear providing the audience with Iagos soliloquies is like giving an overview of the what is about to happen, creating a clear picture in the audiences heads and then working towards it, and also a deep insight into Iagos character, and his point of view of how things are shaping out. Prior to Iagos first soliloquy, Iago has convinced Roderigo, who had seemed so sure of failure that he was planning on committing suicide, that he is going to get what he wants as long as he keeps paying Iago. Here, we see Iagos manipulative skills at work. Even though Iago has failed in an attempt to hurt Othello, he is determined to get what he wants, and thats how he conjures up another brilliant plan in his soliloquy. This time, he plans on using Michael Cassio, who is like his rival as he received the promotion instead of Iago. Iago is going to create a picture in Othellos head that Cassio is too close to his wife, Desdemona, and that they are having an affair. In this manner, Iago will have caused enough damage to Othellos relationship with Desdemona, and hence Othello, and since Othello would have fired Cassio from his position, he would have no choice but to employ Iago. According to his plan, he will steal Cassios place too, and cause pain to Othello, whom he hates. We will write a custom essay sample on Commentary on Iagos first soliloquy specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Commentary on Iagos first soliloquy specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Commentary on Iagos first soliloquy specifically for you FOR ONLY $16.38 $13.9/page Hire Writer In Shakepears portrayal of the characters in the play, Iago seems to have all of the forces to be working towards him. Due to this, Iagos plan seems to be inevitable. Iago is able to derive his purpose from all the people in society. He hates Michael Cassio as he took the promotion that Iago was supposed to have, and thus in his plan he is both going to use him against the Moor and get him fired from his military status. This plan of Iagos becomes a much easier task because of Cassios personality. Cassio, as mentioned in Iagos soliloquy, is a well mannered and handsome man, who would be the perfect man to cause jealousy and suspicion to any husband. This is seen in Iagos folloqing quote, He hath a person and a smooth dispose To be suspected, framed to make a woman false. Apart from Cassio, Iago hates the Moor (Othello) too, and hence his plans main focus is to cause Othello pain. The task of misguiding Othello into believing false stories about Desdemona and breaking his relationship with her is made easier for Iago because of the straightforwardness of Othello. He believes whatever appears to him, and hardly questions or suspects anything appearing right to him. Iago says in his soliloquy that, The Moor is of free and open nature, That thinks men honest that but seem to be so, And will as tenderly be led by the nose As assess are. This basically means that Iago, who as we have witnessed already as a master of manipulation, will have no difficulty in misguiding and manipulating Othello the way he wants to. Here in this quote Iago also makes a simili of Othello with an ass, which shows Iagos feelings towards Othello. Similarly, Iago makes another simili of Roderigo, who has been giving money to Iago for Iagos help in aquiring Desdemona, with a snipe, which is a long-billed bird, used as a symbol for worthlessness. Here also, we see the character of Roderigo from the point of Iago, and he has also been used by Iago as a source of profit. The most important advantage for Iago of all, is of course his reputation among all the people. All the people in Venice ironically think of Iago as one of the most honest and loyal people in the military staff, and hence everybody respects Iagos word the most and his views the most. Due to this, Iago will be easily able to manipulate Othello. This knowledge is known to Iago as he states in his soliloquy, He holds me well: The better shall my purpose work upon him. With all these things working in Iagos favour, it seems likely for Iago;s plan to work. Hence here Shakespeare seems to portray that all the forces are working for the evil

Free Essays on Methodism And Female Clergy

John Wesley(1709-1791) was one of the most influential men of the last three hundred years. The movement he started is alive and well today, and takes many shapes. Wesley’s contributions to the Christian faith have benefited both men and women alike. However, with particular regard to women in ministry Wesley has helped pave the way for equality. For women in the church the ultimate sign of equality is ordination. Only when a woman has equal athority and opertunity can she be considered equal to men. While Wesley himself never endorsed ordination, and only officially sanctioned female preaching in 1787, he did hold women in high regard. (Chilote) They were integrally involved in early Methodism, and in many ways made the movement possible. John Wesley’s work influenced many people and spurred many other movements. One such movement was the holiness movement founded by B.T. Roberts (1823–1893) a predecessor of Wesley. Roberts would come to disagree with Wesley on this issue, and would advocate for women’s ordination. However, like John himself, after his death the movement would be out of his control. John Wesley received much of his early spiritual and academic training from his mother Susanna Wesley (1670-1742). Susanna was a strong, intelligent, deeply spiritual, and mature woman. While John was growing up he personly witnessed the heart and character of his mother. For example, while her husband was absent in London in 1711, Susanna Wesley adopted the practice of reading and instructing her family in spiritual matters. One of the family servants told his parents and they too wished to come. These told others, and they came, till the congregation totaled forty, and increased till they were over two hundred. She read to them the best sermons she could find in the library, and talked to the people freely and affectionately. (Wakeley) It was from early experiences such as these that John Wesley saw the value in allowing wo... Free Essays on Methodism And Female Clergy Free Essays on Methodism And Female Clergy John Wesley(1709-1791) was one of the most influential men of the last three hundred years. The movement he started is alive and well today, and takes many shapes. Wesley’s contributions to the Christian faith have benefited both men and women alike. However, with particular regard to women in ministry Wesley has helped pave the way for equality. For women in the church the ultimate sign of equality is ordination. Only when a woman has equal athority and opertunity can she be considered equal to men. While Wesley himself never endorsed ordination, and only officially sanctioned female preaching in 1787, he did hold women in high regard. (Chilote) They were integrally involved in early Methodism, and in many ways made the movement possible. John Wesley’s work influenced many people and spurred many other movements. One such movement was the holiness movement founded by B.T. Roberts (1823–1893) a predecessor of Wesley. Roberts would come to disagree with Wesley on this issue, and would advocate for women’s ordination. However, like John himself, after his death the movement would be out of his control. John Wesley received much of his early spiritual and academic training from his mother Susanna Wesley (1670-1742). Susanna was a strong, intelligent, deeply spiritual, and mature woman. While John was growing up he personly witnessed the heart and character of his mother. For example, while her husband was absent in London in 1711, Susanna Wesley adopted the practice of reading and instructing her family in spiritual matters. One of the family servants told his parents and they too wished to come. These told others, and they came, till the congregation totaled forty, and increased till they were over two hundred. She read to them the best sermons she could find in the library, and talked to the people freely and affectionately. (Wakeley) It was from early experiences such as these that John Wesley saw the value in allowing wo...

International relation study guide Essay Example | Topics and Well Written Essays - 250 words

International relation study guide - Essay Example The lack of reality is depicted by incapability to embrace and regulate the interaction and display the actual practice in real life situation to the scholars. Instead, it is based on stereotypes and affects the self understanding of international relations. These deny the scholars the academic relevance in the fact that they only learn but cannot put the same into practice. Most of the academic concept revolves around research driven teaching responding to ancient ideologies rather than the present day real life situation. This offers a challenge for making the study central to the discipline and do not improve the academic understanding by the scholars. It lacks the ability to solve human conflicts but rather since it fails to nurture the formation of critical ideas and formation of intellectual sensitivity in the scholars mind. This has affected the self understanding and does not address the global dimension of political, social and cultural behavior and how it can be used to improve the international

Human and Animal Interrelationships Term Paper Example | Topics and Well Written Essays - 750 words

Human and Animal Interrelationships - Term Paper Example This essay has its primary concern being to investigate the interrelationship between people and animals (both domestic and wild animals) since the olden days up to date. Here in lies the importance of human and animal interrelationships. In addition, it involves an outline of the factors that bring about the changes. Further, it includes suggestions of how to improve the interrelationship of human and animals. Finally, it ends by the summary and a conclusion of the essay. Interrelationship of human and animals In the olden days, human beings neglected animals and considered them (animals) harmful to human health. The interrelationship varies in different societies. For instance, in some societies, there was the use of domestic animals specifically cattle, for the purpose of transportation. In other societies, the use of cattle was principally to give support to farm work. Due to this (farming activities), human beings reared bulls with the purpose of using them to plough big farms. On the other hand, animals depended on human beings for resources such as food. This brought about dependability in that they (animals and particular individuals) relied on each other for various needs (Jonge 154). The interaction between man and wild animals is different from the relationship of man and domestic animals. This is due to activities such as hunting, whereby man continue to humiliate the lives of wild animals. This leads to wild animals hiding away from hunters. This denotes a poor interaction between human and wild animals. Today, there is prohibition of hunting activities since such an act is termed to be illegal and leads to decrease in animals within the ecosystem. Continuity in relations of human beings and animals changed due to diverse reasons. For instance, change in technology contributed to a decrease in dependability level. This is because technology leads to establishment of better farming methods. It leads to adoption of modern farming machinery, which in turn resulted to rearing animals for domestic purpose (beef and milk). Importance of human and animal interrelationships Several positive effects result from the relations of human and animals. For instance, there is reduced fatigue on the side of human kind. This is due to less energy used when undertaking tasks like farming, and it is because human kinds use animal energy to perform specific farming activities. The interrelationship helps to improve performance capability of animals as well as their welfare. This is evident in that Jensen states that, â€Å"poor relationship interactions elicit negative emotions such as fear† (114). This necessitates human beings to be keen when handling animals. Factors influencing human and animal interrelations Better relations exist only when both human and animal are in good health. Health amongst other factors determines the ability of both humans and animals to have a better co-relationship. Health is the source of morale required by all living beings to undertake designed tasks with less impeding characters. Unhealthy human beings will tend to have less concern on the welfare of animals. Due to an unhealthy status, animals lack potential to perform tasks (for example farming) requiring application of much efforts. The use of sign language is vital especially when directing animals on the farm (Jensen 113). This helps improve the level of understanding on animals. How to improve human and animal relations Improving the relations between human beings and animals is vital for the well-being of the society. It signifies the degree of understanding between human and animals. This leads to less economic defects resulting from poor interrelations. Some of the strategies to improve the relationship

THE IMPACT OF MONETARY POLICY ON NIGERIAS ECONOMIC DEVELOPMENT Essay Example for Free

THE IMPACT OF MONETARY POLICY ON NIGERIAS ECONOMIC DEVELOPMENT Essay Monetary policy being an economic tool is used to stabilize the economy. It is a tool used by the government through monetary agencies like the Central Bank to control the supply of money in an economy. It is used to bring about economic growth and development through the control of inflation. It impacts the economy cannot over-emphasized. It has very positive impacts on the economy and helps in building a sustainable economy. Monetary policy is the process by which the monetary authority of a country controls the supply of money, often targeting a rate of interest for the purpose of promoting economic growth and stability. It is maintained through actions such as increasing the interest rate, or changing the amount of money banks has to keep in the vault(bank reserves). It can be used to increase or decrease the volume of money in circulation based on the situation at hand. PURPOSE OF THE STUDY The intent of the proposed study is to critically examine the impact of monetary policies on the Nigerian economy. The focus will be on how monetary policies adopted in recent years have impacted on the Nigerian economy. How the federal government have strived through the use of monetary policies to stabilize and develop the Nigerian economy. The intent is to provide adequate information to readers on the roles played by monetary authorities and monetary policies in ensuring economic growth and development in the entity called Nigeria. An objective approach shall be employed in order to bring about valid arguments and conclusions. LITERATURE REVIEW Scholars in the economic and financial field have written articles on the proposed research topic. Professor Kunle Adamson in 2002 wrote an article in this regard.he placed emphasis on the then proposed re-denomination of the naira by the then CBN governor Professor Charles Soludo. He critically analysed how the re-denomination of the naira would have impacted the Nigerian economy. Another literature to be reviewed is the article written by Dr Okoro A. Sunday(Ph.D) of the Ebonyi State University. He critically examined the long-run equilibrium relationship between monetary policy instruments and economic growth in Nigeria. The intent  of the proposed research is to explore the various angles to the research topic. The poor implantation process would also be critically examined.

Asthma Essay -- essays research papers

Asthma is a condition of the bronchial tubes characterized by episodes of constriction and increased mucous production. A person with asthma has bronchial tubes that are super sensitive to various stimuli, or triggers, that can produce asthma symptom.In other words, asthmatics have special sensitivity that causes their lung tissue to react far more than is should to various stimulating factors or triggers. For this reason, people with asthma are said to have "twitchy airways."Some symptoms that people with asthma commonly experience are chest tightenings, difficulty inhaling and exhaling, wheezing, production of large amounts of mucous in their windpipes and coughing.Coughing can be frequent or intermittent, and can be loose-reflecting extra mucous secretion in the airways or dry and deep-reflecting tight bronchospasms. Not all these symptoms occur in every case of asthma.Sometimes people may have coughing without and symptoms for months or even years before it's realized that they are asthmatic. Interestingly enough, asthma symptoms are most severe at night, while we're lying down our airways narrow as a result of gravity changes. Also our lungs do not clear secretions as well at night, which leads to mucous retention, and that can increase the obstruction to air flow. Furthermore, at night our bodies produce smaller amounts of certain chemical that help to decrease airway spasms and keep airway tubes open. All of these factors add up to a greater chance of symp...

Deutsche Brauerei Essay

Deutsche Brauerei was founded in 1737 and has been in the Schweitzer family for 12 generations. The company produces quality beer and has won awards over the years and is owned entirely by 16 uncles, aunts and cousins. In 1998, Deutsche Brauerei expanded into Ukraine. Despite the Russian debt crisis, the popularity of Deutsche’s beer increased its sales greatly and within three years of launch, Ukrainian consumers accounted for 28% of Deutsche’s sales. Furthermore, most of the unit growth in sales during that time period was also contributed by Ukraine. In an attempt to market the beer even more aggressively, Lukas hired Oleg Pinchuk, a marketing guy who understood the Ukrainian markets and had previous experience of marketing beer for a major Ukrainian beer producer. In the following report, we aim to evaluate the past and prospective financial performance of the company, dividend policy and to critique its liberal credit and inventory policies. An appropriate compensation scheme will also be recommended. Adoption of a Compensation Scheme for Oleg Pinchuk It is our belief that Oleg Pinchuk does deserve an increase in his compensation package to provide incentive for him to stay and provide future results. His strategies for setting up infrastructure in the Ukraine have been fundamental to the company’s sales growth. We are also concerned that some of his current policies may not be profitable and are taking on too much risk as the economy shows signs of a recession. Also, we highly recommend that the design of the compensation package be changed as it currently creates a large agency problem. In 1998, Deutsche Brauerei employed Oleg Pinchuk as the Company’s Sales and Marketing Manager. Previously Pinchuk has worked for a major beer producer in the Ukraine giving him invaluable insight into the industry and environment. The main goals he was placed with was to market Deutsche Brauerei’s beer more aggressively while taking advantage of the large opportunities existing in Central and Eastern Europe. â€Å"Our beer almost sells itself; discount pricing and heavy advertising are unwarranted. The challenge is getting people to try it and getting into a distribution pipeline. † Pinchuk quoted. Initially in 1998, Ukraine had no beer distributors, presenting a large problem – the company had no means of distributing the product amongst ustomers. Distributors in the Ukraine had no capital and could not receive financing from banks to set up their business because they had no collateral, low profits, negative cash flows and were seen as a high risk. They were also not able to bear the credit terms that were currently implemented on the German distributors . This is where Pinchuk’s strategies have been essential for our expansion into the Ukraine. Pinchuk, on a small budget, managed to organise five distributors and set up warehouse arrangements. He relaxed the credit policy for the Ukraine distributors from 2% 10, net 40 to 2% 10, net 80 – essentially financing their business and making it possible for them to set up and operate. Carrying a substantial part of the distributor’s inventory also took pressure and costs away from the distributors while making it possible to respond rapidly to changes in demand. These strategies have increased customers in the Ukraine from 0 to 211, with even more expected in 2001. For Oleg’s strategies to be implemented, the business has required large working capital investments. Particularly in accounts receivable where days in receivables is nearly 90 days. We believe that Pinchuk’s analysis of the return on investment has been overstated because he hasn’t taken into account the investments in inventory and capital expenditure that would also be needed. Exhibit 3 shows our adjusted analysis of the return that the business is receiving after taking into account changes in inventories and capital expenditure. We assumed that 85% of changes in inventory and 90% in capital expenditure were attributed to investment in the Ukraine. These assumptions are explained in the exhibit. Our results still produce a high return of 42% in the year 2000 which is much higher than the cost of financing long-term debt at 6. 5%. Notably, these investments are risky and the company needs to compare the return to their risk adjusted cost of capital for the Ukraine and not the cost of financing the debt to see if it is worthwhile. Exhibit 4 gives a good analysis of how these policies have affected the business’ performance and situation. Although sales growth has been consistently large, operating profit margin has decreased overall since his strategies were implemented. Return on equity and net assets have increased and in the year 2000 were 10. 3% and 8. 4% respectively. This is a good result for the business and shows efficient management of assets. It seems that Pinchuk’s strategies were possibly harmful to the business by decreasing the profit margin and taking on a lot of risk. It is our belief that the credit policy should not be relaxed and could even be tightened to less than 80 days. Unfortunately, reducing risk by tightening the policy would be accompanied by a decrease in sales. Although Pinchuk’s strategies have been potentially damaging, we do believe that he deserves an increase in his salary for expanding the company despite facing difficult conditions. His current compensation package is a base salary of EUR40,000 plus an incentive payment of 0. 5 % of sales growth. The current compensation package provides Pinchuk with an incentive to pursue projects that are risky to the company like extending large credit to distributors who are unable to pay it back. This would increase sales, thus increasing his salary, but would have a negative effect on both profits and the company. His incentive payment needs to be aimed more at collection and profits rather than sales growth. Our recommendation is to increase his base salary to EUR50,000 and have his incentive payment tied to annual profits (0. 6% of the annual increase in profits). However, in our recommended financial plan for 2001, there is a projected net profit of EUR 2,712,000. This is a decrease in profits from the previous year and would imply that Pinchuk would receive no incentive payment for 2001. Hopefully this would motivate him to increase the following year’s profits by revising his marketing and collection strategies. Analysis of Dividend Declaration Traditionally, DB pays out 75% from earnings as dividends each year to shareholders. At the moment, the company has a cash shortage as it is holding high levels of inventory and is extremely relaxed in credit terms for their Ukrainian distributors. Paying out dividends at 75% would mean increasing debt in order for the company to fund their proposed investment in a new plant. This would add strain on the already huge short-term debt that they have taken on. The possibility of a financial downturn in 2001 adds to the uncertainty of an increase in profits as projected in the financial plan. Guaranteeing that the company will pay out EUR698,000 in dividends might be too risky. Rather than rely on more bank borrowings, Deutsche Brauerei should retain more earnings to cover their bank borrowings and to also finance their future investments and projects. In addition, should there be a financial crisis, the retained earnings would help to cushion the impact from the crisis. As most of the shareholders are older members of the Schweitzer family, and are retirees who depend on the dividend payout, reducing the dividend payout might cause some upset. However, paying out a dividend percentage of 75% is causing more harm to the company. By reducing this percentage to 60%, the company is able to retain 40% of their net profits for reinvestment and financing future projects. These retained earnings would also help ease the problem of their current cash shortage. Dividend Payout| 50%| 60%| 75%| | 2001| 2002| 2001| 2002| 2001| 2002| Net Income| 2712| 3439| 2712| 3439| 2712| 3439| Dividends| 1356| 1720| 1627| 2063| 2034| 2579| | | | | | |   | Retention of Earnings| 1356| 1720| 1085| 1376| 678| 860| The table above shows the changes in retained earnings according to the changes in dividend percentages – the higher the dividend payout, the lower the retained earnings. It is recommended that, in the first quarter of 2001, the company should pay out the same amount of dividends which the shareholders received in 2000 (EUR 546, 500). It should be explained that if the forecast for 2001 is correct, and there is no financial crisis, the shareholders can expect a larger dividend payout in the next quarter. From our recommended financial plan (i. e. net profit is EUR 2,712,000), paying out dividends of 60% would mean that the shareholders can expect to receive a payout of EUR 406,800 in the second quarter. Analysis of Deutsche Brauerei’s 2001 Financial Budget One of the main concerns for Deutsche Brauerei’s financial budget for 2001 is its heavy reliance on short-term debt financing. This is mainly due to operating strategies, policies, large sales growth, dividends and capital expenditure being financed through working capital. These have all attributed in draining the company’s cash and causing the business to finance the investment through working capital using short-term borrowing. The overall reliance on debt financing has stayed around 42% (debt/total capital ratio, Exhibit 4). The main borrowing used by Deutsche Brauerei has been short-term debt, so the company has incurred a large cash drain. Short-term debt requires fast repayments to be made and normally charge a higher interest rate than what is charged on long-term debts. Short-term bank borrowings have increased dramatically from 1997 to 2000 and are projected to increase further in 2001 and 2002 (Exhibit 1). As for long-term debt, it has been steadily decreasing since 1997, further showing Deutsche Brauerei’s heavy reliance on short-term debt as their main source of financing. The 80-day credit policy given to Ukraine distributors has resulted in large increases in sales and accounts receivables. Exhibit 4 shows a large growth rate in sales and receivables mainly from the Ukraine. In 1998, accounts receivable in the Ukraine were EUR 424,000 and by 2000 have dramatically increased to EUR 6,168,000. In comparison with Germany, the Ukraine accounts receivable has grown at an extremely large rate. This is mainly due to the fact that most of the new Ukrainian sales are on credit. The credit policy gives distributors 80 days to pay, but in reality, in 1999 and 2000, the days in receivables was 85. and 87. 1 respectively. The fact that it is taking such long periods of time to receive cash from sales is forcing Deutsche Brauerei to finance working capital in other ways such as short-term borrowing. The company also holds a large amount of inventory for the Ukraine distributors. This requires extra investment in inventory and that this inventory is held for longer . This results in it taking even longer to receive cash from our investment, thus increasing the already stretched cash conversion cycle. Exhibit 1C shows that Deutsche Brauerei’s inventories have been steady right up until 1999 and have approximately doubled. The large dividend payout ratio has also resulted in the increased use of short term financing. Although the business has substantial profits to pay out these dividends, the cash is already tied up and these payouts have required more short term financing. The business’ 25% plough back ratio is not sufficient for reinvestment, requiring even more future borrowing to pay for capital expenditure. Capital expenditure of EUR 7 million has been forecasted for both 2001 and 2002, requiring even more short-term borrowing. To prevent large cash drainage in the upcoming years, Deutsche Brauerei needs to re-evaluate their debt financing choices. Long-term debt should be considered as an alternative to short term debt. Not only will this decrease the strain on the company’s cash, it will also allow for the investment in a new plant and equipment for 2001 because of the availability of funds. Long term debt can also be used in 2002 as a source of financing for the proposed new warehouse. Since the cost of the warehouse is considerably high (EUR 6. 8 million), it would be unwise to finance it using short term debt, thus, long term debt would be the appropriate choice. Proposed Amendments to 2001 Financial Budget: To produce more accurate predictions for the coming year, there are some amendments that need to be made to Pinchuk’s forecasts and assumptions. Firstly, in Pinchuk’s financial plan, sales growth in Germany and Ukraine were projected to be 3% and 45% respectively. Germany’s growth is believed to be a fair representation but the predicted sales growth for the Ukraine seems to be overestimated. New projects initially have large growths per year but they also decrease rapidly. In 1999, actual sales growth for the Ukraine was 312% but in 2001, Ukraine’s actual sales growth was 47%. Therefore, for the year 2001, it is believed that sales growth should decrease to a figure considerably less than 45%, for example, 30%. Also, the operating margins seem to be optimistically high at 7%. An average of the operating profit margin from the past 4 years is 6. 88%. This is possibly still too high in comparison to Germany and Ukraine’s operating margins of 6. 10% in 2000. Our recommendation is to use 6. 1% again for 2001 because you would not expect operating profit margin to increase if the predicted global recession occurs. We have also changed the dividend payout policy to a recommended 60% as explained earlier in the dividend declaration section. Increasing the credit policy in the Ukraine to 90 days could be seen as a very risky strategy to pursue especially with the current signs of a global financial crisis. Sales would increase in terms of accounts receivable but the company already stands to lose a lot of money if distributors start to default. A financial crisis would cripple the distributors in the Ukraine and they would be forced to default their accounts. It is suggested that the policy should be left at 80 days to prevent that potential loss. It is also suggested that allowance for doubtful debts should be increased from 2% to 6% to account for the potential recession. As mentioned earlier, it would be wise to tighten the policy rather than let it increase to 90 days in 2001. A sensitivity analysis on allowance and net profit was undertaken in Exhibit 2C, the purpose of this analysis is to determine how net profit would change given our assumption for the allowance of doubtful debt. Pinchuk assumed in his projections that the allowance percentage for the year 2001 is going to be 2%. However, it is believed that this is a considerably low percentage and should be increased to 6% to account for the potential recession as mentioned above. Our sensitivity analysis yielded the following results, in 2001 – if the allowance percentage is set at 2%, then net profit would be EUR 3,083,000. On the contrary, if the allowance is set at 6%, net profit will decrease to EUR 2,712,000. We believe that this decrease will account for the potential recession that may strike in 2001. The company is also advised to take on some long-term borrowing as well as reducing their investment in working capital. This will reduce the reliance on short-term borrowing. It is believed that the firm should get a long-term loan of EUR 14 million because under our assumptions, it would reduce short term borrowings to EUR880,000 which is significantly less than the firms forecasted cash of EUR12 million. This would get rid of the firm’s short-term borrowing reliance and greatly enhance the firms liquidity. Exhibit 2D shows a sensitivity analysis of the effect of changing the quantity of long-term debt and the effect dividend policy has on short-term borrowing required in 2001. Keeping the current dividend policy of 75% and under the assumption the firm borrowed EUR 14 million, short-term borrowing would be EUR 1,292,000. Reducing the payout to our recommended ratio of 60% would reduce short-term borrowing to EUR 881,000. Reducing the ratio to below 30% would eliminate the need for short-term borrowing in 2001. Though due to the large quantities of cash the firm has, eliminating short-term debt completely is redundant. Exhibit 1A shows our forecast of Deutsche Brauerei’s income and balance sheet for 2001. We believe that net income for 2001 will be just over EUR 2,712,000 which is about EUR 1 million less than Pinchuk’s forecast. We have incorporated all our suggestions of policy changes including a long-term loan which will help finance the planned capital expenditure for 2001 as well as fix the current cash problem. Recommendations for Deutsche Brauerei Firstly, in regards to a compensation scheme for Oleg Pinchuk, it is recommended that his base salary of EUR 40,000 to EUR 50,000. Also, instead of having his incentive payment be 0. % of sales growth, it is suggested that the incentive payment be 0. 6% of annual growth in profits. This implies that Pinchuk might need to reconsider his marketing and collection strategies. However, it is believed that this would give him the motivation to increase profits every year and this is beneficial to both him and the company. After our analysis on dividend payouts, it is recommended that the company reduce the dividend payout ratio from 75% to 60%. This would enable the company to retain more earnings for future investments and also to cover their short-term borrowings. This also improves their current cash shortage situation. Lastly, it is recommended that several changes be made to Pinchuk’s proposed financial budget for 2001. Instead of a predicted growth rate of 45% for sales in the Ukraine, it is recommended that a more conservative figure of 30% is used. Also, instead of using an operating margin of 7% for both Germany and Ukraine, an operating margin of 6. 10% should be adopted for 2001. In addition, instead of relaxing credit terms from 80 days to 90 days, the company should keep it at 80 days and aim to reduce that in the future. It is also advised that the company take on a long-term loan of EUR 14 million for the building of the warehouse. Lastly, it is recommended that the allowance for doubtful debts be increased from 2% to 6%. These proposed changes take into account the possible recession that may take place in the coming year. Overall, Deutsche Brauerei has been successful in its expansion into the Ukrainian market despite difficult conditions. With slight changes to their current strategies, the company has the potential to achieve even greater success.