The 7 Form of Propositional Essay

The 7 Form of Propositional EssayBeing able to write a good persuasive essay is one of the biggest challenges in college writing. This is because students have so many choices of material to use that they do not know which ways of writing are most effective. It is especially challenging for non-native English speakers, who need to determine how to use the written word effectively. Writing a persuasive essay is a skill that must be learned and mastered.One of the most common ways to learn how to write a persuasive essay is by using samples. These samples will help you learn how to write better persuasive essays that appeal to your audience. Sample persuasive essays can be used to help you write persuasive essays and to help you decide which method of writing is best. In this way, you can get a feel for what it takes to successfully write a persuasive essay.The most basic form of persuasive essay is called the personal essay. This is one where you tell a story about yourself or about a particular situation you had. You might be writing about a college experience, a specific holiday event, or a personal accomplishment. Most often, personal essays deal with something you are good at, something you enjoy, or something that will make readers relate to you.The third form of persuasive essay is the argumentative essay. In this type of essay, you present one idea or statement that is backed up by proof or evidence. It should then provide a counter argument for the opposing argument. In order to be successful in an argumentative essay, you must present your arguments in a convincing manner.The fourth form of persuasive essay is the analytic essay. In this type of essay, you present a logical argument for the position you are taking. You must make sure that the argument you present will persuade readers to agree with your position. You must be able to draw their attention to the reasons why your position is correct.The fifth form of persuasive essay is the critical essay. In this essay, you give a comprehensive explanation for the reasons why your position is correct. You must show why your position is correct by presenting all the facts and proofs that support your claims.The sixth form of persuasive essay is the interpretive essay. In this essay, you present three views of an issue. You must then determine which view is right and that view is wrong.Finally, the seventh form of persuasive essay is the historical essay. In this essay, you must present three perspectives on a certain historical event and weigh the relative merits of each one of them.

Arundel case study free essay sample

After a thorough investigation into the venture you are considering, we have the following data and analysis for your review. In order for you to make a more informed decision, we have also provided recommendations for this endeavor based off our findings. Throughout the entirety of this report, we have taken many different approaches to better survey this idea so you can make a more informed decision. We have formatted this formal report to be easy to understand, as well as, comprehensive. Analysis Methods Net Present Value Decision Tree Analysis Black-Scholes Model We used the above methods to determine the appropriate value of the option for the sequel rights under each scenario. This value can be looked at as the maximum price to pay, given that it is the highest value you can expect to earn. If the agreed upon per-film price exceeded the derived values, you will be out-of-the-money. Conclusion After carrying out each valuation approach, we found maximum price to pay per film was around the same under each method. We will write a custom essay sample on Arundel case study or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Method Maximum Per-Film Price (in millions) Net Present Value $4. 88 Decision Tree Analysis $4. 896 Black-Scholes Model $4. 56 We recommend not paying above $4. 56 million per film as given by the Black-Scholes model. This figure is the most conservative value we found throughout our real options analysis. Problem Statement The investment group, Arundel Partners, is seeking to create an innovative business where the ability to create and produce movie sequels is transformed into an option market. This will be achieved in two ways: buying the sequel rights to a film prior to the first movie being released, and purchasing an entire portfolio of films from major movie companies to achieve information symmetry. It is imperative that Arundel agrees on the sequel rights price prior to any movie being created. If they waited, the various production studios would have more information on hand about the possible success or failure of each film, causing the negotiated price to fluctuate unfairly. With the sequel rights and complete movie revenue data, Arundel can decide which movies will contribute to a profitable sequel and which will not. Successfully forming this business brings a number of problems to the surface. Arundel Partners must figure out how much money they should spend on each film in order to make a profit. In determining this figure, hypothesized sequel revenues are estimated based on the first film data. This is risky because they are just projected revenues, but they are being used to make multi-million dollar business decisions. Analysis of the Problem Net Present Value We set out to determine the Net Present Value per film for the hypothetical sequels. This figure could be viewed as the revenue (in millions) Arundel could expect to receive from the sequel of each of the 99 films purchased. It is important to note that they would not create a sequel for every movie; they would only create a sequel if it were profitable to do so. Exhibit 7 shows the expected present values and one-year holding period returns. First, we discounted the hypothetical sequel net inflows back to year three to match the period of the hypothetical sequel negative cost. We used an effective annual rate of 12. 36% to discount, derived from the given 6% semi-annual discount rate. Then we subtracted the year three negative costs from the year three net inflows, leaving us with the NPV in year three. There were 26 films with a positive NPV, which are shown in Table 1 of the Appendix. We then discounted the year three NPV back to year zero, when Arundel would be purchasing the portfolio of movies. This gave us a total NPV of $483. 2 million, which we divided by 99 (the total number of films being purchased) to find a NPV per film of $4. 88 million. Although this value is only made up of 26 films, they will be purchasing all 99 sequel rights. Using the Net Present Value analysis, Arundel should not pay more than $4. 88 million for each movie. Additionally, if they pay the suggested studio price of $2 million per film, they would make an estimated $2. 88 million per film—a very profitable venture. Decision Tree Analysis We also used the binomial model to construct a decision tree to find the max value Arundel should pay for the sequel rights per movie. Using this method, the highest value they should pay is $4. 896 million. To set up the tree, we used the average net inflow of hypothetical sequels in year 4 (taken from Exhibit 7) of $21. 60 million and discounted it back to year 0 (1989) when the films were released. We discounted using 12. 36% again, the effective annual rate derived from the given 6% semi-annual discount rate. This gives us a value of $13. 53 million to start the net inflow tree (Appendix: Table 3). For our time variable, we are using 12 periods symbolizing the 12 months between the distribution of the first movie and the hypothetical sequel. We used a standard deviation of 1. 21, taken from the one-year return of the hypothetical sequel in Exhibit 7. We then found the U and D values to construct a 12 period binomial tree. 1 After creating this tree, we worked backwards to create a new tree illustrating the payoffs in each state to find the per film option price. We took the negative cost for the hypothetical sequel and discounted it back to year 2, the time that Arundel could decide to exercise the right to produce the sequel. We discounted it using the average 10-year risk free rate in 1992 (7. 03%). This cost is $21. 12. By subtracting the cost at exercise (effectively the strike price) from the present value of the net inflow at year 0, we determine the payoffs. 2 We continue to move backwards throughout the tree using risk neutral valuation (Table 4). Black-Scholes Model Additionally, we ran the Black-Scholes model to determine the price of the sequel options. We used $13. 55 as the present value of cash flows, taken from the average net inflows from year four and discounted back to year zero. This will symbolize the variable S in our real option analysis. The next variable, X, which is the cost of the project can be taken from of Exhibit 7. Since it is the investment, it is a fixed variable and does not need to be discounted, so the value of $22. 6 is used as the variable X. The volatility (? ) is also derived from Exhibit 7, as the standard deviation of the one-year return. We are using a time period of 1 year (T=1), which is the window of time the option can be exercised. We used the same risk free rate as in the binomial model of 7. 03%. Based off these variables, we ran the Black-Scholes model yielding a result of $4. 56 million per film. This is the fair price at which the studio should be willing to purchase the rights to a sequel of a film. Sensitivity Analysis Our scenario analysis (Table 5) reveals the effect that the risk free rate and the volatility have on the price of the call option of the sequels. By isolating the risk free rate we can see that a 10% increase in volatility leads to a $0. 5 million jump in the call price. However, when isolating the volatility, a 1% increase in the risk free rate leads to a $0. 03 million jump in the call price. Finally, our scenario analysis tells us that when valuing the call option one has to be aware of the impact of the risk free rate and volatility. Potential Problems Feasible Solutions Working with major movie studios, there are a number of problems Arundel faces in attempt to maintain positive relationships: It could be challenging to agree upon a payment structure due to conflicting interest amongst the studios and Arundel. When drafting the contract, a provision should be included regarding the payment structure. If the movie rights no longer belong to the movie studios they may put forth a lack-luster effort, because the financial success of this movie is no longer beneficial to them, creating a principal-agent problem. To avoid this problem, Arundel could add a bonus incentive paid to high grossing films. As stated earlier, the possibility of creating asymmetric information is a huge problem to Arundel. The longer they wait to buy the sequel rights, the more the production studio knows about the prospective success of this original movie. As they see interest grow for a particular movie, it may cause the studio to raise the price for the sequel rights. This would significantly affect Arundel returns. To combat this issue, it is imperative that Arundel buy these rights as early as possible to prevent the studios from having a means to charge higher prices. Recommendations We have determined that Arundel should not purchase the portfolio of sequel rights if it is more than $4. 56 million per film. Technically, the price could be as high as $4. 89 million, given by the binomial model; however, we will err on the side of caution to ensure the highest return possible. Paying any amount higher would cause Arundel to lose money on these options. The suggested studio price of $2 million per film should definitely be taken, allowing a profit of almost $3 million per film. Summary and Closing In closing, Arundel Partners can be a very successful and profitable firm. After carrying out the Net Present Value, Binomial Tree Model, and Black-Scholes Model, they can estimate making $4. 88, $4. 89, and $4. 56 million per film, respectively. This data gives them a minimum of $451. 44 million in revenue from the portfolio of 99 movies. If the suggested studio price of $2 million per film were agreed upon, the cost for the portfolio would only be $198 million, leaving $253. 44 million in profit. As long as Arundel agrees upon a price before any production of the first film begins, coincide on an appropriate pay structure, and add a premium to high grossing movies, they should avoid any problems with the movie production companies. All in all, Arundel Partners can expect to earn very high returns on their investments in the innovative movie sequel option market. Appendix Table 1 Net Present Value Calculation Studio/Movie Title PV of Net Inflows at Year 4a PV of Negative Cost at Year 3 One-Year Return NPV year 3 NPV year 0 MCA UNIVERSAL 1 Parenthood $76