As the class used to be popular, there must be certain sum of pupils have joined for this class. Therefore, if Mawar College wants to stop this class, they must put their first precedence to these pupils. As what they expected, pupils will hold dozenss of inquiries and of class they will experience defeated and angry. They could even come out with the request with the hopes that the college could go on running this class before they graduate. Even if the college has decided to stop this class, they besides have to see on where they should put these pupils as they merely halfway analyzing for this class. They have to understand that all these pupils will perfectly experience unhappy and discontent if the college topographic point them in another class that is non every bit celebrated as the class they are analyzing now. This issue could perchance trouble oneself the pupils and could impact their emotions doing them barely to concentrate good on their surveies. ( Olejnik and Holschuh 2007 )
These grudge pupils will besides raise this issue to their parents and once more, their parents will name or even pay a visit to Mawar College to place the grounds and inside informations that halt the class from go oning. However, the college has to retrieve that non every of these parents are understanding and willing to listen the account by direction. As being clients, most of them merely concern on how much they have already paid and where their kids will be placed to. Even some of these parents might reason and dispute with the college direction. When these parents concerns are non being addressed, they might transport out some behaviors which could perchance botch the repute of the college. For illustration, these disgruntled parents will get down distributing their dissatisfaction about the college because of its failure to run into and fulfill their suspense. ( The Associated Press 2010 )
Recapitulating above, the image and repute of Mawar College will be affected and people will get down losing confident to the college. Other pupils might reluctantly register to any classs that run by this college as they worry the same incident might be go oning once more. Even their parents may deter them from analyzing under this college and bespeak them to foster their surveies in another more dependable college. This has clearly showed that their good feeling to the established Mawar College has dashed out and people will barely believe this college any longer. The Mawar College rankings among other colleges can come to a deep autumn and they might confront troubles to derive back their credibleness and once more be competitory advantage among its rivals. ( The Indian Express Limited 2010 )
Besides of impacting the repute of the college, the repute of the well-known University will besides be affected. Peoples around the universe will get down doubting whether the University is holding any jobs that lead to the discontinuing of the class. University will decidedly experience displeasure and will non let any accusal that will act upon its good will. This would surely be a difficult occupation for the college to run any classs under this University in the hereafter since they have break their promises. The University could perchance action the college if the college breaches the contracts. Hence, the college has to bear the hazard of confronting legal suits from the University if they have decided to stop the class. The college might lose immense sum of money for the intent to counterbalance the University because of their behaviors and this would be a loss to Mawar College. ( The Times of India 2010 )
As the college has already employed a big group of full-time lector for this class, therefore every of this lector will be affected excessively if the college discontinue the class. They could be appointed in learning another class and topics or even discharged by the colleges that will decidedly cut down their degree of income. Their motive and enthusiasm in instruction will besides diminish due to their dissatisfaction to the college. This could besides impact the remainder of the college employees and their degree of production will get down diminishing one time they have lost religion to Mawar College. ( Race 1999 )
Other than above, there are still many factors that the college has to recognize and take into history before doing their determination. As the class used to be celebrated, I can presume that certain scholarships and loans have been given to some pupils to foster up their surveies on this class. Therefore, it would be a tough and complicated undertaking that these pupils have to gone through for the cancellation of loans or reassigning their scholarships if this class has to be stopped. Certain welfare organisations such as Genting Malaysia and Hong Leong Group that provide free scholarships to Mawar College on this class will besides experience discontent because it will burthen up their plants when the pupils have more questions respects on their transferring or cancellation of scholarships. ( Sunway University College neodymium ) Peoples that do non understand the ground of why they discontinue the class might besides claim that the lone purpose for the college is to do net incomes and disregard the hereafter of the pupils.
Therefore, all these will problem the college and they barely to last in the market as people and other Universities have lost their dependability to this college. The college might confront jobs when they have to seek and look for other Universities and running their classs because these Universities besides dread the same instance will be go oning once more and affects their reputes. Mawar College will besides confront troubles in using high making lectors due to their spoiled image and have no pick but to use new lectors without much instruction experiences. As they are new, most of them still could non get the hang the talks and issues such as the weakness of pupils in test could perchance happen because they do non cognize the right ways of learning the pupils. When the pupils are unable to demo their accomplishments, once more the repute of the college will be affected. ( BNET nd )
All these clearly show that there are different non fiscal factors that the college has to see and it is pertinent to do a right determination in order to forestall any unanticipated fortunes from go oning that could take them into a deep autumn and barely for them to resile back in the instruction industry.
Part C
Investing assessment methods are act as a tool for be aftering an investing and make up one’s mind whether or non to accept the undertakings. ( Gotze et al 2008 ) There are a few different investing assessment methods can be used, including discounted hard currency flow ( DCF ) , payback, ( Smith 2007 ) and Accounting Rate of Return ( ARR ) whereby DCF includes the methods of Net Present Value ( NPV ) and Internal Rate of Return ( IRR ) . The NPV under DCF has been recognized as the sound of all the investing assessment methods due to its consideration on the clip value of money. This clip value of money refers to the sum of money that the concern demand to be compensated for waiving the usage of the money for a period of clip if it has to be invested in a undertaking. ( Evans et al 2003 )
NPV is a method of including all the hard currency influxs and escapes that will be earned and used in a undertaking at a chosen acceptable rate of return and taking the net sum. ( Evans et al 2003 ) Even though there are many advantages in utilizing NPV, but payback method and ARR are still widely used and adopted by many concerns due to the restrictions brought by NPV and benefits of payback and ARR methods. ( Fabozzi and Peterson 2003 )
The failings that concern usually face when utilizing this NPV attack is they barely to do accurate long-run prognosis of hard currency flows they can have in the hereafter. No company can foretell the hereafter hard currency flows as factors such as future gross revenues, costs of labour, involvement rate, and authorities policies can impact the estimated hard currency flows. Overestimate or underestimate can sometimes convey uncountable loss to the concern. ( Siddiqui and Siddiqui 2005 )
Further, in world it is hard for concern to find the price reduction rate, which is cost of finance or cost of capital. It is non an easy occupation to cipher assorted costs of finance such as portion capital and loans. ( Coombs et al 2005 ) They besides have to take the bank involvement rate, hazard and future rising prices into history when make up one’s minding the cost of capital because the money value of RM1 in the hereafter will be lesser than its today value. ( Bowhill 2008 )
Furthermore, NPV method will presume that the price reduction rate will stay the same throughout the undertaking running periods. But in fact, these price reduction rates are easy swayed from twelvemonth to twelvemonth. Business has to prognosis the future price reduction rate which sometimes might be a large differences compared to their prognosis with the existent state of affairs. ( Groppelli and Nikbakht 2006 )
Besides that, NPV besides non suited to be used in the state of affairs when comparing undertakings with different lives times. ( Siddiqui and Siddiqui 2005 ) They besides have a failing whereby they ne’er take the size or capital invested into history but merely expression at the higher output of NPV. ( Moyer et al 2009 ) This can be shown by the illustration where a undertaking with size RM1 million that output NPV RM1500 will be recommended comparison to other undertaking with capital RM 1000 with a NPV of RM800. ( Coombs 2005 ) Calculation of NPV which is expressed in money signifier is non favourable by most of the companies compared to per centum signifier. ( Fabozzi and Peterson 2003 )
Payback method besides has been called as payout method ( Belkaoui 2001 ) and it refers to the figure of old ages a undertaking or investing will take to pay back the initial hard currency spending. This is merely done when the cumulative hard currency influxs every bit same with the hard currency escapes. ( Bowhill 2008 ) Payback method is still widely used because it offers information respect to the hazard of the investing. Risk analysis can be made depends on the payback period of the investing. ( Moyer et al 2009 ) Risks will be dwindled by utilizing this payback method because it focuses on earlier hard currency flows and non the ulterior hard currency flows which are barely to foretell particularly in this fast gait universe. ( Walker 2009 ) The concern will confront less hazard with the shorter payback period and frailty versa. ( Moyer et al 2009 )
Furthermore, payback method will clearly demo the liquidness of the investing because it measure the net hard currency earned by the investing in shorter term. ( Bowhill 2008 ) For company that ever concern the liquidness of their concerns will decidedly follow this helpful method so they could cognize whether their concerns are in strong or weak liquidness to execute or transport out any programs or activities. ( Moyer et al 2009 )
This simple to utilize and easy to understand method ( Walker 2009 ) can be applied particularly to little undertakings where merely a simple determination is needed without consider other hard currency flow deductions. ( Bowhill 2008 ) There is no complicated computation needed and therefore many companies find it is the best manner to look into whether the money invested can be generated back in sensible period of clip. ( Groppelli and Nikbakht 2006 )
Last but non least, ARR is the mean one-year net incomes divided by the initial investing and it besides known as Tax return on Investment ( ROI ) that used for public presentation assessment. ( Walker 2009 ) The investing will merely be accepted and applied if the ARR was the same or higher than the mark rate set by the company. ( Bowhill 2008 )
This per centum signifier of ARR is easy to calculate and understand particularly to concern people because it sounds familiar as return on capital employed that largely applied by companies. ( Coombs 2005 ) ARR is ever been used due to its consideration on all the returns and whole life of the investing into history. ARR is the lone 1 that is based on the accounting net incomes and concentrate on accounting income instead than hard currency flows. ( Belkaoui 2001 ) The sum and value calculated by ARR besides relevant and used for fiscal statement presentation such as balance sheet. ( Shim and Siegel 2004 )