J Two Essay Example | Topics and Well Written Essays - 500 words

J Two - Essay Example I think that factors such as fixed and variable cost also attributed to the decline in the revenue. 1. Use the Percentage Sales Method and a 25% increase in sales to forecast Micro Chips Consolidated Statement of Operations for the period of September 26, 2008 through September 25, 2009. Assume a 15% tax rate and restructuring costs of 5% of the new sales figure. Sales method percentage will be given by the formula 125/100 * amount for every particular in the Consolidated Statements of Operations (Duchac, et, al 2007). For instance in sales 125/100 * 8,334= $10,417.5. Net income for the year 2008 was given to be $1,570.9 and when this figure is compared to the financial year 2009 which is 1,969.9, it shows a 25% increase in sales to forecast and yet we had a 5% restructuring cost on the new sales. Assumptions made here include all costs remained as a fixed percentage of sales. This assumption is unreasonable since in the normal running of a business, the organization can incur more or less cost than stipulated cost as a fixed percentage of sales (Duchac et al,

The facilities management

The facilities management The late 1980s saw a growing awareness and increased recognition for facilities management both in the public and private sectors. Corporate strategies for competitiveness have caused businesses to relook at all their processes and restructure them in a way that decreases costs and improves efficiency. (Alexander, 1994) Definitions of Facilities Management There are many varying definitions of facilities management. The British Institute of Facilities Management perceives it as the integration of processes within an organisation to maintain and develop the agreed services which support and improve the effectiveness of its primary activities (BIFM, 2010) Price describes facilities management as an integrated approach to operating, maintaining, improving and adapting the buildings and infrastructure of an organisation in order to create an environment that strongly supports the primary objectives of that organisation (Price, 2000; Baldry, 2008) The facilities management movement can be summarized as a belief in potential to improve processes by which workplaces can be managed to inspire people to give of their best, to support their effectiveness and ultimately to make a positive contribution to economic growth and organizational success. (Alexander, 1994) The Role of Facilities Management The role of facilities management is gaining recognition within the economy. Government policies in a market economy, such as competitive policies, deregulation and privatisation, have each had an influence on the growth of facilities management over the years. In the Japanese economy, facilities management is already considered as a key element for economic success. They place a greater importance on office productivity and therefore facilities management is seen as a way of improving the efficiency of office workers in Japan. (Alexander, 1994) Alexander, (1994) says that the role of facilities management should be defined by the relationship of facilities to the core business of an organisation in which success is measured by the degree and quality of support they provide to achieving key business objectives or goals. The role and responsibility of facilities management will vary in different organisations. Selecting the correct role of facilities management is critical to the success and effectiveness of an organisation. Creating a facilities management profile based on a case specific basis should potentially lead to successful facilities management practice. The growing pressures of the competitive business world have made organisations realise that they must gain some form of competitive advantage from every section of their organisation. This must also include the costs of running the working environment. In these organisations, facilities are no longer allocated insignificant time but the strategic role of facilities management is widely recognised as well as the benefits of effective management (Baldry, 2008). In the past businesses were operating within a fairly stable economic environment. However the evolution of technology, cost of space, global competition and the greater impact of making mistakes has forced organisations to manage their resources effectively. This issue has given rise and placed more importance on the concept of facilities management. The biggest challenge facilities managers come across is the management of resources in a rapid and constantly changing environment. (Barrett, 1998) As Alexander (1996), emphasizes, the role that facilities management plays in its contribution to the success of the organisation has gained increasing importance since the start of the facilities management concept. Initially facilities management was managed as an isolated activity and considered as an expense like any other cost within a business. Now facilities management is managed as an integrated activity, with the commercial, manufacturing and marketing function of the organisation. Facilities management has bought to the surface many opportunities to gain a competitive advantage over your competitors. Therefore, it seeks organisational effectiveness to help organisations to allocate their resources in a way that allows them to flourish in the very competitive markets. This has therefore encouraged management and business owners to realise that for organisations to benefit from their huge investment in facilities, they have to manage them actively and creatively, with commitm ent and a broader vision (Amaratunga, 2001) The Centre for Facilities Management (CFM) describes facilities management as the process by which an organisation delivers and sustains a quality working environment and delivers quality support services to meet the organisations objectives at best cost It is accepted that facilities management covers a wide range of services and the success or partial failure of an organisations business is dependent on the management of those services (Chotipanich, 2004). Such services can include property management, financial management, change management, human resources management, health and safety management, in addition to services such as building maintenance, domestic services (cleaning and security) and utilities supplies. The essence of facilities management lies in the ways in which facilities are adjusted to business needs and in the effectiveness of the systems that ensure non-core activities deliver value for money (CFM, 1992). At a national level, the strategic objective of facility management is to provide better infrastructure and logistic support to businesses of all kinds and across all sectors. At a local level, its objective is the effective management of facility resources and services in providing of support to the operations of organisations, their working groups, project teams and individuals (Nutt, 2000). Therefore, according to Nutt (2000), the primary function of facilities management is resource management, at strategic and operational levels of support. McNaughton 2007 says Facilities management provides an opportunity for businesses and large conglomerates to focus on their core business leaving the secondary services of security, mailing and cleaning in the hands of the facilities management experts. If implemented correctly, facilities management can benefit your company in the following ways: Reduced risk and increased productivity Reduced operating costs by focusing on core business structures Encourages and sustains a healthy and safe corporate culture Delivers sustainable resource utilisation Optimise asset utilisation Operational and Strategic Facilities Management Facilities management can be divided into two sections, namely operational facilities management and strategic facilities management. Operational facilities management is the interaction within the facilities department itself (i.e the facilities manager and the various functional units such as maintenance, interior planning, architecture etc). The various functional units can be in house or outsourced. Each functional unit should be aware of current techniques and regulations within their specific area of work. The facilities manger is expected to communicate with the core business regularly to identify current facilities requirements. The facilities manager will then benchmark facilities service currently in practice within the organisation against other facilities management organisations and see where an improvement can be made (Barrett, 1998). It can be said that the primary function of facilities management is the operational side as it is the most visible. The function support s the regular needs of the core business. (Chotipanich, 2004) Strategic facilities management looks at the future. The facilities manager will interact with the core business to establish future changes that might occur to the business due to external factors such as competitors etc. The facilities manager will also identify possible developments within the facilities management arena. Interaction between strategic and operational facilities management must occur and the aim is to synergistically balance current operations with the needs of the future. (Barrett, 1998) The figure above (Barrett, 1995) is a generic facilities management model developed by Barrett. It clearly shows the different relationships and communication lines as well as the difference between operational and strategic facilities management. The separation of the core business and facilities management is clear in the above diagram and this emphasises the fact that facilities management is only beneficial if it supports the primary business objectives. It also distinguishes between the current and future environment and makes it easier to understand how facilities management is conducted. Linkages 1, 2 and 3 are at an operational level and 4, 5 and 6 are at a strategic level. The structure of facilities management is related to the needs, environment and circumstances of the organisation at the time. Its practice and composition are particularly important to the characteristics and contexts of the organisation. (Chotipanich, 2004) Barrett (1998) suggests that facility managers should not just select service items from the standard list at random, but provide only those services that are needed by their particular organisation. Facilities management practice is seen as adapting to its situation. Barrett (1998) also stands by the fact that facilities management practice needs to be personalised to a specific organisation. The facilities managers are involved in strategic planning i.e plans for the future as well as daily operations, particularly in relation to buildings and premises. Responsibilities and duties may vary depending on the type of corporation but the most likely responsibilities include: contract management procurement management maintenance of the grounds and buildings general cleaning of the facility and refuse disposal catering and vending health and safety security utilities and communications infrastructure Facilities management is a very important concept in this competitive business world. If this concept is not managed correctly or neglected, it will be to the detriment of your organisation. In the past businesses were operating in a stable economic environment and as a result the setting of goals were done and not redone for a considerable amount of time. In this current economic state, the goals of organisations often change as the economic environment presents new challenges. The increase in competition, employee expectations and the changes in technology forces businesses to manage their resources effectively to stay profitable. References Baldry, D. (2008), Knowledge management practices in facilities organisations: a case study, Journal of Facilities Management British Institute of Facilities Management (BIFM). (2010), http://www.bifm.org.uk/bifm/about/facilities Accessed 22 March 2010 Alexander, K. (1994), Facilities Management Theory and Practice Alexander, K. (1996), Facilities Management Theory and Practice Amaratunga, R.D.G. (2001), Theory building in facilities management performance measurement: application of some core performance measurement and management principles Centre for Facilities Management (CFM), (1992). An Overview of the FM Industry Part 1 Chotipanich, S. (2004), Positioning facility management, Journal of Facilities. Nuttt, B. (2000), Four competing futures for facility management Journal of Facilities McNaughton (2007), http://www.eprop.co.za/news/article.aspx?idArticle=9211 Accessed 25 April 2010 Barrett, P. (1998), Facilities management. Towards Best Practice. Barrett, P. (1995), Facilities management. Towards Best Practice. Price, I. (2000), FM and Research, Journal of Facilities.

clay Beats Liston: February 25, 1964 :: essays research papers fc

"Clay Beats Liston: February 25, 1964" From the accounts of various Kentucky newspapers, I was able to learn a few facts about Cassius Clay, later known as Muhammad Ali, as well as the attitudes of his fellow Kentuckians. The first thing I noticed in all the newspapers that I viewed was that almost all the articles written about the fight were written by writers from either the Associated Press (AP) or United Press International (UPI). This displayed three things about the Kentucky press, first the belief that Clay's fight was not important enough to cover themselves, secondly that the newspapers probably did not make enough money to send their own reporters down to Miami Beach, and finally the localization of the newspapers' audiences. Another aspect of the fight is the effect it had on Kentucky society, especially the sports scene. I primarily noticed that almost all the papers used reports from the Associated Press and the United Press International, even the (Louisville) Courier-Journal, one of Clay's hometown newspapers, used reports from the Associated Press. The only articles that were not written by a member of the Associated Press were the very rare editorials written about the fight. The use of reports from the AP and the UPI shows that most newspapers did not think the fight was very newsworthy. Only one newspaper published an article that was not written by a member of the Associated Press or the United Press International, however that one article was an editorial about Cassius Clay's new found wealth and not the actual fight. The lack of coverage also proves that even though blacks were supposed to be equal to whites, that in reality achievements by blacks and whites were treated differently. None of the newspapers that I read displayed a large picture or headline proclaiming that Cassius Clay was the new heavyweight champion of the world. Most newspapers had an average sized headline stating that Clay was the new champion, but none had an article about him on the front page. This further illustrates that achievements by blacks were believed to be less important than the achievements of whites. I saw almost the same amount of articles on high school basketball, as I did on the fight. Although I am not surprised by the fact that high school basketball received almost a page of coverage, I am alarmed by the fact that this one page of coverage on basketball was the same amount of coverage for the boxing match. The stories by Associated Press and United Press International illustrate two more facts about Kentucky during the 1960's, primarily that most of

What Are the Main Aims and Objectives of Sentencing Within England and Wales? Should Any One Theory Dominate?

What are the main aims and objectives of sentencing within England and Wales? Should any one theory dominate? What are the main aims and objectives of sentencing within England and Wales? Should any one theory dominate? In the criminal justice system, there are many different sentences that can be given to an offender. According to the sentencing statistics in England and Wales (2009) the highest sentence being given is financial penalties with 67. 3% of convicted offenders being given a fine, 14% received community service and 7. 2% of offenders were sentenced to prison.The type and length of a sentence largely depends upon the seriousness of the committed offence and the offender behind it. This essay will look at the main aims and objectives of sentencing, as well as the different theories used within sentencing. Within this essay the question of whether or not a sentence should aim to prevent further crimes or punish offenders as they deserve, will too be discussed. A further fac tor of this essay will look at influential factors within sentencing and the complications that would arise if the system was to be dominated by one theory.To conclude it has been found that one theory simply cannot dominate sentencing within England and Wales as the majority of sentences are tailored around each individual offence and offender, therefore there cannot be a set sentence for a set crime. According to the Criminal Justice Act (2003) there are five main purposes of sentencing an offender. The first is to punish the offender; also known as denunciation. This is the acknowledgement that the behaviour of the offender is not acceptable within society and ensures a consequent punishment.This can be seen as a form of paying back the wrong doing or understanding of what is right and wrong. However Ashworth (2005) arises the underlying question on how this does so and why punishment is seen as an appropriate response to criminal behaviour. The second is to reduce crime this inc ludes its reduction by deterrence. Ashworth (1999) claimed that deterrence aimed to prevent crime by future offenders and the offender in question, by not committing an offence due to fearing the consequent punishment.This can take the form of individual or general deterrence. The next purpose of sentencing is to reform and rehabilitate the offender, this is achieved through many different methods such as; counseling or group therapy. The purpose of this is to change the offenders’ attitudes and behaviours so they desist from crime. (Ashworth 1999) Rehabilitation may also address prior reasons as to why the offender may of committed the offence in the first place and teach the offender to deal with these in an acceptable way.The fourth aim of sentencing is to protect the public from both the offender and further crimes. This is known as incapacitation, the idea of removing the ability from the offender to commit a crime for a length of time, for example; being in prison or un der house arrest. Finally the last purpose of sentencing is for the offender to make amends to the persons affected by their actions. This idea can also be known as restorative. This aims to give an appropriate sentence to the offender, whilst ensuring a balance with the appeasement of the victim.This can be in the form of the offender having to give some sort of financial compensation to the victim or affected persons. When deciding on an appropriate sentence for an offender there are two main theories that dominate. These theories individually question whether or not it is best to punish the offender or treat the offender. Retributivism is the first, otherwise known as backward looking, and secondly is Reductivism, know as forward looking. Retributivism is the idea that an offenders’ punishment should fit the crime that was committed.Otherwise referred to as ‘an eye for an eye’ approach. Proportionality is the essence of the retributivist theory. Von Hirsch (19 81) quoted that ‘the severity of the punishment should be commensurate with the seriousness of the wrong’ he also stated that there were two types of proportionality. The first being Ordinal, this is how offences are ranked in accordance to their seriousness, and the offence ranked at the top will in turn receive the highest punishment. The second type of proportionality is Cardinal, this is how punishments are ranked in accordance to seriousness.This idea has set sentences for set crimes therefore ignoring the offenders circumstances. Reductivism aims to prevent future offences with the main aim of creating the greatest happiness for the greatest number. Reductivism consists of three main ideas; deterrence, rehabilitation and incapacitation. Ashworth (1998. 44) quoted that; ‘Deterrence seeks to further the aim of crime prevention by setting the sentence so that it is sufficient to deter the convicted offender. ’ This idea is known as individual deterrence, general eterrence differs from this, as instead of focusing on preventing the offender in question from offending again, general deterrence focuses on preventing potential offenders from committing a crime due to them being fearful of the crimes consequential punishment. Incapacitation is the idea of preventing an offender from committing a future crime by making it impossible for them to do so. For example; being in prison prevents the offender from being able to commit another crime.This idea is used for offenders who are not deemed as ‘curable’. This goes against the retributivist idea that punishments should follow a committed offence by punishing a person in order to prevent an offence. The third aim of reductivism, is rehabilitation. This is the idea that the offenders behaviours can be altered through methods such as cognitive behavioural therapy and family intervention. Rehabilitation in practise can be seen in the case of Venables and Thompson.The Times report ed that ‘One of the most comprehensive care plans was drawn up for young offenders by the Department of Health which aimed to rehabilitate the boys and prevent them becoming institutionalised’. This plan included rehabilitation techniques such as counselling and learning techniques to control their behaviour. As both young offenders were released just 8 years after the murder this would prove the technique some what successful. However this can not be generalised to adult offenders.An important factor that influences sentencing in England and Wales is the offenders’ age. In 2009 5. 8% of offences were committed by under 18s. (Sentencing Statistics). According to Gordon (1999. 92-93) when sentencing a juvenile the courts aims of the sentence should also take the following into account; whether or not the juvenile is young and possibly immature, if they are socially or educationally disadvantaged and finally, if they are at a critical stage in their personal develo pment.When sentencing a juvenile both theories are applied however in some cases the reductivist approach seems to dominate. The Detention and Training order is the main custodial sentence for offenders ages 12-17, this aims to split the sentence to include both a custodial part and part served under the supervision in a community, with the primary concern on rehabilitating the offender therefore being dominated by the reductivist approach.After discussing the aims and objectives of sentencing and the theories based on the aims, it is clear that one theory simply cannot dominant sentences as there are too many influential factors, and one theory working could not be generalised to work on all offenders due to the level of differences between offenders and offences. Some influential factors include; previous convictions, whether or not the offender shows any remorse, the plea and various others. Furthermore to this, a system would not work based on one theory.For example if the syste m was based on deterrence, the courts would need information on each individuals circumstances and character in order to sentence accordingly, persistent offenders would have increased punishments therefore meaning the sentencing system would have no consistency as each sentence would be based on the offender in question. (Ashworth 1998. 45). In Conclusion, after reviewing the two main theories of sentencing in terms of the main aims objectives set by the Criminal Justice Act, it is clear that each one takes some of the aims and objectives into account.However neither has a proposed way of dealing with offenders that addresses all the aims and objectives. Before it is possible for one theory of sentencing to be established as a dominant theory, the question of; whether or not sentencing should primarily punish or treat the offender needs to be answered. However there cannot be a general answer to this, as it will always be a debateable topic, as each sentence depends on each individ ual offender and the individual offence, therefore making a categorisation of whether or not specific crimes should be treated based on the retributivism theory or the reductivism theory cannot be done.A combination of both theories, aiming to punish and treat the offender in order to prevent further offences would seem the best solution, however in some cases this would not be the best solution. BIBLIOGRAPHY Ashworth A, Von Hirsch A, 2005,Proportionate Sentencing, Exploring the principles , Oxford, Oxford University Press Ashworth A, Von Hirsch A, 1998, Principled Sentencing, Readings on Theory and Policy, Hart Publishing Cavadino M, Dignan J, 2006, Penal Systems, A comparative Approach London, Sage Publications Criminal Justice Act 2003Gordan W, Cuddy P, Black J, 1999, Introduction to Youth Justice, Incorporating Introduction to the Youth Court, Winchester, Waterside Press Gross H, Von Hirsch A, 1981 , Sentencing , Oxford, Oxford University Press http://www. justice. gov. uk/sente ncingannual. htm (Sentencing Statistics England and Wales 2009) http://www. timesonline. co. uk/tol/news/uk/crime/article7054623. ece

Netflix Case Analysis

Case Analysis: Netflix. com, Inc k JAVK Consulting Company 6/14/2011 600 Civic Center Dr Detroit, MI 48226 Dear Mr. Hastings, Our company JAVK Consulting has examined the Netflix customer model and looked into the company’s five year financial future. We have analyzed Netflix with a scope of entering a rocky internet based company marketplace and seeing success in the future. The company currently is pumping lots of money into marketing strategy in order to growth their customer base and is in turn facing financial troubles while they approach their initial public offering stage.As you read through our analysis of Netflix you will find our company’s thought on your financial performance so far, look into a subscriber model and correlated cash flows, and develop an idea of financing solutions to manage growth. While more users are using mainstream technology such as DVD players, video game consoles, laptops, combined along with high-speed internet the creates a growing e nvironment for a consumers wanting entertainment at their joysticks and fingertips. Our aspiration is for Netflix to have a successful run at an IPO if chosen and manage their customer growth along the way for long term success.Thank you for the chance to help your business thrive. We hope you agree with our financial outlook of Netflix and make a decision that catapults your company into financial success. Sincerely, JAVK Consulting Group Problem Statement: Based on Initial discussion and evaluation, we understand that the launch of Initial Public Offering (IPO) is critical and needs to be evaluated if the company should go forward with the offering, as a result of number of internet companies have been forced to withdraw their IPOs due to market down turn.Secondly the need to show positive cash flows within a twelve month horizon in order to have a successful offering. Third to suggest modifications that would improve the company’s projected cash flows given the fact that t he revenues were doubling every six months. One of the most critical points of success for Netflix depended on the company’s ability to manage and sustain their triple-digit growth into the foreseeable future. Analysis: Technology is continuously facing rapid change which gives a company such as Netflix an exclusive opportunity for a first mover advantage in a new market.The Netflix product is one that can ship easily and cost effectively or be received directly to internet connections worldwide. The definite increase in internet and console users is creating a consumer demand for entertainment that Netflix can fill. This versatile product paired with emerging technology has led to rapid growth for the Netflix Company. The basic elements of Netflix core products give them an advantage over brick and mortar stores such as Blockbuster as Netflix offers a more personalized movie experience, the same new titles, all along with no time restrictions or late fees.As part of this lon g term objective Netflix’s goal is to grow its customer base and retain users of free trial software. The goal of the free software is to have a positive acquisition rate of free trial users after a month of free service and retain them into the long run future. After retention, the goal of Netflix is to withhold those customers into the long term future by tailoring the Netflix product in a unique way to each customer. Netflix does this by adapting their website interactions for each customer based off of their viewing history and preferences using a unique personal movie finder service.By offering this personalized service video users can find movies they would enjoy and possibly use the Netflix mail service. Theoretically speaking, Netflix performance to date has been positive (although the company has been incurring loss year over year) considering the high operating expenses for the initial years of a new business is common as most businesses make it or break it in their first 2-3 years which seems to be a normal trend considering this industry where the fixed assets increase year over year and the revenue generated on the fixed assets could drastically diminish based on user preference.Netflix has an extremely high growth rate for their revenues as they are doubling every six months. While revenues are doubling in the last year sales and marketing expenses have gone up more than three times. The main objective now is to make sure that after an initial public offering Netflix will continue to create positive cash flows. We believe that Netflix has chosen the subscriber model to forecast its cash flow requirements because it is the most precise representation of how the company receives cash on a monthly basis.Netflix at its core is in the movie rental industry, the only cash inflows received are from subscribers that pay monthly subscription fees. The basic elements of the subscriber model are monthly subscribers, subscription fees, and movie usage including movies rented and shipping costs. Based on these elements costs and revenues can be narrowed down and correlated to individual aspects of the model and accurate cash flows can be formed in order to predict future profitability. The subscriber model is fitting for Netflix for these reasons as subscribers are essentially their only cash inflows.Exhibit A, illustrates the subscribe model premise. In our analysis, we used the subscriber model to forecast future cash flows. This allows us to see potential revenues month to month based on the initial subscriber rate and percentage, while incorporating the cost to your company for each additional subscriber. We have forecasted potential cash flows as well as revenues for the next five years (Exhibit D & Exhibit E). This gives us an idea of where we are going and how we will get there. Currently it costs your company $106. 58(Exhibit B) for the first month of a free trial customer.This cost is offset by paid subscribers and can b e considered a marketing expense. Every month each paid subscriber earns you on average $5. 82 (Exhibit B) in revenue. Netflix should continue trying to obtain new subscribers since there is a positive cash inflow for those customers after a weighted average is formed. Based on the weighted average of customers who stay with Netflix and those that leave there is a positive NPV based on the retention percentages. There are three basic types of customers for Netflix, one month trail exiting users, six month exiting users, and over five year users.Based off the retention ratios after one month 70% of customers from the free trail stay with Netflix, after that first month 42% of the original 70% stay for six months and 28% stay longer than six months (we have assumed it to be of at least 5 years and above). If a customer leaves after one month of free service your company would suffer a loss of $19. 26 (Exhibit B) given the fact that the initial purchase ($98. 28) of DVD(s) can be reuse d ($88. 45) for the other new subscribers by purchasing an incremental of 2 DVD(s) which move to the back catalogue as they become obsolete.Netflix can convert and retain those customers for six months they generate $1. 21(Exhibit B) of cash inflow for each customer. If the cash flow from acquiring new subscribers was negative we would advise your company to take an alternate route for generating cash flows. If your company continues with current business, retaining 28% of initial customers at least 5 years and above, the net present value of your corporation will be $65,851,642 (Exhibit E) based on certain assumption listed in Exhibit E.This NPV of your company after 5 years is based on the weighted average NPV percentages that we determined for each of the three customer categories; one month subscribers, six month subscribers and five year subscribers. Over sixty five million as a NPV is a glamorous number to project but it requires your company to retain the current customer ret ention ratios over the three timeline increments (Exhibit C). If these retention ratios are held strong then we have determined the weighted NPV per subscriber would be $34. 34 (Exhibit C).While this number is far from over sixty five million dollars over the five year time retention span it grows to be exactly that. Conclusion/Recommendation: Based on our analysis we have come up with some solutions to improve your overall cash flows and strengthen the financial health of your company. These solutions are not far from the product that Netflix currently offers so making the changes would not place a large burden on costs. Also, the changes will offer a more customer focused and interactive experience with the Netflix product.Initially your first goal should be to increase the retention rate of potential new trial subscribers. Given that internet users are increasing year over year, we recommend that your company consider online video streaming (video on demand) which will be an out of the box approach. Using the online media streaming can help your company to cut down on sales and advertising cost. Secondly with introduction of online streaming reduce the membership fees to 75% of the current rates which will help you increase customer retention rates.Third, promote revenue sharing which can help increase you marketing base while cutting your expenses. Forth is to promote referral bonus (can vary based on number of referrals provided) which can help you boost your sales through you existing customer base and in return reduce your operational expenses. Lastly to reduce the trial period to 2 weeks (if done by Mail only) and this will result in increase of NPV of Netflix by $25. 8 million (increase of NPV/subscriber from 34. 34 to 44. 10). Netflix is becoming even more personalized and may cut undesired costs such as unnecessary shipping costs.By doing this you will increase your profitability and decrease your cost to acquire a new customer. Another recommendati on is to continue to encourage all online subscribers to rate films. This will encourage other subscribers to rent more movies and help with the automatic marquee queue available to online subscribers. By encouraging this interactive use with the Netflix website the company will have an idea of which DVD’s to spend money purchasing and will be able to keep an updated DVD library that meets the growing demand of new subscribers.To conclude, your company should delay the IPO until the economic condition improves and use this additional time to evaluate some of our recommendation to attain positive cash flows which can play in your favor. Appendix: Exhibit A – Subscriber Model Premises| Cost/New DVD| $ 17. 55 | Shipping Cost/DVD| $ 1. 00 | Number of DVD Initial Marque Queue| $ 4. 00 | Number of DVD Shipped /Month| $ 4. 30 | New DVD 1st Month| $ 5. 60 | Number of new DVD(s) subsequent Month| $ 0. 56 | Revenue /Month| $ 19. 95 | Free trial| $ 1. 00 |Discount Rate| 20%| Exhi bit B -New Subscriber Model| | Free| Paid| Paid| Paid| Paid| Paid| Paid| Paid| Paid| Paid| Paid| Paid|   | M1| M2| M3| M4| M5| M6| M7| M8| M9| M10| M11| M12| Revenue|   | $19. 95 | $19. 95 | $19. 95 | $19. 95 | $19. 95 | $19. 95 | $19. 95 | $19. 95 | $19. 95 | $19. 95 | $19. 95 | Cost of DVD/ initial (one time)| $ (98. 28)|   |   |   |   |   |   |   |   |   |   |   | Cost of DVD/ releases|   | $ (9. 83)| $ (9. 83)| $ (9. 83)| $ (9. 83)| $ (9. 83)| $ (9. 83)| $ (9. 83)| $ (9. 83)| $ (9. 83)| $ (9. 83)| $ (9. 83)| Shipping initial DVD's| $ (4. 0)|   |   |   |   |   |   |   |   |   |   |   | Shipping new DVD's| $ (4. 30)| $ (4. 30)| $ (4. 30)| $ (4. 30)| $ (4. 30)| $ (4. 30)| $ (4. 30)| $ (4. 30)| $ (4. 30)| $ (4. 30)| $ (4. 30)| $ (4. 30)| Net Revenue| $(106. 58)| $ 5. 82 | $ 5. 82 | $ 5. 82 | $ 5. 82 | $ 5. 82 | $ 5. 82 | $ 5. 82 | $ 5. 82 | $ 5. 82 | $ 5. 82 | $ 5. 82 | Exhibit C – Calculation of Net Present Value per new subs criber|   | *assumes that if a subscriber stays with Netflix longer than 6 months will stay 5 years| Subscribers | 1 Mon| 6 Mon| 5 Yrs. *|   | Probability| 30%| 42%| 28%|   |Weighted NPV per Subscriber| ($19. 26)| $1. 21 | $141. 46 | $34. 34 |   |   |   |   |   | C1| $ (106. 58)| $ (106. 58)| $ (106. 58)|   | C2| $ 88. 45 | $ 5. 82 | $ 5. 82 |   | C3|   | $ 5. 82 | $ 5. 82 |   | C4|   | $ 5. 82 | $ 5. 82 |   | C5|   | $ 5. 82 | $ 5. 82 |   | C6|   | $ 5. 82 | $ 5. 82 |   | C7|   | $ 88. 45 | $ 5. 82 |   | †¦|   |   | †¦ |   | C8|   |   | $ 5. 82 |   | C60|   |   | $ 5. 82 |   | C61|   |   | $ 88. 45 |   | CF By Month|   |   |   |   |Exhibit D – Projection of new subscribers 2000| |   | Revenue Growth rate 1998 –> 1999 | 274%| Existing subscribers| 110,724 | New Subscribers paid status| 303,231 | 30% free| 90,969 | New Subscribers 2000| 394,201 | Exhibit E – Value of Netflix|    | 2000| 2001| 2002| 2003| 2004|   | | | | | |   | NPV per Subscriber| $34. 34 |   |   |   |   |   | Discounted Rate| 20%|   |   |   |   |   | Growth rate per new subscriber|   |   | 49%| 49%| 49%| 49%|   | | | | | |   | Existing subscribers| | 110,724 |   |   |   |   | Value of existing subscribers| | 3,802,273 |   |   |   |   |   | |   |   |   |   |   |New Subscribers| | 394,201 | 587,359 | 875,165 | 1,303,995 | 1,942,953 | Value of new subscribers| | 13,536,829 | 20,169,875 | 30,053,114 | 44,779,140 | 66,720,918 |   | |   |   |   |   |   | Total subscriber value|   | 17,339,102 | 20,169,875 | 30,053,114 | 44,779,140 | 66,720,918 |   | |   |   |   |   |   | Product development| | 7,413,000 | 7,413,000 | 7,413,000 | 7,413,000 | 7,413,000 | General and administrative| | 2,085,000 | 2,085,000 | 2,085,000 | 2,085,000 | 2,085,000 | Total Cost|   | 9,498,000 | 9,498,000 | 9,498,000 | 9,498,000 | 9,498 ,000 |   | |   |   |   |   |   |Total Subscriber value minus cost|   | 7,841,102 | 10,671,875 | 20,555,114 | 35,281,140 | 57,222,918 | NPV of Netflix|   | 65,851,642 |   |   |   |   | Assumptions:| Existing customers pay 19. 95 per month (same as new customers)| Additional cost projected at the same level as 1999NPV of Netflix only includes cash inflow and outflows and have not considered any liquidation value|