This document discusses various methods for analyzing investments and projects, including present worth analysis, annual equivalence analysis, and payback screening. Present worth analysis compares the present value of loan cash flows to project cash flows. Annual equivalence analysis calculates annual and unit costs to compare alternatives over their lifetimes. Payback screening determines how long it takes for a company to recover its initial investment in a project by adding expected annual cash flows. The document provides details on each method and how they can be applied to decisions around capital investments.

1. Wilder 1
Wilder 7
Personal Motivation: Parenting
Contemplating the number of babies born in the world each
day is not a thought most would find important or relevant.
The fact is, approximately 255 babies are born every minute, at
any given place in the world; that’s 4.3 births every
second.[footnoteRef:1] The initial reaction to the
aforementioned information may be provoke one to think ‘What
is the point? And what does it have to do with motivation?’
First, consider reproduction and procreation as a foundation of
continuity, then the goal of reproduction could be thought of as
the beginning of evolution, not in the context of science, but in
the context of family and generations. Procreation may be the
foundation of evolution; however, survival in a competitive
world, maintains the process of evolution. In the beginning of
the world, survival was based on animal instincts, kill or be
killed. An analogy here would be that motivation was driven by
hunger. All species reproduce, but not all species were capable
of survival. In ancient history, mankind did not rule the earth
until humans evolved and changed body structure from that of
an ape like appearance to that of modern man. The evolution of
man led to the concept of man as the most intelligent animal in
existence. Motivated by a need to survive, modern man began to
use mental instincts as a means of survival and learned how to
create tools, build fires, hunt for food and create clothing;
behavior that led to the creation of groups that were socially
and culturally adept (BBC).[footnoteRef:2] Before
industrialization and technology as it is today, survival and
obtaining needed resources was simply a matter of hunting and
storing. Those with the most resources were considered the
wealthy ones, and maintaining that status could not have been
possible without the offspring carrying on the family crest. This

2. may have been a natural process from generation to generation,
motivated by the desire to maintain a status. Motivation creates
action based on an individual's desire to fulfill specific needs.
In clinical terms, the defining nature of motivation are
psychological forces that arouseinterest and directsattention that
leads to behavior that is persistent based on the desire of
achieving specific goals (Marlene). Across all cultures, parents
desire successful futures of children. However, wanting children
to succeed does not, in and of itself, guarantee children will be
motivated toward success as a rule. Many factors increase
future success of children including, but not inclusive of,
educational endeavors, intrinsic/extrinsic motivation, self-
perception and competence. This is not to say that successful
outcomes in life of all children is dependent on parental
influence of children’s personal motivation, however studies
have shown that parenting style plays a vital role in successful
growth and development of children and are one of the most
influencing factor in the development of social competence
during early childhood (Steinberg, Bomstein and
Vandell).[footnoteRef:3] Parents are the primary source of
influence that motivate behavior in children, therefore, it is the
responsibility of parents to prepare children to meet the
challenges of success by motivating behavior that enhance
cognitive abilities, increase personal motivation, and obtain
academic achievement. [1: The average annual number of births
during a year per 1,000 persons in the population at midyear;
also known as crude birth rate. This and related population
statistics can be found at
http://www.indexmundi.com/world/birth_rate.html
] [2: . As a behaviorally, socially and culturally diverse
species, humans have developed art and complex languages. As
a species humans cannot survive without tools. They are the
only known species to build fires, cook food and clothe
themselves. http://www.bbc.co.uk/nature/life/Human
] [3: Study conducted by Diana Baumrind in 1967 and 1971
observed the impact of parenting styles on social competence

3. development.]
Motivation is a goal orientated action producer. Motivation
can influence positive or negative behavior which may be
dependent on the source of motivation, and attitude and
experience, as well. For example, a child who experiences joy,
satisfaction, and a sense of safety, resulting from positive
feedback and interaction with parents, may be motivated to
behave in a manner that elicits similar emotions of the
experience. On the other hand, a child who experiences fear or
lacks the need of affection or physical contact by parents or
parent, may be motivated toward avoidance and isolation. This
may create behaviors that are negative and not conducive of
healthy prosocial behavior. In hindsight, personal motivation of
children may be influenced by the emotional response between
parent and child during interacting. This in turn may be linked
to the parent’s style of parenting. Guiding children toward
success, and reaching life goals, begins in infancy and continues
throughout childhood and adolescence. It is during growth and
development in infancy, early childhood, and adolescence that
parents are more influencing in how children behave (Steinberg,
Bomstein and Vandell). Parenting is critical to the behavior of
children and the behavior of parents is critical to motivation of
children.
Personal motivation is not an inborn trait, however there are
some personality traits, both biological and learned, that
influence the development of personal motivation. Learned
behaviors that promote personal motivation are behaviors that
reflect parenting effectiveness. One critical role in the
development of personal motivation is socialization. During
early childhood, the experiences of children outside the home
environment can influence positive of development of
socialization (Gasior). Parenting and the socialization of
children observe the behavior of which children learn to
recognize and understand expectations of parents through the
guidance of parents. For example, introducing a child to books

4. by taking the child on weekly visits to the library and reading to
the child encourages the idea that reading is important. Thus
the parent is motivating the child to want to learn to read and
eventually realize the value of reading in learning and in life
experiences. Effective development of social competence
results in children who are independent, socially responsible,
empowered, and achievement oriented (Steinberg, Bomstein and
Vandell).[footnoteRef:4] [4: According to Baumrind “competent
child can be described as possessing independence, social
responsibility, vigor, and achievement orientation, which is the
drive to seek intellectual challenges and solve problems
efficiently and with persistence.” ]
Although research studies have shown that culture, family
background, and parenting styles are major factors that
influence personal motivation toward academic achievement of
children, recent studies have shown that parent involvement in
children’s schooling, drives children’s personal motivation for
academic success (Grolnick). According to Grolnick et al.,
literature reviewed shows a consistency in parental involvement
as an influencing factor in children’s learning outcome (2002).
Parental involvement in children’s schooling may be a
significant factor in learning outcome of children in relation to
socioeconomic status. Studies have shown that children of
families in low socioeconomic status tend to be less inclined to
present behavior that leads to motivation toward positive
learning outcomes. The perspective that low income families
and the lack of various resources may cause children to seek
innovative ways to reach goals and expectations of society.
Living in housing projects, peer pressure, and depending on
welfare can impact on self-perception and the need to fit in.
This may result in personal motivation influenced by negative
environments, such as delinquency. Children may be motivated
by the concept of the ends justifying the means; or behavior that
is anti-social and violates social norms in order to satisfy
specific and perceived needs. Children may be motivated to

5. conform to behaviors of groups that are the defining nature of
juvenile delinquency. Cconformity, by definition, is social
influence that cause individuals to change attitudes toward
behavior of groups that individuals are members of, which can
be any form of group including family or friends; and can be
motivated toward positive or negative attitudes and behavior
(Shiraev and Levy). Behavior that is negatively motivated may
be addressed using Maslow’s hierarchy of needs, a motivational
theory based on utility or needs satisfaction (Ori). The
principle of Maslow’s hierarchy is that behavior is motivation
by a desire to fulfill unsatisfied needs. Although Maslow’s
theory may explain motivation in terms of the desire to achieve
positive goals, it can also be used to demonstrate how lack of
ability to satisfy human needs can lead to violation of social
norms and negative motivation with the desire to satisfy needs.
According to Maslow’s theory, people cannot move to a level of
functioning unless basic needs are first met and so on. The first
rung of the pyramid are the physiological needs of people and
survival, such as the need for food, water, clothing, and sex. In
order for people to move beyond the first rung of the ladder or
pyramid these needs have to be met (Jones). Once the basic
needs are met, then motivation is driven by the need to satisfy a
sense of security, such as protection and feeling safe. The next
rung of the pyramid that has to be satisfied is the need that
people have in wanting to be a part of something such as group
membership that is characteristic of gang activity. Seeking to
fit in, and meeting the challenge of peer pressure, can motivate
the adolescent to conform to negative behavior and adhere to
group norms, as a means of satisfying the need to feel a sense
of belongingness (Ori). Approaching Maslow’s theory from this
perspective shows how adolescents can resort to negative
behavior and conform to negative group environments in order
to satisfy basic needs and the need to belong. However, parental
involvement in children’s schooling can reduce the rate of
negative learning outcomes suggested as being prevalent in
children of families in low socioeconomic income bracket. It

6. should also be noted that according to Grolnick et al., “Across a
wide range of ages and socioeconomic levels, it has been
established that when parents are involved, children are more
motivated and learning outcomes positive and successful
(2002)”.[footnoteRef:5] . [5: Parents differ widely in both
their levels of involvement and the types of involvement in
which they engage in the behavior of school involvement, and
may include activities such as volunteering at school, reading at
home, checking homework, communicating with teachers,
attending school functions and activities, as well as being
supportive of child’s involvement in school programs and
groups Grolnick & Slowiaczek, 1994). ]
Another theory of motivation is the self-determination theory
which focuses on autonomous and perceived competence, and
one that is usually used in motivation in the workplace, but may
be valuable in developing and motivating self-determination in
children (Jones). Self-determination theory, is a model or
framework that links behavior to motivations based on rewards
that are either intrinsic or extrinsic motivations. Self-
determination theory may also be apparent in how it influences
learning in early childhood and in turn build a foundation for
learning later in life. Intrinsic motivation is based on interest,
satisfaction, and other characteristics that are qualities of desire
to achieve. On the other hand, extrinsic motivation is driven by
tangible or verbal rewards based on praise or, in the case of
children, a sticker placed on a folder that lets all know the child
has reached a goal. Extrinsic motivation is completing
something with the knowledge that in completion there is a
reward or benefit as a consequence, whereas intrinsic
motivation is the performance of tasks based on the task in and
of itself. This form of motivation aligns with parenting in
which motivating desired behavior is learned through operate
conditioning. Operant conditioning is a type of learning in
which future behaviors are affected by the consequences of
current behaviors. In operant conditioning, the chances that

7. particular responses will be repeated are contingent upon the
type of reinforcement used. With operant conditioning previous
behaviors can be reinforced to ensure that they will be repeated
(Steinberg, Bomstein and Vandell).
Works Cited
BBC. "Human." Nature: Wildlife.
http://www.bbc.co.uk/nature/life/Human, October 2014.
Gasior, Kathleen. "How Does Socialization Affect Child
Development?" 6 December 2012. Mom.me. 4 April 2016.
Grolnick, W. S., Gurland, S. T., DeCourcey, W., & Jacob, K.
"Antecedents and Consequences of Mother's Autonomy Support:
An Experimental Investigation." Developmental Psychology,
38(1) (2002): 143. Academic Search Complete.
Jones, G. R. Introduction to business: How companies create
value in people. Boston: McGraw-Hill, 2007.
Marlene, Audrey. Motivation. 2011. Web page. 10 March 2016.
Ori, J. "The Hierarchy of Needs for Employees." 2015.
Smallbusiness Chronicals. Article. 10 March 2016.
Shiraev, Eric B. and David A Levy. Cross-cultural psychology:
Critical thinking and contemporary applications (5th ed.). Upper
Saddle River: Pearson Education, Inc., 2013.
Steinberg, Laurence, et al. Lifespan Development: Infancy
Through Adulthood. Belmont: Wadsworth, Cengage Learning,
2011.
Park 6
Annual Equivalence Analysis

8. Annual Equivalence
Annual equivalence analysis is another method to compare
alternatives.
Annual Equivalence calculates annual and unit costs for
deciding among alternatives.
Annual-Equivalent Worth Criterion
The annual-equivalent worth criterion provides a basis for
measuring investment worth by determining equal payments on
an annual basis.
AE(i) = PW(i) (A/P,i,N)
(Factor Notation)
(A/P,i,N) equation: [(i(1+i)^N/((1+i)^N)-1]
=PMT(i%,N,-NPW) (Excel)
Benefits of AE Analysis
A life-cycle-cost analysis takes into account all future costs
over the project’s useful life, not just lowest initial costs.
There may be a need to determine unit costs or profits for
comparing alternatives and for decisions such as “make-or-buy”
or rental.
AE analysis deals with complications such as unequal project
lives.

9. Capital Costs vs Operating Costs
Capital costs are incurred by the purchase of assets to be used
in production and service.
Since capital costs tend to be one-time costs (buying and
selling), the one-time costs must be translated into its annual
equivalent over the life of the project to do an AE cost analysis.
Capital cost is defined as the net cost of purchasing (after any
salvage value adjustment) plus the interest over the life of the
ownership.
Capital-Recovery Cost
A capital-recovery cost is a special name given to the annual
equivalent of a capital cost, CR(i).
CR(i) = I(A/P,i,N) – S(A/F,i,N)
= (I – S) (A/P,i,N) + i*S
AE Operating Costs
Operating costs will incur by the operation of physical plants or
equipment needed to provide service.
Equivalent present worth of operating costs needs to be found
and spread over the asset life on an annual basis.
Annual equivalence cost =
Capital cost + operating cost
Annual-Worth Analysis
Annual-worth analysis can be used to analyze unit-profit or

10. unit-cost calculations
Step 1: Determine the number of units to be produced or
serviced each year over the life of the asset
Step 2: Identify the cash flow series associated with production
or service over the life of the asset
Step 3: Calculate the present worth of the project’s cash flow
series at a given interest rate, and determine the equivalent
annual worth.
Step 4: Divide the equivalent annual worth over the number of
units to be produced or serviced during each year.
Annual-Worth Analysis
Annual-worth analysis can also be used to help analyze “make-
or-buy” decisions
Step 1: Determine the life span for which the part or product
will be needed.
Step 2: Determine the required annual quantity of the part or
product
Step 3: Obtain the unit cost of purchasing the part or product
from the outside firm
Step 4: Determine the cost of equipment, manpower, and all
other resources required to make the part or product
9
Annual-Worth Analysis
Annual-worth analysis can also be used to help analyze “make-
or-buy” decisions (cont.)
Step 5: Estimate the net cash flows associated with the “make”

11. option.
Step 6: Compute the annual equivalence cost of producing the
part or product
Step 7: Compute the unit cost for making the part or product by
dividing the annual equivalence cost by the required annual
quantity.
Step 8: Choose the option with the smallest unit cost.
Park 5
Present Worth Analysis
Loan Versus Project Cash Flows
An investment made in a fixed asset is similar to an investment
made by a bank when it lends money.
The essential characteristic of both transactions is that funds are
committed today in the expectation of their earning a return in
the future.
Loan cash flow: the future return is interest plus repayment of
the principle.
Project cash flow: the future return is earnings along with
capital expenditures and annual expenses.

12. Payback Screening
Determines how long it takes for a company to recover the
investment in a project.
The expected cash flows for each year are added until the sum
is equal to or greater than zero. Once greater than zero, the
project generates profit.
This calculation can be done by either ignoring or considering
time value of money (conventional-payback and discounted-
payback method)
A project does not merit consideration unless its payback period
is shorter than some specified period of time.
Present-Worth Analysis
Present-Worth analysis take into account the time value of
money to help improve project evaluations.
Most convenient time to calculate equivalent values is at time
zero (present).
NPW (net present worth) is the difference between the present
worth of all cash inflows and the present worth of all cash
outflows.
Present-Worth Criterion
Step 1: Determine the interest rate that the firm wishes to earn
on its investment (MARR, minimum attractive rate of return)
Step 2: Estimate service life of project.
Step 3: Estimate cash inflow for each period over the service
life.
Step 4: Estimate cash outflow for each period over the service
life.

13. Present-Worth Criterion
Step 5: Determine the net cash flows for each period (Cash
inflow-cash outflow)
Step 6: Find the present worth of each net cash flow at the
MARR and add them to determine the project’s NPW.
Step 7: If:
PW(i) > 0, accept the investment
PW(i) = 0, remain indifferent
PW(i) < 0, reject the investment
Capitalized-Equivalent Method
The capitalized cost represents the amount of money that must
be invested today in order to yield a certain return A at the end
of each and every period, forever, assuming an interest rate of i.
PW(i) = A/i (A = iPW(i))
If withdrawals were higher than A, you would be eating into the
principle, which would eventually reduce it to zero.
Comparing Alternatives
Doing nothing: Is the alternative worth pursuing?
Service projects: Which alternative has the least input or cost?
Revenue projects: Which alternative has the largest net gains
(output-input)?

14. Rubric for English 102 Research Papers
Proficiency
% Possible
% Earned
Research topics must reflect college-level intellectual concerns,
avoiding clichéd issues and/or arguments.
10%
The paper’s introduction provides an overview of the work’s
central issue and helps to create the reader’s interest.
5%
The paper has an argumentative thesis that clearly states the
main claim of the paper in one sentence.
10%
The paper has paragraphing with topic sentences that forecast
the focus of each paragraph that each topic sentence introduces
while also sustaining the essay’s thesis. They also include
concluding sentences that summarize the paragraph they
introduce.
15%
Body paragraphs are well-developed and based upon the
forecast of respective topic sentences without straying off topic.
15%
Both counterarguments and refutations are included just
preceding the paper’s conclusion paragraph.

15. 10%
The conclusion paragraph provides a clear sense of
completeness and closure, while summing up the main points of
evidence supporting the thesis.
5%
The paper is written in formal, academic tone without reliance
on first- or second-person voice: third-person voice is used,
consistently, to emphasize an objective perspective.
10%
Very few sentences have grammatical errors: where such errors
occur, they are only minor.
15%
Sources must be documented, fully and accurately, in APA,
Chicago, or MLA style.
5%
Informational Note: The word count of the research paper must
total at least 2500.
Minimum requirement, not graded