ANOVA Study Coursework Example | Topics and Well Written Essays - 250 words

ANOVA Study - Coursework Example Or value 0 can be assigned to the negative (frustration and depression) moods and value ‘1’ can be assigned to the positive (happiness and calmness) moods. The three levels A, B and C are the groups which consists of three groups of people watching the above said three TV shows. The independent variable in this analysis is the type of TV show and the dependent variable is moods of the people. It is assumed that moods of the people depend on the type of the TV shows they are watching. Based on this assumption, null and alternative hypothesis are formulated. H0: u1=u2=†¦.=uk and Ha: all us are not equal. The F-ratio equals the mean square between groups divided by the mean square within groups. That is, Fobt= MS bn/ MSwn . When F-ratio is found significant, Fobt should be greater than 1 (Heiman, 2003). In our analysis, the results are found to be significant. That is, null hypothesis is rejected and alternative hypothesis is accepted. Type of TV shows has significant role in influencing people’s mood. For Post –hoc comparisons, t-test is conducted. From t-test, we can find out that which type of TV show is more significant role in influencing people’ moods. Among A, B or C, which one leads to the happiness and calmness of the people. In other words, which TV show plays role in leading the people’s moods to depression or frustration. When a factor is analyzed using independent samples in all conditions, it is called between-subjects factor. Our study make use of between-subjects factor ANOVA. The selection of our three sample groups are completely independent. We are gathering information from three different group of people watching different TV shows and hence our analysis is between-subjects factor

The relationship between the nations of the global north and the Essay

The relationship between the nations of the global north and the global south, both before World War II and especially afterwards - Essay Example Even the Global North was effected with the political scenario that prevailed in the scene of pre First World War events and the post Second World War events. Japan for example was totally destroyed by the events that took place in the Second World War. Prior to the Second World War, Japanese government undertook offensive intentions that were dangerous towards the world as well as their own prosperity. The occurrence of the event of Hiroshima and Nagasaki crippled the entire structure of existence and led to destruction in totality. In the post world war second scenario, Japan had to start from scratch in order to provide the people with a means of living and also support their basic needs. In the post world war Two Scenario, the North had an edge over the South. Since the South was economically and politically weak, the North aimed at cashing in on this weakness and in turn provided them conditional assistance. This assistance came about in the form of political dictions. The events of the Cold War in the post Second World War events led to the more suited atmosphere for the North part of the world to bring about their own dictated terms upon the South. The South, badly in need of resources, funds and other basic needs to maintain their economic growth and prevent themselves from falling below the poverty line, had to embrace the tough and vested conditions and interests of the North. The events that took place in the earlier part had a greater impact for the major part of the 20th century. Its traces can be felt even in the modern times in the different parts of the world. The South American continent that comprises of the states of the likes of Bolivia, Cuba, Brazil, Chile, Argentina, and Peru are still in the throes of economic hurdles and obstacles. In the post First World One scenario, there were two distinct blocs within the Europe, United states of America and its other allies aimed at creating trust and partnership within. While the Central powers

Strategic Planning for Digital Marketing CommunicationsSummative Essay

Strategic Planning for Digital Marketing CommunicationsSummative Assessment - Essay Example The global recession has heavily impacted the economy of the United Kingdom which led to the proportionate increase in the prices of the goods and commodities. Less availability of cash to the public had extremely slowed down its business flow resulting in stagnancy. Though the food and drinks industry did not come to a static point but it received a massive blow as the food and drinking habits found cheaper avenues and the major food joints were largely affected (Pesto,2013). 1a (ii) Business Challenges – Savy Consumers With the United Kingdom (UK) grappling under recession, unemployment and other related difficulties the consumers become excessively choosy in matters of expenses. United Kingdom (UK) has been languishing under unemployment for a very long time, and as a result there has been huge amount of change in their expense habits. They have been reduced to the basic requirement items, which saw a large drop of sale in the luxury items and other high value good and serv ices. The non-promising state of the recovery of the economy, poor economic policies of the government has also failed to assure the citizens of economic security and sustainability. As a result, the consumers concentrated more on saving than on spending. The minimal expenses made by the consumers were on the essential commodities and cheaper versions of luxury items that made them satisfied of using luxury items in exchange of lesser money. In such a situation it became significantly difficult for a business house to sell their items and make a considerable profit for sustaining themselves (Pesto,2013). Industry Challenges 1a (iii) Industry Challenges – Market Competition Zouk being one of the differentiated restaurants located in a popular hub is a symbol of class and luxury. Such a differentiated brand is an added advantage for the kind of life style led by the citizens of the United Kingdom until affected by the economic downturn. Since the world recession and unemploymen t for a longer time has affected the normal functioning of the United Kingdom, the food and beverages industry has also been noticeable affected. The consumer preference has shifted from high end luxury wining and dining experiences to the less costly food stalls. The cheaper food items pose great competition and a threat to the profit margin of the Zouk’s which is specializes in quality food and food experiences. 1a (iv) Industry Challenges – Consumer Perception Zouk has been established as a high ended, luxury restaurant that offers great cuisine experiences. In the face of long term unemployment and great economic recession has left people with low disposable incomes and great uncertainty that looms over their future. In such a scenario, such branded and luxury avenues remain a distant object that hardly anyone would like to visit. The consumer preference shifts to cheaper food and food joints. The same perception that earned Zouk the present status has adversely af fected its business in the time of this economic recession and a prolonged tenure of unemployment that has engulfed entire United Kingdom. In order to attract the consumers it has to offer the less costly products but it will give rise to different speculations regarding the quality of the offered menu. The customers would doubt the quality of the food in the menu because of its availability in lower prices. It has the possibility of adversely affecting the image of the restaurant and its brand

What is a good tax Essay Example | Topics and Well Written Essays - 1000 words

What is a good tax - Essay Example The people in the state do not see the need as to why the government should reduce its expenditure but expenditure should be sufficient to meet the needs of the people. Most of the former politicians in Illinois State have faced significant challenges in their effort to come up with a good tax. One of the former Governors of the state by the name Scott Walker worked hard to cut the rights of the public employees to participate in collective bargaining. Deputy Director of the local council of the American Federation State said that the governor had an obsession of destroying the unions belonging to the public employees. The same director said that Mr. Rauner was trying to stir up the bitterness of the public employees who include teachers, firefighters, and police officers. The unions in Illinois State are always against a leader who tries to change the tax system of the state. Mr. Rauner may have a good idea of increasing the tax income of the state and improve economy of the state in the end. Most unions do not understand that when the economy is stable, having low unemployment rates will increase the tax income and government expenditure too. There is need for the citizens in the state to give the politicians independence to come up with a good tax system that will benefit both the employed and unemployed. A good tax is one that will enable the unemployed to venture into small-scale businesses and earn a living out of it. Davy portrays a good tax as one that is sufficient enough to avoid cutting of the benefits of the retirees because they have saved enough to rely on and survive on during their retirement period. However, Mr. Rauner said that the only problem he had was with the union leaders in the public sector who donated to political leaders. He claims that the government union has power to influence politicians in contracts negotiations about pensions, scales of payments,

Art as Expression Essay Example for Free

Art as Expression Essay The question of what art is cannot be properly answered without asking why art is. Prior to the advent of the written language, art was used as a means of communication, and in some ways, written language is in its own regard, art. Art, then, must be an expression of meaning by the artist, or potentially by the client that artist created the artwork for, but this assumption is altogether too broad. Art is not exclusively a private expression because it is left open to interpretation by the individual who looks upon it, and as such art can then be categorized as the representation through a variety of mediums, of whatever the beholder or artist thinks it should be. Which poses a greater question is something art if the individual who designed it had no intended message? Or visa versa is something art if the consumer of the artform does not perceive any message? I was at the San Francisco Museum of Modern Art about a two years ago, and they had some very abstract pieces on display, all of which brought forth in me at least some semblance of a response, except for a piece by Robert Rauschenberg, call White Painting [three panel], that began a philosophical debate between my brother and I because I refused to call the â€Å"painting† art. To me, there was no way to interpret the three panels of white, they were simply empty canvases that Rauschenberg sold for substantially more than he bought them for. No soul, or emotion went into the piece and as I understand art, that does not qualify as any more than a man playing a abstraction crazy consumer culture for the fool. To backtrack, art in my eyes is the true expression of an artist to the consumer, for the purpose of provocation; art has to make something well up in a person, even if it is not enjoyment, even if it is sorrow, or anger. Art is the way we have always talked to each other as people, and the pure aesthetic painters and songwriters of the last century do not produce art. Art is emotion and passion mixing into something for others to partake in; there is no private art, there is only art that no one else has applied their own perceptions to yet.

How Capital Structure Affects UK Cost of Capital

How Capital Structure Affects UK Cost of Capital Abstract Firms require a reasonable capital structure to meet the required target. To raise the finance, firms normally choose to review some different factors that are taken into account in considering. In this study, the author will examine the correlation between capital structure and the cost of the capital. As the cost will be a main factor for the firms to raise the finance. And different of capital structure will cause variable cost. This report will review the literature in capital structure and cost of finance. Along with the availability of source of finance, including the matching principle, a famous tools trade-off theory. As well as the argument follows, pecking order theory and agency cost theory. Drawing a conclusion based on the research survey data collection. Justify the relationship in how capital structure affects capital cost. Introduction The term capital structure refers to the mix of different types of funds which a company uses to finance its activities. Capital structure varies greatly from one company to another. For example, some companies are financed mainly by shareholders funds whereas others make much greater use of borrowings. Since the seminal publication of Modigliani and Miller (1958), corporate finance researchers have devoted considerable effort to investigating capital structure decisions (e.g. Myers, 1977 and 1984). Significant progress has been made in understanding the determinants of corporate capital structure with an increased emphasis on financial contracting theory (for example, Barclay and Smith, 1995; Mehran et al., 1999; and Graham et al., 1998 and, for an international view, Rajan and Zingales, 1995). This theory suggests that firm characteristics such as risk and investment opportunity set affect contracting costs. In turn, these costs impact on the choice between alternative forms of finance such as debt and equity, and between different classes of fixed-claim finance such as debt and leasing. The author will examine the relationship between the cost of capital and the structure of capital, and the effect of cost to raise finance in terms of making financial decision in the firms. Literature review 2.1 Theory of capital The origins of capital structure theory lie in the models of optimal capital structure that were developed in the wake of the famous Modigliani-Miller irrelevance theorem. These models later became to be known as the static trade-off theory (see e.g. Modigliani and Miller, 1958, 1963; Baxter, 1967; Gordon, 1971; Kraus and Litzenberger, 1973; Scott, 1976; Kim, 1978; Vinso, 1979). In this theory, the combination of leverage related costs (associated with e.g. bankruptcy and agency relations) and a tax advantage of debt produces an optimal capital structure at less than a 100% debt financing, as the tax advantage is traded off against the likelihood of incurring the costs. This theoretical result is now widely accepted in the profession. However, in seeking to model the wide diversity of capital structure practice, a number of additional factors have been proposed in the literature. 2.2 Factors that affect capital structure First, the use of debt finance can reduce agency costs between managers and shareholders by increasing the managers share of equity (Jensen and Meekling, 1976) and by reducing the free cash available for managers personal benefits (Jensen, 1986). Second, Myers and Majluf (1984) argue that, under asymmetric information, equity may be mispriced by the market. If firms finance new projects by issuing more equity, under pricing may cause les profit for existing shareholders in terms of the project NPV. Myers (1984) refers to this as pecking order theory of capital structure. The underinvestment can be reduced by financing the mispriced equity by the market. Internal funds involve no undervaluation and even debt that is not too risky will be preferred to equity. If external finance was required, firms tended first to issue the safest security, debt, and only issued equity as a last resort. Under this model, there is no well-define target mix of debt and equity finance. Each firms observed debt ratio reflects its cumulative requirements for external finance. Generally, profitable firms will borrow less because they can rely on internal resources and retain earnings. The preference for internal equity implies that firms will use less debt than suggested by the trade-off theory. Other factors that have been invoked to help explain the diversity of capital structures include: management behaviour (Williamson, 1988), firm-stakeholder interaction (Grinblatt and Titman, 1998), and corporate control issues (Harris and Raviv, 1988 and 1991). 2.3 How to finance The conventional discussion on a firms choice between long-term and short-term debt has generally focused on three aspects: matching debt maturity with asset life; extending the term-to-maturity of loans to stretch the firms debt capacity; and concentrating long-term debt issues in periods of relatively low interest rates. Recent development in the financial research literature has advanced several economics concepts such as transaction and agency costs, tax-timing option, and information asymmetry, to the debt maturity choice paradigm. Brick and Ravid (1985) show that taxes can also imply an optimal debt maturity structure. Depending on the term-structure of interest rates, long-term (short-term) is optimal, since it accelerates the tax benefit of debt given an increasing (decreasing) term structure. When firms cannot reveal the true quality of their cash flows, i.e. when information asymmetry exists, they can prevent or abate undervaluation by using a variety of signalling devices, such as debt (leverage), dividend payments or the maturity structure of debt. Thus, information asymmetry gives firms an incentive to signal their quality and credibility by taking on more debt and shortening their debt maturity. A higher leverage, especially more short-term debt, signals favourable inside information to the market because it offers the possibility to renegotiate terms in the future, when more information has become available. Long-term debt entails higher information costs than short-term debt, because the market expects a stronger deterioration of quality than insiders do. Firms with a low level of information asymmetry are therefore more likely to issue long-term debt (Flannery, 1986). In the study of international capital structures, Rajan and Zingales (1995) argue that it is important to test the robustness of US finds in different environments. They identify as potentially important the cross-country differences in tax and bankruptcy codes, in the market for corporate control and in the historical role played by banks and security markets. Methodology This survey focuses primarily on the determinants of the capital structure policy of firms but also includes some questions on topics that are closely related to the capital structure. For example, the questions address their approximate cost of equity to the managers, how they estimate their cost of equity (with CAPM or other methods), and whether the impact on the weighted average cost of capital is a consideration in their capital structure choice. The survey was developed after a careful review of the capital structure literature pertaining to the U.S. and European countries. For ease of comparability, the author tried to keep the format and design the survey similar to that of Graham and Harvey (2001), but modified or simplified some questions that are likely to be relevant in the UK context. For example, literature suggests that there are strong differences in corporate objectives between American and UK financial systems since the former system focuses on maximizing shareholder wealth while the later emphasizes the welfare of all stakeholder including employees, creditors and even he government. To examine this difference, the author ask the CFOs about the extent to which different stakeholders influence their firms financial decisions, the author also ask the firms the percentage of their free float share and whether they have preference or common share. 3.1 Sampling The initial samples for mailing the survey consist of a total of 57 firms from UK. The choice of initial sample was based on selecting firms that are representative of the UK firms, are widely traded, are comparable across country, and are public limited with available information. These criteria are important to justify the firms specific difference. From this sample, 9 firms were deleted because of non-availability of addresses and another 17 firms were deleted because they declined to participate in the survey, leaving a final sample of 31 firms. The survey was anonymous as this was an important criterion to obtain honest responses. In the mailing a letter was included that was addressed to the CFO or CEO explaining the objective of the study and promising to send a copy of the findings to those who wished to receive. A total of 12 responses were received by mail, which represents a response rate about 38 percent. 3.3 Summary of findings The respondent firms represent a wide variety of industries with a larger concentration in manufacturing; mining; energy and transportation sector; high technology; and financial sectors. About three forth of firms have a target debt to equity ratios, and about half of these firms maintain a target debt to equity ratios of one. Further, many respondents have a large percentage of their total debt in short term. About 80 percent of respondents report that they calculate their cost of equity, and over 77% of them employ the Capital Asset Pricing Model (CAPM) to calculate this cost. The estimated cost of equity reported by respondents ranges between 9%-15% only few firms report cost of capital greater than 15% The correlations among the demography variables of this survey are largely as predicted in the literature. These correlations will be discussed in detail in the next section. Analysis Three sets of factors in managers opinion that are likely to influence capital structure of firms are selected based on a review of literature. The first set is based on the implications of different capital structure theories such as the trade-off theory, the pecking order theory, and the agency cost theory. Generally the managers will make the financial decisions based on theories and through these decisions to affect their cost of capital. The second set relates to the managers timing of debt or equity issues since literature suggests that managers are concerned about financial flexibility. With evidence support in the findings, most of managers within all industries consider the financial flexibility as the most important issue when raise finance. Finance by short term may give the company advantage in changing their status to meet the changing world environment and provide less risks in investments. Finally, the last set of factors is based on common beliefs among managers about the impact of capital structure changes on financial statements such as the potential impact of equity issue on earnings. This factor shows the important of experience in managers mind and how it will be impact on the decisions. In summary, to analyse a companys capital structure, we assume that the company is only financed by two ways, either by shareholders equity or borrowings. It is just to consider how cost of capital affect the different proportion of debt in capital structure. Figure 8: Two advantages and two disadvantages of borrowing Advantages Disadvantages 1. Cheap direct cost because debt is less risky to the investor 1. Financial leverage causes shareholders to increase their cost of capital 2. Cheap direct cost because interest is a tax deductible expense. 2. Bankruptcy risks if borrowings are too high. The main advantage of borrowing is that the debt has a cheaper direct cost than equity. Debt is less risky to the investor than equity (low risk result a low required return) Interest payments are tax deductable whereas dividends are not. However, borrowing has two distinct disadvantages. Firstly it causes shareholders to suffer increased volatility of earnings. This is known as financial leverage. The increased volatility to shareholders returns resulting from financial leverage causes shareholders to demand a higher rate of return in compensation. The second disadvantage of borrowing is that if the company borrows too much, it increases its bankruptcy risks. At reasonable levels of gearing this affect will be imperceptible, but it becomes significant for highly geared companies and results in a range of risks and costs which have the effect of increasing the companys cost of capital. Limitation and Ethical issue The research focus on the UK market and respondents are from different areas of industry. The limitation has been carried out. First will be the time of the research. As a three months research, the data was not examined as correct enough to support the authors point. The data collection should be carrying continually in a long period of time and often reviewed at some certain time. Second, the way of collecting these data is limited by mailing. The survey may not represent the whole market as the limited number of respondents. A research should conduct all the possible methods including quantitative and qualitative. Finally, as this is not a professional research, lots of objectives in the research declined to give feedback in judging their financial structure in the case some of this could be their classified information. The ethical issue has been raised in this research; this will be honesty in the feedbacks from the respondents. As this survey is anonymous research, the managers may not give the right information in case of rising threats in competition. The importance of financial structure in firms causes the mangers to think before they actually answer the questions. The privacy issue in their mind raised that they may not want to share all the information regarding to the financial statement. Conclusion The purpose of this article is to supplement the existing literature with an analysis of the factors determining the financial structure affecting the cost of capital. The analyses give rise to the following conclusions. The study presents a dynamic model to address the possibility of adjustment costs incurred in reaching an optimal capital structure. And examine the literature in the factors in capital structure in affecting the cost of financing a firm through the facts in reality. The conclusion can be drawn as the cost of capital is a key factor that firms taken into account when raise finance along with the financial flexibility. On the other hand, the capital structure of a firm will affect the firms cost in both short term and long term. The firms raise the finance to meet the required target, there is no such a way to limit firms financial structure. They may want to choose a short term loan to meet flexibility of cash flow, in the contrast; the long term finance may require more information and satisfaction of the firms. The cost of capital depends on how firms finance their capital structure. Reference and bibliography Barclay, M.J. and C.W. Smith (1995), The Priority Structure of Corporate Liabilities, Journal of Finance, Vol. 50, No. 3 (July) Baxter, N. D. (1967) Leverage, the Risk of Ruin and the Cost of Capital, Journal of Finance, 22 Brick, I. and Ravid, A. (1985) On the relevance of debt maturity structure, Journal of Finance, 40 Flannery, M. (1986) Asymmetric information and risky debt maturity choice, Journal of Finance, 41 Gordon, M. (1971) Towards a theory of financial distress, Journal of Finance, 26 Graham, J.R., M.L. Lemmon and J.S. Schallheim (1998), Debt, Leases, Taxes and The Endogeneity of Corporate Tax Status, Journal of Finance, Vol. 53, No. 1 (February) Graham, J.R. and C.R. Harvey (2001), The Theory and Practice of Corporate Finance: Evidence from the Field, Journal of Financial Economics, Vol. 60, Nos. 2/3 (May) Grinblatt, M. and S. Titman (1998), Financial Markets and Corporate Strategy (Irwin/McGraw- Hill, USA) Harris, M. and A. Raviv (1988), Corporate Control Contests and Capital Structure, Journal of Financial Economics, Vol. 20 Harris, M. and A. Raviv (1991), The Theory of Capital Structure, Journal of Finance, Vol. 46, No. 1 (March) Jensen, M.C. (1986), Agency Costs of Free Cash Flow, Corporate Finance and Takeovers, American Economic Review, Vol. 76, No. 2, Jensen, M.C. and W. Meckling (1976), Theory of the Firm: Managerial Behaviour, Agency Costs, and Capital Structure, Journal of Financial Economics, Vol. 3, No. 4 Kim, E. (1978) A mean-variance theory of optimal capital structure and corporate debt capacity, Journal of Finance, 23 Kraus, A. and Litzenberger, R. (1973) State preference model of optimal leverage, Journal of Finance, 28 Mehran, H., R.A. Taggart and D. Yermack (1999), CEO Ownership, Leasing and Debt Financing, Financial Management, Vol. 28, No. 2 Modigliani, F.F. and M.H. Miller (1958), The Cost of Capital, Corporation Finance, and the Theory of Investment, American Economic Review, Vol. 48, No. 3 (June) Myers, S.C. (1977), Determinants of Corporate Borrowing, Journal of Financial Economics, Vol. 5, No. 2 (November) Myers, S.C. (1984), The Capital Structure Puzzle, Journal of Finance, Vol. 39, No. 3 (July) Myers, S. and Majluf, N. (1984) Corporate financing and investment decisions when firms have information that investors do not have, Journal of Financial Economics, 13, Rajan, R.G. and L. Zingales (1995), What Do We Know About Capital Structure Choice? Some Evidence from International Data, Journal of Finance, Vol. 50, No. 5 Scott, J. (1976) A theory of optimal capital structure, Bell Journal of Economics, 7 Vinso, J. (1979) A determination of the risk of ruin, Journal of Financial and Quantitative Analysis, 14 Williamson, O.E. (1988), Corporate Finance and Corporate Governance, Journal of Finance, Vol. 43, No. 3 (July) Advantage and disadvantage of borrowing, available on website www.accaglobal.com, access on 28.04.2010 How Capital Structure Affects UK Cost of Capital How Capital Structure Affects UK Cost of Capital Abstract Firms require a reasonable capital structure to meet the required target. To raise the finance, firms normally choose to review some different factors that are taken into account in considering. In this study, the author will examine the correlation between capital structure and the cost of the capital. As the cost will be a main factor for the firms to raise the finance. And different of capital structure will cause variable cost. This report will review the literature in capital structure and cost of finance. Along with the availability of source of finance, including the matching principle, a famous tools trade-off theory. As well as the argument follows, pecking order theory and agency cost theory. Drawing a conclusion based on the research survey data collection. Justify the relationship in how capital structure affects capital cost. Introduction The term capital structure refers to the mix of different types of funds which a company uses to finance its activities. Capital structure varies greatly from one company to another. For example, some companies are financed mainly by shareholders funds whereas others make much greater use of borrowings. Since the seminal publication of Modigliani and Miller (1958), corporate finance researchers have devoted considerable effort to investigating capital structure decisions (e.g. Myers, 1977 and 1984). Significant progress has been made in understanding the determinants of corporate capital structure with an increased emphasis on financial contracting theory (for example, Barclay and Smith, 1995; Mehran et al., 1999; and Graham et al., 1998 and, for an international view, Rajan and Zingales, 1995). This theory suggests that firm characteristics such as risk and investment opportunity set affect contracting costs. In turn, these costs impact on the choice between alternative forms of finance such as debt and equity, and between different classes of fixed-claim finance such as debt and leasing. The author will examine the relationship between the cost of capital and the structure of capital, and the effect of cost to raise finance in terms of making financial decision in the firms. Literature review 2.1 Theory of capital The origins of capital structure theory lie in the models of optimal capital structure that were developed in the wake of the famous Modigliani-Miller irrelevance theorem. These models later became to be known as the static trade-off theory (see e.g. Modigliani and Miller, 1958, 1963; Baxter, 1967; Gordon, 1971; Kraus and Litzenberger, 1973; Scott, 1976; Kim, 1978; Vinso, 1979). In this theory, the combination of leverage related costs (associated with e.g. bankruptcy and agency relations) and a tax advantage of debt produces an optimal capital structure at less than a 100% debt financing, as the tax advantage is traded off against the likelihood of incurring the costs. This theoretical result is now widely accepted in the profession. However, in seeking to model the wide diversity of capital structure practice, a number of additional factors have been proposed in the literature. 2.2 Factors that affect capital structure First, the use of debt finance can reduce agency costs between managers and shareholders by increasing the managers share of equity (Jensen and Meekling, 1976) and by reducing the free cash available for managers personal benefits (Jensen, 1986). Second, Myers and Majluf (1984) argue that, under asymmetric information, equity may be mispriced by the market. If firms finance new projects by issuing more equity, under pricing may cause les profit for existing shareholders in terms of the project NPV. Myers (1984) refers to this as pecking order theory of capital structure. The underinvestment can be reduced by financing the mispriced equity by the market. Internal funds involve no undervaluation and even debt that is not too risky will be preferred to equity. If external finance was required, firms tended first to issue the safest security, debt, and only issued equity as a last resort. Under this model, there is no well-define target mix of debt and equity finance. Each firms observed debt ratio reflects its cumulative requirements for external finance. Generally, profitable firms will borrow less because they can rely on internal resources and retain earnings. The preference for internal equity implies that firms will use less debt than suggested by the trade-off theory. Other factors that have been invoked to help explain the diversity of capital structures include: management behaviour (Williamson, 1988), firm-stakeholder interaction (Grinblatt and Titman, 1998), and corporate control issues (Harris and Raviv, 1988 and 1991). 2.3 How to finance The conventional discussion on a firms choice between long-term and short-term debt has generally focused on three aspects: matching debt maturity with asset life; extending the term-to-maturity of loans to stretch the firms debt capacity; and concentrating long-term debt issues in periods of relatively low interest rates. Recent development in the financial research literature has advanced several economics concepts such as transaction and agency costs, tax-timing option, and information asymmetry, to the debt maturity choice paradigm. Brick and Ravid (1985) show that taxes can also imply an optimal debt maturity structure. Depending on the term-structure of interest rates, long-term (short-term) is optimal, since it accelerates the tax benefit of debt given an increasing (decreasing) term structure. When firms cannot reveal the true quality of their cash flows, i.e. when information asymmetry exists, they can prevent or abate undervaluation by using a variety of signalling devices, such as debt (leverage), dividend payments or the maturity structure of debt. Thus, information asymmetry gives firms an incentive to signal their quality and credibility by taking on more debt and shortening their debt maturity. A higher leverage, especially more short-term debt, signals favourable inside information to the market because it offers the possibility to renegotiate terms in the future, when more information has become available. Long-term debt entails higher information costs than short-term debt, because the market expects a stronger deterioration of quality than insiders do. Firms with a low level of information asymmetry are therefore more likely to issue long-term debt (Flannery, 1986). In the study of international capital structures, Rajan and Zingales (1995) argue that it is important to test the robustness of US finds in different environments. They identify as potentially important the cross-country differences in tax and bankruptcy codes, in the market for corporate control and in the historical role played by banks and security markets. Methodology This survey focuses primarily on the determinants of the capital structure policy of firms but also includes some questions on topics that are closely related to the capital structure. For example, the questions address their approximate cost of equity to the managers, how they estimate their cost of equity (with CAPM or other methods), and whether the impact on the weighted average cost of capital is a consideration in their capital structure choice. The survey was developed after a careful review of the capital structure literature pertaining to the U.S. and European countries. For ease of comparability, the author tried to keep the format and design the survey similar to that of Graham and Harvey (2001), but modified or simplified some questions that are likely to be relevant in the UK context. For example, literature suggests that there are strong differences in corporate objectives between American and UK financial systems since the former system focuses on maximizing shareholder wealth while the later emphasizes the welfare of all stakeholder including employees, creditors and even he government. To examine this difference, the author ask the CFOs about the extent to which different stakeholders influence their firms financial decisions, the author also ask the firms the percentage of their free float share and whether they have preference or common share. 3.1 Sampling The initial samples for mailing the survey consist of a total of 57 firms from UK. The choice of initial sample was based on selecting firms that are representative of the UK firms, are widely traded, are comparable across country, and are public limited with available information. These criteria are important to justify the firms specific difference. From this sample, 9 firms were deleted because of non-availability of addresses and another 17 firms were deleted because they declined to participate in the survey, leaving a final sample of 31 firms. The survey was anonymous as this was an important criterion to obtain honest responses. In the mailing a letter was included that was addressed to the CFO or CEO explaining the objective of the study and promising to send a copy of the findings to those who wished to receive. A total of 12 responses were received by mail, which represents a response rate about 38 percent. 3.3 Summary of findings The respondent firms represent a wide variety of industries with a larger concentration in manufacturing; mining; energy and transportation sector; high technology; and financial sectors. About three forth of firms have a target debt to equity ratios, and about half of these firms maintain a target debt to equity ratios of one. Further, many respondents have a large percentage of their total debt in short term. About 80 percent of respondents report that they calculate their cost of equity, and over 77% of them employ the Capital Asset Pricing Model (CAPM) to calculate this cost. The estimated cost of equity reported by respondents ranges between 9%-15% only few firms report cost of capital greater than 15% The correlations among the demography variables of this survey are largely as predicted in the literature. These correlations will be discussed in detail in the next section. Analysis Three sets of factors in managers opinion that are likely to influence capital structure of firms are selected based on a review of literature. The first set is based on the implications of different capital structure theories such as the trade-off theory, the pecking order theory, and the agency cost theory. Generally the managers will make the financial decisions based on theories and through these decisions to affect their cost of capital. The second set relates to the managers timing of debt or equity issues since literature suggests that managers are concerned about financial flexibility. With evidence support in the findings, most of managers within all industries consider the financial flexibility as the most important issue when raise finance. Finance by short term may give the company advantage in changing their status to meet the changing world environment and provide less risks in investments. Finally, the last set of factors is based on common beliefs among managers about the impact of capital structure changes on financial statements such as the potential impact of equity issue on earnings. This factor shows the important of experience in managers mind and how it will be impact on the decisions. In summary, to analyse a companys capital structure, we assume that the company is only financed by two ways, either by shareholders equity or borrowings. It is just to consider how cost of capital affect the different proportion of debt in capital structure. Figure 8: Two advantages and two disadvantages of borrowing Advantages Disadvantages 1. Cheap direct cost because debt is less risky to the investor 1. Financial leverage causes shareholders to increase their cost of capital 2. Cheap direct cost because interest is a tax deductible expense. 2. Bankruptcy risks if borrowings are too high. The main advantage of borrowing is that the debt has a cheaper direct cost than equity. Debt is less risky to the investor than equity (low risk result a low required return) Interest payments are tax deductable whereas dividends are not. However, borrowing has two distinct disadvantages. Firstly it causes shareholders to suffer increased volatility of earnings. This is known as financial leverage. The increased volatility to shareholders returns resulting from financial leverage causes shareholders to demand a higher rate of return in compensation. The second disadvantage of borrowing is that if the company borrows too much, it increases its bankruptcy risks. At reasonable levels of gearing this affect will be imperceptible, but it becomes significant for highly geared companies and results in a range of risks and costs which have the effect of increasing the companys cost of capital. Limitation and Ethical issue The research focus on the UK market and respondents are from different areas of industry. The limitation has been carried out. First will be the time of the research. As a three months research, the data was not examined as correct enough to support the authors point. The data collection should be carrying continually in a long period of time and often reviewed at some certain time. Second, the way of collecting these data is limited by mailing. The survey may not represent the whole market as the limited number of respondents. A research should conduct all the possible methods including quantitative and qualitative. Finally, as this is not a professional research, lots of objectives in the research declined to give feedback in judging their financial structure in the case some of this could be their classified information. The ethical issue has been raised in this research; this will be honesty in the feedbacks from the respondents. As this survey is anonymous research, the managers may not give the right information in case of rising threats in competition. The importance of financial structure in firms causes the mangers to think before they actually answer the questions. The privacy issue in their mind raised that they may not want to share all the information regarding to the financial statement. Conclusion The purpose of this article is to supplement the existing literature with an analysis of the factors determining the financial structure affecting the cost of capital. The analyses give rise to the following conclusions. The study presents a dynamic model to address the possibility of adjustment costs incurred in reaching an optimal capital structure. And examine the literature in the factors in capital structure in affecting the cost of financing a firm through the facts in reality. The conclusion can be drawn as the cost of capital is a key factor that firms taken into account when raise finance along with the financial flexibility. On the other hand, the capital structure of a firm will affect the firms cost in both short term and long term. The firms raise the finance to meet the required target, there is no such a way to limit firms financial structure. They may want to choose a short term loan to meet flexibility of cash flow, in the contrast; the long term finance may require more information and satisfaction of the firms. The cost of capital depends on how firms finance their capital structure. Reference and bibliography Barclay, M.J. and C.W. Smith (1995), The Priority Structure of Corporate Liabilities, Journal of Finance, Vol. 50, No. 3 (July) Baxter, N. D. (1967) Leverage, the Risk of Ruin and the Cost of Capital, Journal of Finance, 22 Brick, I. and Ravid, A. (1985) On the relevance of debt maturity structure, Journal of Finance, 40 Flannery, M. (1986) Asymmetric information and risky debt maturity choice, Journal of Finance, 41 Gordon, M. (1971) Towards a theory of financial distress, Journal of Finance, 26 Graham, J.R., M.L. Lemmon and J.S. Schallheim (1998), Debt, Leases, Taxes and The Endogeneity of Corporate Tax Status, Journal of Finance, Vol. 53, No. 1 (February) Graham, J.R. and C.R. Harvey (2001), The Theory and Practice of Corporate Finance: Evidence from the Field, Journal of Financial Economics, Vol. 60, Nos. 2/3 (May) Grinblatt, M. and S. Titman (1998), Financial Markets and Corporate Strategy (Irwin/McGraw- Hill, USA) Harris, M. and A. Raviv (1988), Corporate Control Contests and Capital Structure, Journal of Financial Economics, Vol. 20 Harris, M. and A. Raviv (1991), The Theory of Capital Structure, Journal of Finance, Vol. 46, No. 1 (March) Jensen, M.C. (1986), Agency Costs of Free Cash Flow, Corporate Finance and Takeovers, American Economic Review, Vol. 76, No. 2, Jensen, M.C. and W. Meckling (1976), Theory of the Firm: Managerial Behaviour, Agency Costs, and Capital Structure, Journal of Financial Economics, Vol. 3, No. 4 Kim, E. (1978) A mean-variance theory of optimal capital structure and corporate debt capacity, Journal of Finance, 23 Kraus, A. and Litzenberger, R. (1973) State preference model of optimal leverage, Journal of Finance, 28 Mehran, H., R.A. Taggart and D. Yermack (1999), CEO Ownership, Leasing and Debt Financing, Financial Management, Vol. 28, No. 2 Modigliani, F.F. and M.H. Miller (1958), The Cost of Capital, Corporation Finance, and the Theory of Investment, American Economic Review, Vol. 48, No. 3 (June) Myers, S.C. (1977), Determinants of Corporate Borrowing, Journal of Financial Economics, Vol. 5, No. 2 (November) Myers, S.C. (1984), The Capital Structure Puzzle, Journal of Finance, Vol. 39, No. 3 (July) Myers, S. and Majluf, N. (1984) Corporate financing and investment decisions when firms have information that investors do not have, Journal of Financial Economics, 13, Rajan, R.G. and L. Zingales (1995), What Do We Know About Capital Structure Choice? Some Evidence from International Data, Journal of Finance, Vol. 50, No. 5 Scott, J. (1976) A theory of optimal capital structure, Bell Journal of Economics, 7 Vinso, J. (1979) A determination of the risk of ruin, Journal of Financial and Quantitative Analysis, 14 Williamson, O.E. (1988), Corporate Finance and Corporate Governance, Journal of Finance, Vol. 43, No. 3 (July) Advantage and disadvantage of borrowing, available on website www.accaglobal.com, access on 28.04.2010

BIM Based Life Cycle Assessment Tool

BIM Based Life Cycle Assessment Tool Life Cycle Assessment (LCA) is used to evaluate a particular product, process, or activity from cradle to grave the environmental effects. LCA is methodology for measuring and evaluating some aspects of all relevant costs, revenues, environmental impacts and performance associated in all stages of an asset over its life cycle (ISO15686, 2008), it compiles and evaluates an inventory of relevant input, output, and potential environmental impacts in relation to the objective of study throughout its life cycle (ISO14040, 2006). LCA provides a complete picture of the interactions of activities with the environment and it is one of the decision supporting tools providing information on environmental effects of these activities and identifies opportunities for environmental improvement for stakeholders to make decision. The concept of LCA started from late 1960s, the earliest forerunners were the Resource and Environmental Profile Analyses (REPAs) and a research founded by Coca Cola funds study of different beverage containers and packaging system. LCA been extended used during global oil crises from 1973 emerged many countries began to explore substitute resources to produce energy. Energy analysis by comparing different substitute sources through life-cycle basis gave a true indication. The interest of LCA continued used for decision making policy through the 1980s. The REPA early studies emphasized on raw material, energy inputs and waste generation through environmental impact as LCA methodology and modern LCA methodology outlined the components of contemporary LCA from four distinct analytical steps: goal definition, inventory assessment, impact assessment, and improvement analysis in the late 1990s released ISO standards 14040 14043 by the International Organisation for Standardisation (ISO). The latest series includes ISO 14040:2006 life cycle assessment principles and framework, ISO 14041:1998 standards for goal and scope definition and inventory analysis, ISO14042:2000 life cycle impact assessment and ISO 14043:2000 life cycle interpretation. There still much development tacking place till today. The stages of the LCA methodology based on international standards of series ISO 14040 consists of defining the goal and scope, creating the inventory, assessing the impact and finally interpreting. Today, the usage of LCA is extended to the construction industry; works have been undertaken on both large and small aspects from internal to external. Internally, LCA can be used in process analysis, product evaluation, material selection (cement or bricks) and product comparison (heating systems). From externally use, LCA can be used for marketing, information and education, eco-labelling. LCA is a comprehensive method to evaluate environment impact through whole life approach, LCA has 40-years history and still not been used widely due to there are limitations in using this tool. Firstly, expected life-time is various. Data collection and data reliability is always the question and difficulties to LCA tool. Further, uncertainty is everywhere and comparisons between studies are difficult. In all LCA is a decision supporting tool, no single methods can be used individually in providing a clear solution or decision. There are various LCA tools have been developed based on qualitative and quantitative methods that can assess building environmental impacts from embodied energy, operational energy, CO2 emission and other emissions from buildings. These tools have been classified and categorized into five major categories: Detailed LCA Modelling Tool; LCA design Tool; LCA CAD tool; Green Product Guides and Checklist and Building Assessment Schemes. Detailed LCA Modelling Tools: This category of LCA tools to calculate embodied energy and environmental impacts based on materials used, building components and processes of the work. The most famous used software under this category includes SimaPro, TEAM, Gabi, KCL-ECO, Boustead, GaBi, PEMS, Athena, BEES, LISA, ECO-QUANTUM, EQUER, Green Building Advisor USA, SIA D0123, Energy Life Cycle Assessment Model for Building Design (SBI) [14]. SimaPro is one of the most widely used professional LCA software under detailed LCA modelling tool category and worked based on calculating of material used by consultants, research institutes and universities. It contains several impact assessment methods can direct calculate for each element in a project; inventory databases can be edited and expanded easily; open and transparent database (Pre4 database, FRANKLIN US LCI database, IDEMAT database, BIWAL250 database, FEFCO database) which helps in fast data entry and database consistency checks. BEES (Building for Economic and Environmental Sustainability) USA be developed and to implement the most appropriate balance between environmental sustainability and economic performance. It can be used throughout all construction stages from preliminary design stages, construction or building product manufacture, maintenance of building and to building services. The data used in this software including inventory flow items of energy used and materials. It a typical detailed LCA modelling tool worked on building components. LCA Design Tools: LCA Design Tool is the yardstick for designers to measure environment performance of the building during design stage. By using this kind of LCA tools, designers can easily evaluated environment impact. Environmental information can be optimized measured. Envest is one of the widely used software under category of LCA Design tools developed by Building Research Establishment (BRE) in the U.K. Designers input the basic design information such as building element choices, building height, number of storeys, window areas and building Gross Floor Area. Calculation of building associated impacts and different options comparisons then performance. This software measures each environmental issue separately in their own units. Environmental issues data is more easily to use and gather on UK basis. Envest use weighting system based on BREs Ecopoint score. LCA CAD Tools: Similar to LCA Design Tools, some of LCA tools integrated with CAD planning tool or CAD assessment tool. Tools under this category are able to read building component information from CAD. Some tools can work with 3-D CAD to work get the material information and building components from CAD directly in order to work out environmental impact analysis. Well known software under this category include EcoScan, ECOit, LCAiTLCAid, ECOTECT, ENER-RATEE, Energy 10, EQUER, PAPOOSE, Legoe, Ecopro, OGIP, EPCMB [15]. LCAidTM is a decision-making tool developed by Australia and aimed to help building designer, LCA practitioner, LCA researcher or building rating practitioner for evaluating the different options of building or building components environmental performance and impact. It makes evaluation work easier and faster with working on 3D CAD system by importing materials quantities and assigning materials to each building elements. It is based on Green Building Challenges rating guide to weighing the elements. Life Cycle Inventories of building materials data are stored at LCAid library. Green Product Guides and Checklists: It is the most common use methods to assess environment impact currently. They are combine of global analysis and problem analysis take into consideration. Tools under this category provide qualitative guides of environmental issues to help stakeholders in decision making with consideration of environment performance at design stage when selecting alternative materials, or building components. Many countries or regions they have their own standards or guides to follow. Some guilds are famous and used worldwide like LEED from US and BREEAM from UK, International standards ISO 14040 to ISO 14043, and other famous guides include Environmental Preference Method (EPM), BEPAC, GREEN housing A-Z, ECDG, EcoSpecifier. [15]. Building Assessment Schemes: Basically, tools under this category are used to predict or assess building performance during its operational stage. They normally can be used before or after building occupancy. Examples include GBTool, BEAVER/ESOII, BUNYIP, DOE2.2, GSL-Giselle, Okoprofile, NatHERS, SEDA, ECOPROFILE, E2000 and BEE 1.0. [15]. Building information (bim) Changes in Information Communication Technologies lead to a change in the way information represented and in particular, information is being fed more easily and distributed more quickly to different stakeholders by the use of tool such as the Building Information Modelling (BIM) [15]. BIM is a digital building model which generating, managing and sharing information during its entire life cycle. [17] The development of BIM results in fundamentally changes of building design. With design information input of product materials, specification, finishes, costs, carbon content and any other special requirement transfers into virtual building model. Different stakeholders have better collaboration by using BIM. Figure 3 shows the usage of BIM and its functions. BIM has fundamentally changed how buildings are designed. There is now plenty of hard evidence that the wealth of information from virtual building models has completely transformed how the designers make their design decisions lead to a far better sustainable design buildings indeed. Typically collaboration between design disciplines is a low level information exchange, via a simple electronic or published format, however it is a existing commonly form of information collaboration in construction sector, in which there is none of added-value to the design process. The maintained situation is due to todays software tools, in particular to the BIM, have merely facilitated meaningful information collaboration across the sustainable discipline. Proportionally through adding time factor into BIM, BIM becomes a 4D modelling tool. The usage of BIM can then be expanded to planning, supply chain management, life cycle costing and assessment. The integration of LCA disciplines into BIM enables to assess both economic efficiency and sustainability of buildings. Its availability lies in a central building component repository. Further, BIM can be seen as a 5D modelling tool with element/material cost information, together with time information stored in BIM, it can work out the project estimating cost and its cash flow along the project life cycle. Comprising assessment to the environmental information into the BIM, BIM can further become a 6D modelling tool that can calculate the environmental impacts from buildings. Eventually, it can become even nD model with other special information added in [18]. Performance-based design supported by product models is becoming stage-of-the-art practice [19]. Therefore, one of the key advantages of using BIM as an analysis tool allows multi-disciplines to simulate building performance in a virtual environment. The number of performance criteria can be analyzed that are depended on several aspects includes architectural, structural, mechanical, energy. Therefore, BIM tool is a feasible approach for multidisciplinary team members to access and collaborate effectively Current existing BIM tools like Autodesk Revit, Tekla Structures, Digital Project, Bentley Syetems, ArchiCAD, AutoCAD- based Application, DProfiler and so on. Through the applications of construction practices, they have been found on their own strengths and weakness, especially in terms of technique, operational ease and the facilitation of sustainable information across. The analysis to the usedBIM tools being used shown below: Introduction Strengths Weakness Revit Introduce by Autodesk in 2002 Leader for the use in BIM gbXML interface for energy simulation and load analysis Direct interface to ROBOT and RISA structural analysis Conceptual design tool 2D section of detailing View interface: DGN, DWG, DWF, DXF, IFC, SAT, SKP, AVI, ODBC, gbXML, BMP, JPG, TGA, TIF Functionality is well-design and user-friendly Broad set of object libraries Direct link interface Bi-directional drawing Slow down on project larger than 200MB Limitation on parametric rules with angles Bentley Systems Introduce in 2004 by Bentley Architecture Integrated with others Bentley software Broad range of building tools Supports modeling with complex curved surfaces Multiple support for custom parametric objects Provide scalable support for large projects Large and non-integrated user interface Hard to learn and navigate Less extensive object libraries ArchiCAD Produce by Graphisoft in early 80s Serve MAC platform in addition to Windows Support range of direct interface Contains extensive object libraries Suite interfaces for energy and sustainability OBDC interface Intuitive interface and relatively simple to use Large object libraries Rich suite in supporting applications in construction facility management Only strong BIM product for MAC Limitation to parametric modeling Encounter scaling problem with large project Partition large project to manage them Digital Project Develop by Gehry Technologies Require a powerful workstation to run well Able to handle even the largest projects Model any type of surfaces Support elaborate custom parametric objects Complete parametric modeling capabilities for controlling surfaces and assemblies Relies on 3D parametric modeling for most detailing Steep learning curve Complex user interface High initial cost Limited object libraries (including external) Architectural drawing are not well developed Output section to drafting systems for completion AutoCAD- based Application Architectural Desktop ( ADT) Autodesk original 3D building modeling tool prior to Revit Provide a transition for 2D to BIM Relies on AutoCAD well-known capabilities for drawing production Interface: DGN, DWG, DWF, DXF, and IFC Easy to adopt for AutoCAD user Drafting functionality and interface Not parametric modeling Limited interface to other applications Scaling problem Tekla Structure Offered by Tekla Corp. Multiple divisions: building and construction, infrastructure and energy Support fabrication-level detailing of precast concrete structure and facades Structural analysis Interface: IFC, DWG, CIS/2 DTSV, SNDF, DGN, and DXF Export CNC Model structures that incorporate all kinds of structural materials Support very large model Concurrent operations on some projects Multiple simultaneous users Support complex parametric custom component libraries Too complex to learn and fully utilize Parametric component require sophisticated operators with high skill Not able to import complex multi-curved surfaces Relatively expensive Dprofiler Product of Beck Technologies in Dallas, Texas Provide feedback for construction cost and time User gain a set of drawing with financial and schedule reporting Can input own cost data or data from RS Means Support Sketchup and DWG Interface with Excel and DWG Market as a closed system for feasibility studies before actual design begins Ability to generate quick economic assessments Not a general purpose of BIM tool Purpose is economic evaluation of construction project Interface to support development in BIM Design tools is limited to 2D DWG files As presented above within the existing BIM tools, they provide less supports in sustainable information discipline across the models throughout the whole construction stages. Life cycle assessment in relation to carbon and energy emission Bim-based lca tool There is a high level of demand for sustainable construction due to the rising awareness of climate change and the most important buildings sustainable features are decided at design stage. Designers need to analyses sustainable features including building type, building forms, major materials used, context, MEP system. As mentioned in the previous section, BIM allows for multi-disciplinary information to be combined within one container and it creates a platform for multi-disciplinary to conduct sustainability analyses at construction initial stage. Adopting LCA concept integrate into BIM technology take consideration of low impact building design decision in time, embodied carbon, waste and cost (as shown in Figure 2). The principle of BIM-based holistic modelling in the building lifecycle, LCA can be available in the form of static visualization analysis at design stage whilst its dynamic simulation can be achievable through all stages of construction till demolition. During design phase, associated sustainability issues like energy consumption, carbon emission, waste generation, involved in building design and materials can be accurately quantified on the basis of a unique visualized static 3D information building model. From the phases of construction, to operation and demolition phases, LCA are a dynamic process where building sustainability are being embedded in those phases. For instance, carbon emission and waste production are likely to occur in the boundaries of manufacturing for building construction, maintaining for building operating and routine repairing, as well as recycling and disposing of building components and materials. These dynamic features are suggested to using a simulation approach for analyzing, while popular 4D/5D CAD techniques provide a viable approach to this dynamic simulation. The BIM-based LCA tool is therefore being considered as an enabler for multidisciplinary collaboration across specialty boundaries throughout the building lifecycle. The viability of model-based collaborative work has been verified by an interactive approach targeting on 4D CAD [21]. Planners with different specialties can collaboratively perform planning and 4D simulation underpinned by the 3D model. Similarly, taking the advantage of integrating LCA into BIM can realize optimal design decisions from a holistic perspective in multidisciplinary coalition. Sustainability issues and related costs in HVAC, structure, for instance, in a building can then be examined using the same BIM environment. In this kind of design decision process, the central information repository provided by the BIM model can create a collaboration context for potential stakeholders. Different specialties information in the repository can be accessed not only by information owners but other collaborators. Theref ore, sustainable design decisions on LCA can be made on the basis of informed rather than isolated approaches. The convenience of central information repository from the BIM model also brings the flexibility in applications. Given an online BIM model, distributed LCA application can be available through network support for geographically dispersed stakeholders. Conclusions This document provides authors with basic guidance on how to prepare the full papers. It is highly advised to use the Paper Template or strictly follow the instructions provided. A paper that does not meet the requirements will be returned to the author(s) for revision.