environment is under constant threat as a result of modernisation Essay Example For Students

environment is under constant threat as a result of modernisation Essay The environment is under changeless menace as a consequence of modernization, concern activities, changeless growing and development. All these are human activities that affect the immediate environment. The depletion in natural resources particularly by the oil and gas companies such as the Pipeline Product Marketing Company ( PPMC ) has resulted in serious environmental impacts. Therefore, the demand for sustainability and sustainable development can non be overemphasized as it has become more of import over the last two decennaries ( Micheal A ; Lan, 2000 ; Carbon Trust, 2008 ; Hahn, 2001 ; Cunningham et al. , 2005 ) . These histories for the increasing force per unit area on authoritiess to develop a response to a assortment of jobs which range from the usage of natural resources to pollution control. In response, assortment of environmental protection statute law and ordinances were formulated with the purpose of protecting the environment ( Powley, 2004 ; IEMA 2005 ) . The add ition in natural resources ingestion between 1961 and 1990 by 25 % every 10 old ages resulted in serious environmental impacts in the signifier of acerb rain. This leads to raising sourness in the dirt and H2O thereby doing harm to forest harvests, and freshwater fish and wildlife. Methane emanation and excavation waste, oil spills, air pollution by sulfur dioxide, nitrogen oxide and C dioxide as a consequence of burned coal, oil or gas including clime alteration are besides causes of environmental impacts ( Micheal A ; Lan, 2000 ; Edwards, 2000 ; Jaccard, 2005 ) . PPMC is a subordinate of the Nigerian National Petroleum Corporation owned by the Federal Republic of Nigeria. The company is involved in oil processing, production and selling. PPMC was established to offer first-class client services by transporting rough oil to the Nigerian three refineries every bit good as traveling white crude oil merchandises to bing markets. Its chief aim is to productively and expeditiously mark et refined crude oil and petrochemical merchandises in the domestic market every bit good as in the ECOWAS sub part and besides provide Marine services ( PPMC, 2009 ) . Outline1 Investing Undertaking2 Annual cost of fuel and care ( Runing cost ) .3 Entire cost of investing4 Annual nest eggs5 PAYBACK Time period6 Payback period7 Payback period is 2years 6 monthsA8 Net PRESENT VALUE ( NPV )9 INTERNAL Rate OF RETURN ( IRR )10 NPV1 = 124, 707,000 118, 800,000 = + 5, 907,00011 NPV2 = A A 113,864,000 118,800,000 = 4,936,00012 A A A A A A13 A A14 A A A A A A A A A A A A A A A A A A A A A A A A A A A A A IRR=20.7 %15 NON FINANCIAL FACTORS16 SUGGESTIONS/DISCUSSIONS AND CONCLUSION. Investing Undertaking The PPMC s monitory and review section has 36 vehicles, a vehicle in each of the 36 provinces of Nigeria. The vehicles are used as official autos by staff in order to travel mediate their offices, terminal and filling Stationss and proctor and inspect their day-to-day operational activities. Each auto covers 100s of kilometers day-to-day due to the long distance between their office, make fulling Stationss every bit good as terminals which are located far out of the metropolis for environmental intent. Every auto consumes about 50 liters of gasoline per twenty-four hours. However, it is environmentally unfriendly as they pollute the environment with C emanations. The company has set a mark to drastically cut down or if possible to halt fouling the environment. Therefore, the senior direction wants to carry through a feasible undertaking with a length of 4 old ages, to better their environmental public presentation and upgrade its corporate societal duty. This undertaking is expected to be a non-profit undertaking that could convey many nest eggs to the company and return the initial investing in 3 old ages in order to avoid hazard. The determination of anticipating the payback period of 3 old ages was made by the senior direction after careful consideration of the company s payback standard which is 5yrs. PPMC has a criterion of judging all its investings objectively, so as to find whether the payback period is good or bad thereby go throughing an nonsubjective opinion as to cognize if the investing is worthy to be taken or non. Reducing or halting the sum of gasoline that is used during their day-to-day activities, will back up the company to obtain good corporate image and cost nest eggs as each liter of gasoline is N65 ( Naira ) . In add-on the company spends an norm of N25, 000 monthly for care on every auto. PPMC is sing a great loss of resources as a consequence of this high gasoline ingestion every twenty-four hours at that place by fouling the natural environment. The vehicles have been used for about 6 old ages which has exceeded its warrant period of 1 twelvemonth. They are being used at maximal degree as PPMC operates mundane including weekends and public vacations due to their nature of work and immense demand for their supply. The company is presently passing N52, 920,000 yearly seeking to keep and fuel the old vehicles. The dislocation of these disbursals is shown below: Annual cost of fuel and care ( Runing cost ) . This includes running cost of fuel, fixs and monthly cheques. Monthly cost of fuel = 50 ten 36 ten 30 ten 65 = N3, 510,000 Annual cost of fuel = N3, 510,000 ten 12 = N42, 120,000 Monthly cost of care = N25, 000 ten 36 = N900, 000 Annual cost of care = N900, 000 ten 12 = N10, 800, 000 Entire Annual Expenditure = N42, 120,000 + N10, 800, 000 = N52, 920,000 In order to work out the above mentioned issues, PPMC direction have decided to replace the old vehicles with trade name new electric autos. These electric autos use neither gasoline nor Diesel, they have zero emanation and their lone by merchandise is H2O. The auto is known as Honda FCX Clarity, it is a Fuel Cell Electric Vehicle ( FCEV ) . This vehicle has worn the universe green auto award, during the 2009 World Cars Awards in Newyork. This award has upgraded Honda s corporate image by exposing its committedness towards a green environment. In add-on, Honda already has an first-class history of environmental leading as they are known to be industries of low emanation vehicles under an improved regulative demand ( Honda, 2009 ) . It is rated by the Union of Concerned Scientists ( UCS ) as the greenest car shaper for four different times in a row ( UCS, 2007 ) . The auto generates electricity through the V flow fuel cell stack and shops it by the usage of its extremely efficient Li ion battery, which helps retrieve energy. It besides monitors electrical flow through its power thrust unit and propels the vehicle ( Honda, 2009 ) . Honda FCX Clarity has an improved safety steps such as the Vehicle Stability Assist ( VSA ) , Collision Mitigation Braking System ( CMBS ) , six air bags and a unit organic structure construction that is good reinforced. It besides has a ocular and audio qui vive which alert the driver in instance of any possible hit. Another safety safeguard programmed in the vehicle is the suggestion of the driver by the automatic jerk of the place belt in instance of an ineluctable accident it minimises the velocity by interrupting force to cut down the impact of hit. Furthermore, it has a really strong electric motor every bit good as groundbreaking new fuel cell stack. These safety steps have been tested by the United States Federal Safety Standards and it was a success narrative ( Honda, 2009 ) . The purchase of Honda FCX Clarity by PPMC will show the company s committedness towards the decrease of Co2 emanation thereby protecting the environment. The company will besides be recognised as the f irst to present zero emanation autos to Nigeria and it will function as a solution that could convey cost nest eggs. The Baroque Era Essay PaperFurthermore, PPMC will show good operations within a safe and clean environment thereby making a friendly environment for staff and the populace ( Edward, 2004 ) . This will assist screen out societal affairs and better wellness and safety. Since, the electric autos have a extremely improved safety steps that could supply ways of pollution control to protect the people and their environment ( Edward, 2004 ) . The company could besides profit from alterations within the administration, by presenting this environmental enterprise that trades with environmental impacts such as clime alteration and planetary heating caused by their emanations ( Murray, 2003 ) . In add-on, it will back up the company to place and understate its impacts on the environment so as to heighten its corporate societal duties through the usage of an alternate beginning of energy. This will non merely advance their concern environment but will advance the planetary environment at big. Buying the zero emanation vehicles will pave manner for the administration to accomplish sustainable development since it is a scheme that could see maximal public-service corporation of resources. In add-on, the undertaking is non aimed at net income devising but returning of initial investing. SUGGESTIONS/DISCUSSIONS AND CONCLUSION. The rate of involvement at which the investing cost leads to investing benefit is known as the IRR. This means that, all investing additions are with the clip value for money and at the involvement rate, the investing has a nothing NPV ( ACCA, 2008 ) . This investing assessment has demonstrated the usage of IRR to value the hard currency flow and raise it as a effect of the investing while finding it with rising prices ( ACCA, 2008 ) . For illustration, a higher mark rate of return was chosen, so that even in a state of affairs where the rising prices rate rises the company will still salvage cost. Interest rate may lift to 15 % during the life clip of the undertaking due to the increasing rising prices rate in Nigeria, as history has shown that Nigerian base rate rises up to 0.45 every twelvemonth. Therefore, hazard is incorporated and the undertaking is considered less hazardous. The IRR is 20.7 % , this has shown a really good hazard border sing the Nigerian economic instability. Furthermore, the advantage of the IRR being 20.7 % is that, even if the involvement rate increases the undertaking will still be economically good. Base rate of the Central Bank of Nigeria was used to find the cost of capital and cipher the initial NPV. The base rate was besides used to integrate rising prices by dismissing hard currency flows to acquire the hereafter value. Inflation alterations value for money, this is the chief ground for utilizing the base rate in finding the price reduction factor for the NPV computation. Two price reduction rates were used to work out the equation of IRR which assumes that NPV alterations with price reduction rate but this is non the instance in world. The positive consequence of the NPV means that the undertaking should be accepted and the chosen price reduction rate of 15 % helped place the existent value of the nest eggs to be made, based on the fact that the undertaking is anticipated to do an overall nest eggs. However, the existent value of IRR is more of import as it considers the current economic clime and the future involvement rate of Nigeria. The consequence has shown that the I RR is higher than the mark rate of return. It is of import to observe that, base rate is used to find NPV non IRR while IRR assumes that NPV is zero. The nest eggs to be realised by PPMC as a consequence of the new enterprise every bit good as the indicant of an attractive Payback period upon investing is clearly exposed. Payback period 2 old ages 6 months is a good payback period since, the standards requires payback of the initial investing in 5yrs. Hence, it would hold been a bad payback period if it exceeds 5years. Furthermore, PBP was used to back up other informations because it is non plenty to function as standards for investing. The company will go on to profit from the undertaking for old ages even after returning the initial investing. PPMC could see utilizing a different price reduction rate for this undertaking since it is aimed at put to deathing an environmental undertaking and non gain doing. This assessment has been exhaustively evaluated and has proven that the investing is sensible ( Mclaney, 1994 ) . Since, the company will pass merely N65, 880,000 more on the one-year care cost ( 52, 920,000 ) and salvage N52, 920,000 in the first twelvemonth and more in the subsequent old ages at the same clip halting the C emanations from the old autos. In add-on, it is a mandatary for the company to run into up the authorities s demand to cut down environmental impact and comply with the prevalent statute law. If the administration was non to put in this undertaking the money would hold been channelled to the federation history and budgeted to put to death other undertakings in other sectors or Nigerian ministries. However, PPMC has the authorization to utilize any sensible sum to better its environmental public presentation or put to death any feasible undertaking that will be good to the administration. Finally, the computation resulted in a less price reduction rate where NPV1 became positive and a greater price reduction rate where NPV2 remain negative and IRR fell in between the two price reduction factors ( ACCA, 2008 ) . The 3 investing assessment techniques were to the full utilised to find the undertaking s viability. This has proven that the undertaking is economically feasible ( Mclaney, 1994 ) . In position of this, the investing assessment is low-cost and worthy of credence. Furthermore, the purchase of the electric autos is the best option, as it will non merely cut down C emanations but will halt the emanations from the old vehicles wholly, thereby upgrading the company s image every bit good as heightening its overall environmental public presentation.