The Basics Of Trapdoor Hacking Information Technology Essay

The Basics Of Trapdoor Hacking Information Technology Essay For a programmer, trap doors make sense. If the programmer needs to modify the program sometime in the future, he can use the trap door instead of having to go through all of the normal, customer-directed protocols just to make the change. Trap doors should be closed or eliminated in the final version of the program after all testing is complete, but, intentionally or unintentionally, some are left in place. Other trap doors may be introduced by error and only later discovered by crackers who are roaming around, looking for a way into system programs and files. Typical trap doors use such system features as debugging tools, program exits that transfer control to privileged areas of memory, undocumented application calls and parameters, and many others. Trap doors make obvious sense to expert computer criminals as well, whether they are malicious programmers or crackers. Trap doors are an easy way to get into a system or to gain access to privileged information or to introduce viruses or other unauthorized programs into the system. Cases In 1993 and 1994, an unknown group of computer criminals repetitively broke into systems on the Internet using passwords captured by password sniffers. Once on the system, they exploited software flaws to gain privileged access. They installed modified login and network programs that allowed them reentry even if the original passwords were changed. In 1996, Philip Myers described the insertion and exploitation of back doors as subversion in his MSc thesis at the Naval Postgraduate School.   He pointed out that subversion, unlike penetration attacks, can begin at any phase of the system development life cycle, including design, implementation, distribution, installation and production. Donn B. Parker described interesting back-door cases in some papers (no longer available) from the 1990s.   For example, a programmer discovered a back door left in a FORTRAN compiler by the writers of the compiler. This section of code allowed execution to jump from a regular program file to code stored in a data file. The criminal used the back door to steal computer processing time from a service bureau so he could execute his own code at other users expense.   In another case, remote users from Detroit used back doors in the operating system of a Florida timesharing service to find passwords that allowed unauthorized and unpaid access to proprietary data and programs. Even the US government has attempted to insert back doors in code. In September 1997, Congress proposed legislation to ban domestic US encryption unless the algorithm included a back door allowing decryption on demand by law enforcement authorities moved famed Ron Rivest to satire.   The famed co-inventor of the Public Key Cryptosystem and founder of RSA Data Security Inc. pointed out that some people believe the Bible contains secret messages and codes, so the proposed law would ban the Bible. More recently, devices using the Palm operating system (PalmOS) were discovered to have no effective security despite the password function.   Apparently developer tools supplied by Palm allow a back-door conduit into the supposedly locked data. Dumpster Diving What is Dumpster Diving? Dumpster diving is a name given to a very simple type of security attack, which is scavenging through materials that have been thrown away, as shown below. This type of attack isnt illegal in any obvious way. If papers are thrown away, it means that nobody wants them, right? Dumpster diving also isnt unique only to computer facilities. All kinds of sensitive information ends up in the trash, and industrial spies through the years have used this method to get information about their competitors. http://oreilly.com/catalog/crime/chapter/f_02_01.gif Dumpster Diving in Process There is another type of computer-related trash that we might not consider. In the system itself are files that have been deleted, but that havent actually been erased from the system. Computers and users used only to save data, not destroying it, and sometimes some data is saved that shouldnt be saved. Electronic trashing is easy because of the way that systems typically delete data. Usually, deleting a file, a disk, or a tape doesnt actually delete data, but simply rewrites a header record. Using MS-DOS, for example, a file can be deleted via the DEL command, however, someone else can retrieve the contents of the file simply by running UNDELETE. System utilities are available that make it easy to retrieve files that may seem to be completely gone. Although there are methods for truly erasing files and magnetic media, most users who work on large systems do not take the time to erase disks and tapes when they are finished with them. They may discard old disks and tapes with data still on them. They simply write the new data over the old data already on the tape. Because the new data may not be the same length as the old, there may be sensitive data left for those skilled enough to find it. It is far safer to explicitly write over storage media and memory contents with random data and to degauss magnetic tapes. Cases One computer company in Texas that does business with a number of oil companies noticed that whenever a certain company asked them to mount a temporary storage (scratch) tape on the tape drive, the read-tape light would always come on before the write-tape light. The ingenious oil company was scavenging the tape for information that might have been put on it by competitors that used the tape before them. Trashing can have deadly consequences. When some old Department of Justice computers were sold off, they had on their disks information on the whereabouts of witnesses in the Federal Witness Protection Program. Although the data had been deleted, it had not been completely erased from the disk. The DOJ was able to get back some of the computers, but not all, and was forced to relocate the compromised families as a result. In 1991, spies posed as garbage collectors outside of a U.S. defense contractor executives home, dug through trash cans looking for information. One of the collectors was actually Frances consul general and claimed he was collecting fill for a hole in his yard. Upon investigation, the FBI determined that this operation was part of a French secret-searching mission, aimed at finding U.S. military or scientific information. Then in 1999, two key members of a group called the Phonemasters were convicted of theft and possession of unauthorized access devices and unauthorized access to a federal interest computer. This international group of cyber criminals had allegedly penetrated the computer systems of MCI, Sprint, ATT, Equifax and the National Crime Information Center. The Phonemasters skills had enabled them to download hundreds of calling card numbers and distribute them to organized crime groups around the world. Part of their method included dumpster diving and collecting old phone books and system manuals. These tools, combined with social engineering, led to the attacks on the mentioned systems. In 2000, in a widely publicized case, the CEO of Oracle, Larry Ellison, hired private investigators to dig through corporate dumpsters at Microsoft. This was an effort aimed at finding information about Microsofts possible development of grassroots organizations to support its side in an anti-trust lawsuit. One of the investigators unsuccessfully tried to pay off a member of the janitorial service in exchange for the garbage of one of these organizations. Ellison held that his actions were a civic duty, to uncover Microsofts secret funding of such groups, but his opponents assert that the incident was distasteful and scandalous. Microsoft complained that various organizations allied to it have been victimized by industrial espionage agents who attempted to steal documents from trash bins. The organizations include the Association for Competitive Technology in Washington, D.C., the Independent Institute in Oakland, California, and Citizens for a Sound Economy, another Washington D.C. based entity. Microsoft said, We have sort of always known that our competitors have been actively engaged in trying to define us, and sort of attack us. But these revelations are particularly concerning and really show the lengths to which theyre willing to go to attack Microsoft. Saying he was exercising a civic duty, Oracle chairman and founder Lawrence J. Ellison defended his company of suggestions that Oracles behavior was Nixonian when it hired private detectives to scrutinize organizations that supported Microsofts side in the antitrust suit brought against it by the government. The investigators went through trash from those organizations in attempts to find information that would show that the organizations were controlled by Microsoft. Ellison, who, like his nemesis Bill Gates at Microsoft, is a billionaire, said, All we did was to try to take information that was hidden and bring it into the light, and added: We will ship our garbage to Microsoft, and they can go through it. We believe in full disclosure. The only thing more disturbing than Oracles behavior is their ongoing attempt to justify these actions, Microsoft said in a statement. Mr. Ellison now appears to acknowledge that he was personally aware of and personally authorized the broad overall strategy of a covert operation against a variety of trade associations. During the year 2001, industrial espionage came to light concerning the shampoo market between fierce competitors Proctor Gamble and Unilever. Private Investigators hired by Proctor Gamble sifted through garbage bins outside of the Unilever corporation, succeeding in gathering viable information about market analysis, predictions and future products.[16] Upon legal action by Unilever, the two corporations settled out-of-court, because these actions broke Proctor Gambles internal policy on information gathering. Logic Bombs What is a Logic Bomb? Logic bombs are small programs or sections of a program triggered by some event such as a certain date or time, a certain percentage of disk space filled, the removal of a file, and so on. For example, a programmer could establish a logic bomb to delete critical sections of code if she is terminated from the company. Logic bombs are most commonly installed by insiders with access to the system. Logic bombs are a malicious programming code that is inserted into a network system or a single computer for the purpose of deleting data or creating other malicious acts on a specified date. A logic bomb works similar to a time bomb because it can be set to go off at a specific date. A logic bomb does not distribute malicious codes until the specified date is reached. How Logic Bombs Work Logic bombs are created by criminals who are well-versed in computer programming and are generally used to perform acts with malicious intent that threaten network security. The criminal acts include setting a virus to be released into a network system or PC at a specified date or other actions such as deleting or corrupting data and completely reformatting a computer hard drive. A logic bomb works through a code that is inserted into existing software on a network or in a computer where it will lie dormant until a specific event occurs such as a date or time or other command from the computer programmer. When the bomb finally releases the code it can delete files, send confidential information to unauthorized parties, wipe out databases, and disable a network for a period of days. Why a Logic Bomb is Used A logic bomb can be used by a disgruntled employee or other IT personnel that has the knowledge of how to program a logic bomb to threaten network security. Other than targeting a specific computer or network system, a logic bomb can also be used to demand money for software by creating a code that makes the software application into a trial version. After a specific period of time the user must pay a specified sum of money to continue to use the software. Logic bombs can also be used for blackmail and if the demand is not met, the logic bomb will detonate into a computer system or network to destroy data and perform other malicious acts that are included in the command codes. Logic bombs are fairly easy to create if you have a lot of knowledge in computer programming and they do not replicate like other malicious programs. For this reason, logic bombs are usually targeted to specific victims and will not spread to unintended victims. A logic bomb can be rather difficult to detect, however you can take security measures such as constantly monitoring the network system for any suspicious activity, using antivirus applications and other scanning programs that can detect any new activity in the data on a network system. The scanning systems should also monitor the entire network and the individual computers connected to the network. Cases A former system administrator for UBS PaineWebber, Roger Duronio, was charged in a New Jersey federal court on charges of sabotaging two-thirds of the companys computer systems. His alleged motive was to undermine the companys stock price and make a bunch of money in the process. He is alleged to have shorted over 30,000 shares of UBS stock prior to unleashing his attack which means the potential was there to make 30,000 times the amount by which the stock dropped when the media got wind of the attacks. In a recent stock manipulation case involving Emulex, shares fell 50 percent. Based on the trading range of UBS PaineWebber stock at the time of Duronios alleged attack, it is reasonable to say his profits could have exceeded half a million dollars. The flaw in Duronios alleged scheme was the obviously unexpected ability of UBS PaineWebber to prevent news of the attack getting out. This was quite a feat on the companys part because the logic bombs activated on about 1,000 of its nearly 1,500 computers and the malicious programs did actually delete files. Indeed, the company says attack cost it $3 million. In the end, the federal grand jury charged Duronio with one count of securities fraud and one count of violating the Computer Fraud and Abuse Act. Duronio was hit with up to 20 years in prison and fines of more than $1.25 million. In September 1990, Donald Burleson, a programmer at the Fort Worth-based insurance company, USPA, was fired for allegedly being quarrelsome and difficult to work with. Two days later, approximately 168,000 vital records erased themselves from the companys computers. Burleson was caught after investigators went back through several years worth of system files and found that, two years before he was fired, Burleson had planted a logic bomb that lay dormant until he triggered it on the day of his dismissal. Burleson became the first person in America to be convicted of harmful access to a computer. In early 2009, Timothy Allen Lloyd was sentenced to 41 months in prison for leaving behind malicious programs that deleted critical data from the servers of Omega Engineering, a high-tech measurement company that claimed the cost of the attack was $10 million. According to a report in the National Computer Security Association section on CompuServe, the Orlando Sentinel reported in January 1992 that a computer programmer was fined $5,000 for leaving a logic bomb at General Dynamics. His intention was to return after his program had erased critical data and get paid lots of money to fix the problem. In 1995, a disgruntled computer security officer at an insurance brokerage firm in Texas set up a complex series of Job Control Language (JCL) and RPG programs described later as trip wires and time bombs. For example, a routine data retrieval function was modified to cause the IBM System/38 midrange computer to power down. Another routine was programmed to erase random sections of main memory, change its own name, and reset itself to execute a month later.

Comparing Clay Dilham in Up the Slide with Gary Paulsen in A Glow in the Dark Essay

The main character of â€Å"Up the slide† is Clay Dilham who is a young prospector. He decided to get a sled-load of firewood in half an hour. After a hard struggle, he succeeded. The main character of â€Å"a glow in the dark† is Gary Paulsen who ran an eight-dog team in an unknown and dark forest. A strange light frightened him but he finally found what the light was. Both of Clay and Gary have great courage but Clay is braver than Gary. Clay faced a more dangerous situation and more difficulties. First, Clay was very young who was only 17 years old and became a young prospector who traveled to a hostile environment. † The Yukon Territory is located in the northwestern corner of Canada. It is part the subarctic zone, where temperatures have been known to plunge to -80F! †(p315). It is really hard for people to survive in such terrible environment, especially for a 17-year-old teenager. Most of teenager at that age are sitting in a warm classroom and receiving good education. But Clay as a young prospector worked in such terrible place. So he must have great courage and is really very brave. Second, during his trip, he could die every second if he lost his caution. â€Å"A slip at that point meant a plunge over the edge and a twenty-foot fall to the ice. A hundred feet farther along, and a slip would mean a fifty-foot fall. †(p316). It was really dangerous and difficult for people who wanted to survive. For Clay, a young prospector didn’t have so much experience. So he would not expect such a difficult but he keeps being calm it must be his bravery and great courage to support him solve all these difficult problems. Gary faced a less dangerous situation than Clay. First, the ghost and other terrifying things were all created by his imagination. It means that they couldn’t create any physical danger for him. â€Å"Ghosts and goblins and dark nights and snakes under the bed and sounds I didn’t know and bodies I had found and graveyards under covered pale moons and death, death, death †¦Ã¢â‚¬ ¦Ã¢â‚¬ (p323) These imaginary things will not make him die at once but in â€Å"Up the slide â€Å" if Gary has a momentary oversight, he will die at once. So the situation that Gary faced is less dangerous than the situation that Clay faced. But he still felt very terrified and didn’t know what to do at that moment. So Clay is braver than Gary. Second, the motivation that pushed Gary to go forward is his curiosity, not his courage or bravery. â€Å"But curiosity was stronger. My legs moved without my wanting them to move and my body followed them. †(p323) Although Gary still went forward with great fear, he didn’t have strong belief like Clay that had great courage to go forward. So Clay is braver than Gary. In conclusion, first Clay faced a more dangerous situation than Gary. Second, Clay had to overcome both physical and metal fear but Gary only needed to overcome his imagination. Third, Clay was always calm but Gary didn’t know what to do when they faced frightening things. So Clay is braver than Gary. When students face some difficulties like problems they can’t solve, keeping calm is always the best solution. So they will come up some good ideas and solve the problem successfully.

The Debate Over Nozick s Experiment Thought Machine

I. Introduction In what may seem a harsh generalization, I would like to begin by considering the likelihood that a Christian would commit suicide? On first inclination we know that they would not because they perceive suicide to be a sin. Even with a less nuanced version we know that in spite of the belief of heaven and a perfect afterlife there has not been a wide scale mass extinction of Christians any time lately. In asking a person this it is more than likely that they would likely they were being played a joke on. My point is to say, in a sense, this is similar to why we see time and time again philosophers in debate over Nozick’s experiment thought machine. We see philosophers like Nozick advocate that a life plugged into the machine is not in fact a life at all, and that if people were to be given the option to stay plugged into this machine that provided them endless bliss they still would not take it. If the question of why would a person not chose to plug into the experience machin e is not clear, I once again bring up the idea of a Christian committing suicide, which may people may find incredulous. Why is it that it would be incredulous for a Christian to chose to live another life of more happiness, yet it would not be so for someone to plug into Nozick’s own experience thought machine? If Nozick’s experience machine ultimately offers happiness through a chosen series of experiences and the gist/selling point of heaven is that there everything you would wantShow MoreRelatedGame Theory and Economic Analyst83847 Words   |  336 Pagesthe theoretical understanding of games is presented as relevant to the analysis of economic behavior. However seductive it may seem, this saga is nonetheless deceptive. To look a little closer, the bonds that connect Von Neumann’s mathematical thought to economic theory are more fragile, and partially contingent. The applicability of strategic games, in the sense of the 1928 article, is obviously not limited to the domain of economics. The connection between the minimax theorem and the saddle

Loneliness and Desire for Companionship in the Play A Streetcar Named Desire Free Essay Example, 1000 words

One of the fundamental determinants of the play is a romance and realism that provoked by the desire to have companionship (Page 419). Blanche takes streetcars that were named "Desire and Cemeteries. " This was a symbolic act and like the French's "la petite mort, " the racing of the cars symbolized the run towards Blanche's final destination (Hezaveh 56). The play, therefore, uses imagery, and figurative actions approach to exemplify its central theme. One of the fundamental determinants of the play is a romance and realism that provoked by the desire to have companionship (Page 419). Blanche takes streetcars that were named "Desire and Cemeteries. " This was a symbolic act and like the French's "la petite mort, " the racing of the cars symbolized the run towards Blanche's final destination (Hezaveh 56). The play, therefore, uses imagery, and figurative actions approach to exemplify its central theme. However, Blanche appears to be living in her world full of pretence and lies. Sh e asserts her loneliness in broad daylight but pretends to be a woman of a different social class whom Stanley and partying friends were far from her reach. We will write a custom essay sample on Loneliness and Desire for Companionship in the Play A Streetcar Named Desire or any topic specifically for you Only $17.96 $11.86/page Her encounter with the partying group that she describes them as dirty and uneducated reveals her prejudice and negative attitude despite her consistent efforts to remain relevant in the love affairs and kill loneliness. In contrast, Stella is portrayed as a person who enjoys others companionship. Her case is a self-fulfilling relationship adventure in companionship with her husband, she enjoys both the darkness and the light. She has nothing t hide, life appears to be real and nothing treats her badly unlike what Blanche thinks of her husband.

The Necklace by Guy de Maupassant - 898 Words

It is the material world that has created Madame Loisel and it is the material world that destroys her. Her desire for expensive objects and the circles where they are found generated by the capitalistic system she lives in rather than by any character flaw, lead her to make a foolish request of a friend. When she loses the diamond necklace, she too is lost. Her relationship with her friend, as well as any hope for a return to the glittering world of the reception, is shattered. She is destroyed not by spiritual failure but by an economic system that has created a superstructure that will not allow her a better life. She is trapped by material circumstances, and the final revelation about the false jewels deepens her sense of alienation and powerlessness. In Guy de Maupassants short story The Necklace, we are given a clear picture of a society that has unequally distributed its goods or even the means to achieve them. Madame Loisel has no commodity or skills to sell, only her youth and beauty to be used to attract a husband. Without access to those circles where she can find a man with wealth and charm, she is doomed to stay in a powerless situation with no way to approach the elegant lifestyle that she desires. The material circumstances of her society have relegated her to a dreary existence from which she can find no exit. Her husband is so conditioned to accept the situation that he does not understand her hunger to be a part of a more glamorous and elegant world.Show MoreRelatedThe Necklace By Guy De Maupassant863 Words   |  4 PagesThe short story â€Å"The Necklace† written by Guy De Maupassant, tells the story of a married couple who live an average lifestyle together in France—when one day everything in their lives changes due to a simple decision. The author aims to show the reader the power of decision making when faced to decide between needs, wants, honesty and untruthfulness and how every decision we choose to make affect our lives in ways we never thought possible. In the first few lines of the story, the narrator introducesRead MoreThe Necklace by Guy de Maupassant1034 Words   |  5 Pagesregret which Guy de Maupassant depicts throughout â€Å"The Necklace.† Guy de Maupassant, a French writer, born in 1850, was considered one of France’s greatest short-story writers. His writings were mostly influenced by the divorce of his parents when he was thirteen years old and by great writers such as Shakespeare, Schopenhauer, and Flauber. His parent’s divorce caused his stories to depict unhappiness of matrimony, deceit, miscommunication, and a profound misunderstanding (Maupassant, Guy de, 1850-1893)Read MoreThe Necklace by Guy De Maupassant1367 Words   |  6 Pagesâ€Å"Being Honest is Always Best† Telling the truth will always prevent future conflicts. Author Guy De Maupassant who lived from 1850 to 1893 proves in the story of â€Å"The Necklace,† that no matter how bad a situation is, speaking with the truth is always best. Now, this author does not prove this theme directly. Instead, throughout various situations in the story the main characters are faced with a long-term conflict because decisions were not made with honesty. Mathilde and Loisel who is her husbandRead MoreThe Necklace, by Guy de Maupassant791 Words   |  4 Pagescharacterized by other people. In â€Å"The Necklace† Mme. Loisel is a beautiful woman with a decent life, and a husband that loves her, and only wants to make her happy. She is not rich but she makes it along, she insists of a better, wealthier life. When her husband gets her invited to a ball, she feels the need for a brand new fancy dress and tons of jewelry. When the couple realizes they cannot afford jewelry as well, they searc h out to borrow her friend, Mme. Forestiers’ necklace. She comes to notice she noRead MoreThe Necklace, By Guy De Maupassant966 Words   |  4 PagesIn Guy De Maupassant’s â€Å"The Necklace,† Mathilde is a 19th century French woman who desires a wealthier lifestyle than she can acquire. She is completely indulged in the material possessions of life and is focused on the items she does not have rather than what she owns. It seems her happiness is entirely dependent on wealth and status. She neglects her husband and is never content with what he can offer. Eventually, Mathilde’s struggles of envy, selfishness, and materialism drive her to poverty.Read MoreThe Necklace By Guy De Maupassant934 Words   |  4 Pagesduring this time period was Guy de Maupassant, who wrote one of the most influential short stories of this century. â€Å"The Necklace†, written by Guy de Maupassant, illustrates elements of fiction such as the symbolism of the necklace be cause of Mme. Loisel’s desire to be rich, irony due to the twist ending, and a powerful theme. Firstly, the necklace Mme. Loisel borrows and her perspective symbolizes the desire she has towards being wealthy and important in society. Maupassant describes effectively theRead MoreThe Necklace By Guy De Maupassant1381 Words   |  6 Pagesstories are â€Å"The Necklace† by Guy de Maupassant and â€Å"The Secret Life of Walter Mitty† by James Thurber. â€Å"The Necklace† was about a materialistic woman who faced consequences because of her envious personality and â€Å"The Secret Life of Walter Mitty† was about a man who experienced daydreams randomly throughout the day. Although both short stories used literary elements, Guy de Maupassant utilized them for readers to understand and enjoy the story more than James Thurber. â€Å"The Necklace† was a short storyRead MoreThe Necklace By Guy De Maupassant1093 Words   |  5 PagesThroughout the short story titled â€Å"The Necklace† by Guy de Maupassant, it is clear that the main themes being stressed are pride versus greed, and that things are not quite what they appear. Each of these things are represented throughout the story in some way, whether it be using animated language or symbolism. It is also clear that background information clearly aided the development of the themes Maupassant incorporated throughout the passage. It is seen throughout the story that the main characterRead MoreThe Necklace, By Guy De Maupassant999 Words   |  4 PagesIn Guy de Maupassant’s â€Å"The Necklace,† readers experience Mathilde Loisel’s life-changing event. Coming from nobility, de Maupassant tells the story of luxurious desire through the eyes of the middle class woman Mathilde. Mathilde constantly dreams of living the life of the upper class, and this prohibits her from acting in reality. Mathilde’s internal struggle for a sense of social royalty shows readers how quickly selfish pride destroys a person’s life. Throughout the course of â€Å"The NecklaceRead MoreThe Necklace By Guy De Maupassant1019 Words   |  5 PagesIn the short story of â€Å"The Necklace†, the author Guy de Maupassant is a creative and intriguing tale which reveals a person s dreams of a luxurious lifestyle with countless materialistic possessions. He has skillfully developed the story into a mystery which reveals itself at the end. The main point in the story is that materialism can distort your view of happiness and fulfillment. It is wrong to be materialistic to the extent that you disregard what you already have and lose everything. Mathilde

Short Term and Long Term Financing Free Essays

Short Term Finance What is Short Term Financing? Short term financing is basically refers to additional money for a business which requires for running its business for short terms which is usually a period of one year. There are some sources of short term finance which are as following:- Overdraft Overdraft bank basically means a facility that the bank provides to its customers where the customer is given permission to draw money from the banks in surplus of their balance in their heir bank accounts. When taking overdraft from the bank, the account must be zero to get extras extension of money and the interest rate will be very high and we have to pay back the bank in a very short period of time. We will write a custom essay sample on Short Term and Long Term Financing or any similar topic only for you Order Now Trade Credit Trade credit refers to buying products and servicers of a business which needs in the course of its business on credit, depending on the trade practices prevalent in a particular industry, the nature of the business relationship between the supplier and the company may give a different time period to pay the products and services they buy from different suppliers. Exactly as companies get their credit from their suppliers, they must also give credit to their customers. The customers are given 50 to 60 days to pay up the bills. After 60 days, interest will be applied on the customers. If the customers are unable to pay, the will be asked for installment plan. Bank Loans Bank Loan means loans which are given to banks which need to repaid their installment over a fixed period of time which may be short or long term period. Even though it is called bank loans, these loans can be move forward by banks or other financial institution. Usually loans like this are generally given for a certain reason such as purchases of capital equipment. Advantages/ Disadvantages of Short Term Finance Short term financing is a method to raise funds which involves financial responsibility that is needed to be repaid within a year or less. Short term financing is flexible and a fast way for companies to obtain working capital for their daily operations. The main disadvantage is that a company may be too dependent on short term funds and threatened to high banking fees and interest rate. This will may affect the profit margins. Speed Short-term loans can be achieved much fast and easier compared to long-term financing. Lenders will not make through an examination of the company’s account for short-term lending compared to the case they do for long-term loans. Medium size companies do not have large amount of cash and are vulnerable to sudden financial shocks such as non-payment by a key debtor. Flexibility Small companies usually have seasonal variations in the cash and need access to capital over that period. Overdraft protection is one of the form of short term finance where the bank agrees to pay the company’s cash withdrawals, checks, and electronic debits to a certain limit. The lender will charge a fee for this facility on any balance outstanding. The cost of short term finance may be lesser compared to the long term finance where the cost may be higher. Drawback to this type of short-term finance flexibility is that the bank can withdraw the overdraft protection in a short notice. Risk Market circumstances, such as retreat, may cost the small businesses into borrowing a large amount on a short term basis. Short term finance can be a risk factor for the borrower A short term loan can be renewed by the lender on a certain terms than the original contract. This does not only cause the businesses to face a high cost of capital, it may not be able to service the amount of debt collected. This will put the company in a weak position where it could cause the company to be bankrupt. Management Lenders who extend their short term financing does not involve themselves in the business decisions about capital investment. Long-term finance is associate by the number of provisions, such as caps on the salaries of the companies principals or limits on other financial arrangements, which will restrict the business actions. Long-term Finance What is long-term finance? Long term finance is basically holding an asset for a long period of time. Providing the type of security and a long-term asset can be hold as short as 1 year or as long as 25 years or more. Long-term finance also means funding which are obtained for a time frame exceeding the duration of one year. When business borrows money from a bank using long term finance methods, it will be expecting the loan to be paid back more than one year. Example, making payments on a 20 year mortgage. Long -term finance are usually for expansion of new markets, purchases of assets such as machinery, land and buildings and business growth through the acquisition of other businesses or properties. Its types of long term finance are as following :- Venture capital Venture capital is becoming an increasingly important source of finance for growing companies. Venture capitalists are generally very wealthy groups of companies or individuals which specifically set up for investment in developing companies. Venture capitalists are usually on the look out for companies with have potential. They are ready to offer money to help businesses to grow, in return the venture capitalist get some ownership of the company as well as share in the profits made. Venture capitalists usually are prepared to take projects which have a high risk and which some banks might not wan to get involve in. The advantage of this might be heavier because the possibility of the businesses losing some of their independence in making a decision. Example of venture capitalists who are also called as private equity firms are Hermes Private Equity Debentures If a company wants to borrow a big amount of money for a long but fixed period of time, it can borrow from the general public by issuing loan certificates called Debentures. The total amount borrowed is divided into units of fixed amount. These are debentures are usually offered to the public to subscribe in the same manner as it is done in the case of shares. A debenture is issued under a seal of the company. It is written for acknowledgement of money borrowed. It also specifies the terms the terms and conditions such as security offered, rate of interest and time repayment. There few types of debentures which are as following :- 1. Redeemable debentures and irredeemable debentures Redeemable debentures These are debentures which are repayable on a pre-arranged date or any time depending to their maturity provided the company wish and gives a notice to that effect. Irredeemable Debentures These irredeemable debentures are also called perpetual debentures. A company is not bounded to repay the amount during the period of time given. If the issuing company fails to pay the interest, it has to reclaim such debentures 2. Convertible Debentures and Non-convertible Debentures Convertible Debentures The holders of these convertible debentures are given the options to convert their convertible debentures into equity shares and ratios as decided by the company. Non-Convertible Debentures These non-convertible debentures cannot be converted into shares Mortgage Mortgage is a loan specifically for the purchase of a property. Usually businesses do not buy property through a mortgage. Mortgages are usually used as a security for a loan. This tend to happen with smaller businesses. Example, A sole trader running a florist shop might want to shift to a larger premise. They will find a shop with a price of $100,000. To give this sort of money, the bank will want to have some sort of security as a guarantee that if the borrower cannot pay back the money to the bank, the bank will be able to get back their money. The borrower can use their own property as a security for the loan, it is called taking out a second mortgage. If the business is not able to pay back the bank the loan then the bank has the right to take the house and sell it to recover their money. Using mortgage this way is a good way of rising finance for small businesses but it also carries a big risk. Advantages/ Disadvantages of Long-term finance Stability If we have a long term financing, that means we have a stability and no need to search for financing often compared to short term financing. This also means that it will be easier to project our cash flows and earnings as we will know our expenses every month. Short term financing does not offer these advantages, because we have to constantly renegotiate the terms of our agreement. Cost of Capital Having a long term financing gives us a better idea of the long term cost of capital. By this way we will have a better understanding on which projects are worth pursuing or not. IF we don’t have long term financing in place, our cost of capital may change all our negotiation of our terms. This will lead us to more confusion in figuring out what kind of profitability we are looking for in a project. Differences between short term and long-term finance Duration Most of the short-term financing occur over short period of one year, even though some of the sources can last up to three years or more. However long-term financing is like home mortgage which usually have a longer period of time up to 30 years. Interest Short-term financing is repaid over a short period of time, the interest cost to borrow the money will be smaller. However, long-term sources such as Bank loans which have high interest rate due to the amount of time taken to repay the capital. Types Short-term and long-term sources of financing differ in instrument type. Example of short-term sources includes leases, short-term commercial loans, account payable and bank overdraft coverage. However example of long-term sources includes retained earnings, finance leases, venture capitals and company shares Which one is more preferable to choose short term or long-term finance? Conclusion, it would be generally be better to choose short-term loan over a long term finance if the school Halls Creek High school budget allows it. This will increase the monthly payments as much as possible to take advantage of the lower interest rate. The combination of bigger the monthly payment and smaller interest rate will allow the school to have a bigger payment on the outstanding balance. This will help the school to pay less interest on the loan taken and end their mortgage sooner. . How to cite Short Term and Long Term Financing, Papers

Life After Retirement Essay Example For Students

Life After Retirement Essay LIFE IN RETIREMENT A PAPER PRESENTED BY GBOLAHAN I. OYEGOKE (PRINCE) B. Sc. (Ed. )Econs. , MBA (Mktng. ) ABR, ACTI, ACA HEAD OF PRACTICE Gbolahan Oyegoke Co Chartered Accountants AT THE POST RETIREMENT SEMINAR ORGANISED BY T. A. AMUSSAH SONS LIMITED (CONTRACTOR TO CHEVRON NIGERIA LIMITED) DECEMBER 6, 2006 PREAMBLE Retirement simply refers to the fact of stopping work because you have reached particular age or set criteria. Such criteria may be health, performance at work, conduct, options, takeover etc. Retirement can be delightful or devastating†¦ a dream come true or a dreadful nightmare. It depends on how one prepares for it. In Nigeria, the private sectors have a relatively better reputation for taking seriously their obligations to retiring and disengaging employees through the prompt payments of severance benefits and gratuities. Happily and commendably, the uncertainties, poor-record keeping, frustration and trauma which are common feature of pensions and terminal gratuity payments in the public service continues to be very minimal in the private sector. However, after putting 40 – 45 years of ones productive age in service of one company or the other, a research finding revealed the following: |Situation/Position at 65 years and above |Rating | |Very rich |1% | |Financially independent |4% | |Struggling to survive |5% | |Died in Service |36% | |Dependent |54% | |Total |100% | This trend could be traced to failure or deficiency in human capital development of many organizations. Corporate organizations often spend huge sum of money on capacity building that will benefit their business while neglecting the need for empowerment for â€Å"life after retirement† of their employees. In other words, corporate organization does not prepare their employees for retirement, from commencement or date of employment. Until very recently, post-retirement education was considered as personal issue of the retiring individual. There is a need for change towards this attitude as retirement or disengagement (forced or voluntary) is REAL. CHARACTERISTICS OF EMPLOYMENT You are always in financial need and this makes you depend on and look forward to your salary. †¢ You are under constant threat and fear of losing your job or being desolate. †¢ Prior to your retirement, you would have invested the most profitable prime time of your life in employment for a â₠¬Å"take home†. †¢ Often, you are in a company of over 90% of other employees returning to the work they hate to go to, and to see faces they are not too comfortable to put up with. †¢ You are compelled to live in a vicinity and neighbourhood you wouldn’t have chose to live in as your employment location has always determined where you live – if you will not be late to work. Your employer determines your leisure time and how to spend it. As a necessity, they must approve your leave/vacation time. They determine when you leave home, when you get back home, when you wake up and when you go to bed. In some cases, they determine when you procreate. †¢ Employment hardly makes your rich and your employer is not responsible for making you rich anyway. †¢ What you get paid as retirement benefits hardly cover your living expenses at old age. Most of the time, we allow our employers to plan (when and how) for our retirement. †¢ Most importantly, you r capacity to earn declines over time. You get to a certain age, you will be consider unemployable (experience, or lack of it). It is important that we remind ourselves that this seminar is organized for retiring employees who may not have had the benefit of pre-retirement enlightenment. We shall therefore concentrate on what is required of them to remain happy and comfortable, even while in retirement. In our clan and environment, there is always fear of retirement. To an average Nigerian, whether in self or paid employment, retirement connotes failure; it brings torment; it is consider shameful; it is often seeing as failure; many view it as weakness, especially if it is the decision of a self-employed person; many consider it as punishment; others sees it as bad luck; it simply remind us of loss of power and influence. We often get agitated and often raise questions on: †¢ What will I do after retirement? Where will I live in retirement? †¢ I do not have retirement plan, so how do I survive in retirement? †¢ Though I have a retirement plan, what if it fails? While the views above are fallaci es, the fear, the questions and many other issues often lead to criminal act such as fraud, stealing, falsification of age etc. THE DONT’S OF RETIREMENT Several private sectors retired and disengaged employees who were well and promptly catered for on retirement have ignorantly and recklessly slipped into the poverty circle within a very short period of their severance. This may be avoided if we attempt to desist from any of the following acts: a)Desire for new wife/(wives) The Progressive Era EssayYou must also resolve any differences that may exist between you and your extended or large family. Verily, verily I say unto thee, be friends to everyone in your family, you will need them now than ever and they need you. Boredom and loneliness breath depression and this may lead to stress, stroke etc. b)Be at peace with your GOD You certainly have less time to live than you have stayed on mother earth. Now that you are drawing nearer to your God, it is important that you resolve issues with your God. Forgive God for whatever, you consider unfair to you and forgive yourself of any short-coming in your life. Forgive your fellow human being for their â€Å"sin†. Pay attention to your religious tenets. c)Be Active Choose a retirement activity you really enjoy. It can be a part-time job, working as a volunteer, a hobby, or even a sport. Make that activity the focus of your life. It is wonderful to be able to spend time doing something you really like. Exercise regularly. It is good for the body and also for the mind. Exercise helps reduce tension and anxiety, and provides a sense of physical well-being. Eat healthfully. At age one to forty, we eat for taste and at forty and above, we are to eat for our health. Stayed tuned into the world around you. It is important to stay mentally alert. Newspapers, books, magazines, and television shows can keep you up to date on the issues of the day. Do maintain your physical and mental independence. For as long as your health and finances allow, try to handle your own affairs, do things for yourself, and live by your own schedule. Never be pushed by the expectation of others. Draw from your inner strength when personal or family trouble arises. You spent a life time learning the strategies of survival. Use your knowledge to help others. Do keep your sense of humour. Make small mental lists of jokes you can tell to friends. â€Å"Laughter is the best medicine†. Laugh, the world will laugh with you. Grump, and you will grump alone. d)Prepare your WILL Speak to a trusted lawyer and seek his advice on WILL. Preparation of will nsures that you set your house properly the way you want it to be when you might have gone to rest with your creator. It helps you to protect your household against themselves. Enjoy your birthday! Growing old is not a right, it is a privilege. Take good care of yourself for you may live more than you e xpect. INVESTMENT IN RETIREMENT The gratuity of any retiring individual has several competing necessities, needs and frivolous requests which we consider important now and in the nearest future. It is an established fact that our reasons for keeping cash and the volume kept can be broadly classified as: †¢ Transactional: we keep cash to meet up with our day-to-day needs (not want). Precautionary: we also keep cash to meet up with emergency needs that we do not envisage. †¢ Speculative: cash can also be kept to meet with â€Å"opportunities† that has returns which we consider satisfactory. In this light and as retiring persons, my humble counsel would be as follows: 1. Ensure you put in fixed deposit account, a sum that is not less than =N=2million or 33. 33% (whichever is higher) of your gratuity at a rate not less than 9%. This will assure you of minimum income of =N=15,000. 00 per month. 2. About 33. 33% may be set aside for investment in shares. You will need to secure the service of a stockbroker with integrity to manage your investment. 3. The balance of your gratuity may be apportioned to unit trust fund, investment in your spouse’s business, investment in your hobby (if you are sure it is capable of yielding good returns), investment in your current business, if any etc. At any point that you require to make investment decision it is important that you seek the advice of professionals. Ensure to document and legalize your transaction, no matter the partner you are dealing with. I pray that you will live longer than your expectation in prosperity and good health. God will grant you mercy and favour in your future endavour. Thank your for your time and audience while I beseech you to â€Å"keep thinking†.