North Korea Satellite & Rocket Launch Failed

DPRK confirms satellite failed to enter orbit

Pyongyang, April 13 (Xinhua) -- An earth observation satellite launched by the Democratic People's Republic of Korea (DPRK) earlier Friday morning has failed to enter orbit, and scientists and technicians are now looking into the cause of the failure, the official KCNA news agency reported.

The Kwangmyongsong-3 satellite was launched at the Sohae Satellite Launching Station in Cholsan County, North Phyongan Province at 07:38 a.m. on Friday (2238 GMT Thursday), said the report.

"The earth observation satellite failed to enter its preset orbit.Scientists, technicians and experts are now looking into the cause of the failure," it said.

The DPRK's failed launch has aroused international concerns, with the United States, Japan and South Korea all condemning the move, which they viewed had breached relevant UN resolutions.

The DPRK has said that its launch is for peaceful purposes and would not harm the region and neighboring countries.

This still from an Analytical Graphics, Inc., video animation depicts North Korea's Unha-3 rocket and Kwangmyongsong-3 satellite in the last leg of a potential orbital launch in April 2012.
CREDIT: Analytical Graphics, Inc.View full size image
North Korea Rocket Launch Envisioned in Video Animation via @SPACEdotcom

North Korea has launched its long-range rocket but the US, Japan and South Korea say it failed shortly after take-off and fell into the sea. There has been no word yet from Pyongyang on the launch. 

North Korea says the aim of the rocket is to launch a satellite but critics say the launch constituted a disguised test of long-range missile technology banned under UN resolutions.

As the world watches and waits to see if North Korea will continue in its bid to launch a long-range rocket despite international warnings, a new video animation reveals just how the space test could occur.

The new video, released late Wednesday (April 11) by the analytical firm Analytical Graphics Inc., covers North Korea's planned Unha-3 rocket launch, showing the flight trajectory from a point just after liftoff through the separation of its satellite payload.


"AGI has used its software to produce a video demonstrating the launch and its possible path, tracking assets and landing zones," AGI officials wrote in a media alert.

North Korean space officials have said the Unha-3 rocket will launch a new Earth-observing satellite sometime between April 12 and April 16 to honor the 100th anniversary of the birth of Kim Il Sung, the founder of North Korea. Critics of the launch, which include the United States, Japan and South Korea, claim the launch is a cover for a missile test that violates United Nations Security Council resolutions. [Images: North Korea's Rocket and Missile Program]

According to AGI's video animation of the Unha-3 rocket launch, the three-stage booster will blast off from the new North Korean launch site near the northwest village of Tongchang-ri, which corresponds with official statements from North Korea and Western observers. The rocket will then head in a southerly direction and drop its first stage in the Yellow Sea well to the west of South Korea, where officials have said they would shoot down any parts of the Unha-3 territory that threatened to fall on South Korean territory.

The next stage of the Unha-3 rocket would likely fall just to the east of the Philippines after the booster's third stage and payload — the Earth-monitoring satellite Kwangmyongsong-3 — separates and heads towards orbit, the AGI animation shows.

If the Kwangmyongsong-3 satellite reaches its intended polar orbit, its trajectory would carry it over a major stretch of Australia after the spacecraft separates from the Unha-3 rocket, according to the AGI depiction.

North Korea's Unha-3 rocket appears to be a liquid-fueled rocket that stands about 100 feet (30 meters) tall. The Kwangmyongsong-3 satellite, meanwhile, is a boxy, solar-powered spacecraft, according to videos and images in media reports, as well as the AGI video.

Exactly which day of the current window North Korea will launch the Unha-3 rocket is not yet certain, though the country's space organization did begin fueling the rocket for liftoff on Wednesday, suggesting a potential launch attempt in upcoming days, according to press reports.
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Rental Properties: Cash Cow Or Money Pit?

 Investopedia, Contributor

Your home for independent, unbiased financial education on the web.

Real estate investors must have basic valuation skills to make buy, sell, or hold decisions. Real estate investment companies have developed sophisticated valuation models to aid them in making investment decisions. However, by using spreadsheet tools an individual can produce an adequate valuation on most income-producing real estate. This would include residential real estate purchased as residential rental property.

SEE: 3 Ways To Value Real Estate Investments

Valuing real estate using discounted cash flow or capitalization methods is similar to valuing stocks or bonds. The only difference is that cash flows are derived from leasing space as opposed to selling products and services. Read on to find to out how any investor can create a valuation satisfactory enough to weed through prospective investment opportunities.

Individual Valuations

Some individuals feel that producing a valuation is unnecessary if a certified appraisal has been completed. However, an investor’s valuation may differ from an appraisal for several reasons. The investor may have different opinions about the property’s ability to attract tenants or the lease rates that tenants are willing to pay. As a prospective purchaser or seller, the investor may feel that the property has more or less risk than the appraiser. Appraisers are compelled to conduct separate assessments of value. They include the cost to replace the property, a comparison of recent and comparable transactions and an income approach. Some of these methods commonly lag the market, underestimating value during uptrends, and overvaluing assets in a downtrend.

Finding opportunities in the real estate market involves finding properties that have been incorrectly valued by the market. This often means managing a property to a level that surpasses market expectations. A valuation should provide one’s estimate of the true income-producing potential of a property.

Real Estate Valuation

The income approach to evaluating real estate is similar to the process for valuing stocks, bonds, or any other income-generating investment. Most analysts use the discounted cash flow (DCF) method to determine an asset’s net present value (NPV). NPV is the property value in today’s dollars that will achieve the investor’s risk adjusted return.The NPV is determined by discounting the periodic cash flow available to owners by the investor’s required rate of return (RROR). Since the RROR is an investor’s required rate of return for the risks involved, the value derived is a risk-adjusted value for that individual investor. By comparing this value to market prices, an investor is able to make a buy, hold, or sell decision.

Stock values are derived by discounting dividends, bond values by discounting interest coupon payments. Properties are valued by discounting net cash flow or the cash available to owners after all expenses have been deducted from leasing income. Valuing a property involves estimating all the rental revenues and then deducting all expenses required to execute and maintain those leases. (For tips, check out Golden Opportunity For Real Estate Investors.)

All income estimates come directly from leases. Leases are contractual agreements between tenants and a landlord. All rent and contractual increases in rent (escalations) will be spelled out in the leases, as well as options for space and rent concessions. Owners also recoup part or all of the property expenses from tenants. The manner in which this income is collected is also stated in the lease contract. There are three main types of leases:

• Full-service leases
• Net leases
• Triple-net (NNN) leases

In full-service leases, tenants do not pay anything in addition to rent. In net leases, tenants usually pay their portion of the increase in expenses for the period after they move into the property. In triple-net leases, the tenant pays a pro-rata share of all property expenses.

The following are the types of expenses that have to be considered when preparing an income valuation:

• Leasing costs
• Management cost
• Capital costs

Leasing costs refer to the expenses necessary to attract tenants and to execute leases. Management costs refer to property level expenses, such as utilities, cleaning, taxes, etc. as well as any costs to manage the property. Income less operating expenses equals net operating income (NOI). NOI is the cash flow derived from normal operations of the property. Cash flow is then derived by subtracting capital costs from NOI. Capital costs are any periodic capital outlays to maintain the property. These include any capital for leasing commissions, tenant improvements, or capital reserves for future property upgrades. (Check out Closing A Real Estate Deal In A Down Market.)

Valuation Example

Once periodic cash flows are determined, they can be discounted back to determine property value. Figure 1 shows a simple valuation design that can be adjusted to value most properties.

Assumption	Value	Assumption	Value
Growth in Income Yr1-10 (g)	4%	Growth in Income Yr11+ (g)	3%
RROR (K)	13%	Expenses % of Income	40%
Capital Expenses	$10,000	Reversion Cap Rate (K-g)	10%

Figure 1

The valuation assumes a property that creates annual rental income of $100,000 in year one, which grows by 4% annually and 3% after year 10. Expenses are estimated at 40% of income. Capital reserves are modeled at $10,000 per year. The discount rate, or RROR, is set at 13%. The capitalization rate for determining the reversion value of the property in year 10 is estimated at 10%. In financial terminology, this capitalization rate equals K-g, where K is the investor’s RROR (required rate of return) and g is the expected growth in income. K-g is also known as the investor’s required income return, or the amount of the total return that is provided by income.

The value of the property in year 10 is derived by taking the estimated NOI for year 11 and dividing it by the capitalization rate. Assuming the investor’s required rate of return stays at 13% then the capitalization would equal 10%, or K-g (13% -3%). In Figure 2, NOI in year 11 is $88,812. After periodic cash flows are calculated, they are then discounted back by the discount rate (13%) to derive the NPV of $58,333.

Item	Yr 1	Yr 2	Yr 3	Yr 4	Yr 5	Yr 6	Yr 7	Yr8	Yr 9	Yr 10	Yr 11
Income	100	104	108.16	112.49	116.99	121.67	126.54	131.60	136.86	142.33	148.02
Expenses	-40	-41.60	-43.26	-45	-46.80	-48.67	-50.62	-52.64	-54.74	-56.93	-59.21
Net Operating Income (NOI)	60	62.40	64.896	67.494	70.194	73.002	75.924	78.96	82.116	85.398	88.812
Capital	-10	-10	-10	-10	-10	-10	-10	-10	-10	-10	-
Cash Flow (CF)	50	52.40	54.90	57.49	60.19	63	65.92	68.96	72.12	75.40	-
Reversion	-	-	-	-	-	-	-	-	-	888.12	-
Total Cash Flow	50	52.40	54.90	57.49	60.19	63	65.92	68.96	72.12	963.52	-
Dividend Yield	9%	9%	9%	10%	10%	11%	11%	12%	12%	13%	-

Figure 2 (in thousands of dollars)

Figure 2 provides a basic format that can be used to value any income-producing or rental property. Investors purchasing residential real estate as rental property should prepare valuations to determine whether rental rates being charged are adequate enough to support the purchase price being paid. Although appraisers will often use a 10-year cash flow by default, investors should produce cash flows that mirror the assumptions on which the property is assumed to be purchased. This format, although simplified, can be adjusted to value any property, regardless of complexity. Even hotels can be valued this way. Just think of nightly room rentals as one-day leases.

SEE: Real Estate Deal-Breakers That Shouldn’t Be

Buy, Sell or Hold

When purchasing a property, if an investor’s assessed value is greater than the seller’s offer or appraised value, then the property can be purchased with a high probability of receiving the RROR. Conversely, when selling a property, if the assessed value is less than a buyer’s offer, the property should be sold. In addition, if the assessed value is in line with the market and the RROR offers an adequate return for the risk involved, the owner may decide to hold the investment until there is a disequilibrium between the valuation and market value.

Value can be defined as the greatest amount that someone would be willing to pay for a property. When purchasing an asset, financing should not affect the ultimate value of the property because each buyer has different financing options available. However this is not the case for investors who already own properties that have been financed. Financing must be considered when deciding on an appropriate time to sell because financing structures, such as prepayment penalties, can rob the investor of his or her sale’s proceeds. This is important in cases where investors have received favorable financing terms that are no longer available in the market. The existing investment with debt may provide better risk-adjusted returns than can be achieved when reinvesting the prospective sales proceeds. Adjust risk RROR to include the additional financial risk of mortgage debt.

The Bottom Line

Whether buying or selling, it is possible to produce a valuation model accurate enough to assist in the decision-making process. The math involved in creating the model is relatively straightforward and within the grasp of most investors. After gaining some rudimentary knowledge about local market standards, lease structures and how income and expenses work in different property types, one should be able to forecast future cash flows.

READ MORE: Homeowners, Beware These Scams!
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Britain universities in crisis

Universities in crisis as student numbers fall

Colleges that have offered most to poorer students will be biggest losers as impact of fees bites

London: More than 30 universities are facing a 10 per cent fall in student numbers this autumn, according to figures released Wednesday.

A breakdown of next year's university budgets shows that middle-ranking universities and former polytechnics will suffer as a result of the new funding system, which will see tuition fees rise to up to £9,000 a year.

Worst hit, according to the Higher Education Funding Council for England, will be the University of East London and the University of Bedfordshire, which are likely to suffer falls of 12 per cent.

In all, 34 universities in England will have their student numbers cut by at least 10 per cent.

HEFCE estimates there will be 10,900 fewer student places across the country. Academics said it was universities who had done the most to open themselves up to disadvantaged groups that appeared to be suffering the worst cuts.

By contrast, most of the members of the Russell Group – which represents most of the country's leading research institutions – are set to expand student numbers.

Michael Driscoll, chairman of the million+ university think tank and vice-chancellor of Middlesex University, said the overwhelming majority of institutions were losing student places.

"These allocations show the true extent of the Coalition's reform of fees and funding and the cutback in the overall number of university places being funded," he said.

Sally Hunt, general secretary of the University and College Union, added: "At a time when record numbers of people are out of work, the Government should be making it easier for people to access education."

Although overall student numbers have been cut, under the new system universities can recruit beyond their fixed target so long as they take in students with at least two As and a B at A-level.

In addition, 20,000 places have been set aside for higher education providers charging less than £7,500 a year.

As a result, elite universities with a higher percentage of AAB students tend to benefit, as do further education colleges charging lower fees. An extra 65 such colleges are receiving funding for higher education degrees for the first time.

According to HEFCE, just over 10,000 of the 20,000 places for low charging universities have gone to further education colleges. The shake-up appears to have created a "squeezed middle" among universities, which are unlikely to recruit large numbers of AAB students but are still charging higher fees.

Sir Alan Langlands, chief executive of HEFCE, said he did not believe the changes would see universities "going into substantial financial problems". "All of these can cope with this level of reduction," he added. He said they were all "confident they can ride it out". The Independent

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