Answer / guest

Core banking is a general term used to describe the services provided by a group of networked bank branches. Bank customers may access their funds and other simple transactions from any of the member branch offices. It will cut down time, working simultaneously on different issues and increasing efficiency. The platform where communication technology and information technology are merged to suit core needs of banking is known as Core Banking Solutions.

what is the difference between a cash flow statement and a funds flow statement?

3 Answers  

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how financial and instututional development affects financing of large and small firms? Are the financing patterns of small firms different from those of the large firms?

0 Answers   Infosys,

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What does the government do to curb the revenue deficit?

0 Answers   State Bank Of India SBI,

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Difference between Vote on Account and Interim Budget?

1 Answers  

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These days Mutual Funds are common in the market. What do you know about them?

0 Answers   IBPS,

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Read the case given below and answer the questions given at the end. Krutika Designers Ltd is an Indian company engaged in designing shirts for an international shirt manufacturer. Its operations are currently restricted to designing shirts for the Indian market. The firm is interested in extending its operations to the European markets, but is restricted by its lack of knowledge about the latest fashions and trends prevailing there. Hence, the firm has decided to open an office in Finland for establishing a network in Europe that will give the firm access to the needed information. The firm feels that its does not have the capability of sustaining itself in the foreign markets in the long-term, and will be able to generate additional revenue from these activities only for the next 5 years. After that, the Finnish office will have to be closed down. The firm anticipates an initial investment of Rs.14 million. The project is expected to generate the following cash flows over the 5 years period. Year Cash flow (Finnish Marks) 1 2 3 4 5 10,00,000 20,00,000 50,00,000 50,00,000 30,00,000 These cash flows are expressed in terms of today’s money. The firm can claim depreciation in India according to the Straight Line Method. The salvage value from the project is expected to be nil. The Finnish Government does not provide any incentives for foreign investments. However, currently it is making an attempt to have better economic ties with India. Hence, it has decided to extend a loan of 50,000 marks to Krutika Designers. The loan will be at a concessional interest rate of 7%. The loan is to be repaid in 5 equal annual installments which will include the interest payments. The project will generate additional borrowing capacity of Rs.5 million for the firm. However, as the firm does not have any firm contract with the international shirt manufacturer, its domestic revenues are expected to be very volatile. Therefore, there is no surely that the firm will be able to absorb the tax benefits arising out of depreciation and additional borrowing capacity. The firm does not intend to indulge in any illegal money transfers. The current spot rate for the Finnish Mark is Rs.7.25/FM. The inflation rates in India and Finland for the next 5 years are expected to be 8% and 3% respectively. The exchange rate is expected to move in tandem with the inflation rates. Indian tax rate is 35% while Finnish tax rate is 40%. India and Finland have entered into a tax treaty whereby the earnings of the residents of one country are taxable in that country only. In India, the nominal risk-free interest rate is 11%. The same is 6% in Finland. The Indian nominal interest rate (including risk-premium) is 15%, while that in Finland is 9%. The nominal all-equity rate in India is 18%. 1. Comment on the financial viability of the project. 2. What are the different circumstances in which nominal all-equity discount rate and real all equity discount rate should be used for discounting the cash flows? Explain the rationale behind it. 3. Comment on the financial viability of the project if the firm is sure about being able to absorb the tax benefits arising out of depreciation and increased borrowing capacity. 4. Explain the concept of exchange risk and how it affects an international project. 5. How can the financial structure of a project be used to overcome repatriation restrictions? What are the additional benefits of such maneuvers?

0 Answers  

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What is NP?

15 Answers   Lombard, Satyam,

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present i am studying mba but basically i am from science background i completed my graduation with bsc.biotechnology wat to say for question why you change your stream ? how can fulfill the requirements of job?

1 Answers   DSK Supinfocom, eClerx, Infosys,

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Tell me about yourself in variety way

5 Answers   Accenture, Birla Sun Life, Wipro,

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hi this is renuka i also face an interview in syndicate bank po of 23 aug 2009 plz suggest me the expected question what may they ask to me. my email id is renuka.ahlawat@gmail.com

0 Answers   Syndicate Bank,

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what is the difference between PROVISION & RESERVE ?

3 Answers   Capital IQ, FactSet Systems, HDFC, IQ,

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Explain the role of SEBI?

0 Answers   State Bank Of India SBI,

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