Answer / vinayak

For Better opportunity........

Answer / suraj kumar

because it is a one of the india's no.1 company.It is a well known company and there is lots of growth opportunity.it is a way to enhance our knowledge.

Answer / neelakanta reddy

IT IS A GROWING COMPANY I CHANGE MYSELF TO COMPANY POLICIES
VERY EASILY AND WORK HARD

Answer / gullfam786

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Answer / gullfam786

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What is liquid ratio?

0 Answers   State Bank Of India SBI,

Comment on the RFID Technology in Banking Sector?

0 Answers   State Bank Of India SBI,

Explain retained earnings/ ploughed back profits.

0 Answers  

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  

what is letter of credit

3 Answers   Capital IQ,

Explain the Qualities of a smart investor?

1 Answers  

What is Bonus Dividends?

3 Answers  

Hi...What is CDR. I have been asked this question one of the Tender documents. Sum of Rs.2,00,000.00 is to be pledged to GOVT in form of CDR. So can any one make me under stand what is CDR and how to fulfill the same. Which bank is advisable for making CDR.

5 Answers  

Do you think insurance companies suffer from risks?

0 Answers   State Bank Of India SBI,

full form of sensex?

21 Answers   Accounting, Infosys, RRB, Sensex,

How will your professional help us in the banks?

0 Answers   IBPS,

How is Economy,Industry and Company analysis is carried out by the Fundamental Investor?

0 Answers   Karvy,