Answer / manastosh kumar singh

Enron collapsed because it was losing money and had been
doing so for a long time. Enron lost money because its
management made some disasterous decisions. Typically these
disasterous decisions were from over-and-unjustified
confidence in their ability to manage. They went into risky
fields where they had no experience and failed, failed
miserably. They developed an expertise in disguising and
covering up these failures, but ultimately these financial
failures showed up on the bottom line. The relevant failings
of the Enron management was mismanagement, their crimes had
to do with violating rules and not with greed according to
the dictionary definitions. However, the dictionary
definitions are defective because what people have in mind
in the use of the term greed is an inordinant desire for
wealth leading to a violation of moral or legal rules. No
one classifies the Beatles as being greedy even though they
made a lot of money and consciously put forth effort to do
so. Ivan Boesky made a lot less money than the Beatles but
he was classified as being greedy because he violated the
rules. The salaries and stock options received by the Enron
management were set by the board of directors of the
corporation. They may have been high, particularly in
relation to the quality of the management performance, but
they were not what produced the collapse of Enron. The
illegal acts were carried out to stave off collapse rather
than what caused the collapse. The collapse came as a result
of management errors, management errors that were driven by
unjustified overconfidence.

What is the meaning of refinance?

0 Answers   Nabard,

---

What is white label ATM

0 Answers   RBI,

---

Explain liquid ratio/ acid ratio/ quick ratio.

0 Answers  

---

What is current GDP of India?

0 Answers   Nabard,

---

What is the role of SEBI in Economy?

0 Answers   SEBI,

---

1. Find the number, when 15 is subtracted from 7 times the number, the result is 10 more than twice of the number 5 15 7.5 4

1 Answers  

---

What Is The Ssm Framework Regulation And Why Is It Necessary? To Whom Does It Apply?

0 Answers  

---

Explain the Weak-form, semi-strong from and strong-from of Effiency?

0 Answers  

---

differencess betwen operating expencess an differed revenue expenditure.

2 Answers  

---

What Is Convertibility Clause?

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 the difference b/w acquisation by subsidy & acquisation by a company?

0 Answers   Capital IQ,

---