1st Answer

Introduction: Bharti Airtel refers to one of the leading firms in the telecommunication
industry, and it has been running its operations in the nation since the year 1995. It is
also known as airtel and is a multi-national company that conducts its operations in
eighteen different countries, and this includes South Africa and South Asia too.
It was noted on the Indian stock exchange in the year 2002, and its shares were
detailed at a 40 percent cost. Investors had earned a huge deal of cash back after
that.
A firm needs to raise funds at the least rate of interest in order to include revenues in
its pockets. Increasing money at more excellent rate of interest often causes a
reduction in the profits, and this would disagree with the lasting expansion plan of the
business. Just like all the other firms, Bharti Airtel has also raised funds from various
sources; small loans of business, engagement of investors, and angel investing. Its
headquarters would lie in New Delhi, and its main operations are handled via
workplace.
The sources of funds of a company are huge as the firm has raised money for its
business operations.
In case of Airtel, it has raised money from various sources:
In 2017, Bharti Airtel raised a huge amount of Rs. 4600 crores. The bargain was
made at 0.20 percent of the company. This round was important for the organization
as it underwent a crisis as dependence on Jio interfered with the telecom industry
back then with its very inexpensive plan of data, and various other businesses took a
hit. The financial investment was made by TIAA, and this is an investment company.
The evaluation of the business was estimated to be at around Rs. 23000 crores. The
borrowings of the business were an overall of Rs. 107228 crores. Usually, the more
the variety of loans, the more likely it is that the firm would undergo a situation, yet
this round of investment was important for the company back then. The company
needs to deal with dependence on Jio and ensure that its strategies are affordable.
In 2019, Airtel had raised another Rs. 300 Crores from Pimco. The company had quit
is 0.10 percent of possession with this deal, and the organization was examined at
Rs. 3 lakh crores. The company made use of these funds for different sort of assets,
comprising of firm towers, land purchases, and so on. The remainder of these funds
were made use for advertising. Working with the most incredible song composer in
the country to recommend their brand is rather expensive. However, it ended up
being profitable. Bharti Airtel had acquired many consumers via advertising, and
made it the second largest in the sector after Reliance Jio.
To survive in the market, large organizations raise many funds via various rounds
with different investors. Airtel has also raised its third round by raising around Rs.
3500 crores by surrendering its one percent possession at Rs. 3,50,000 crore
appraisals.
Google is one of the leading companies of technology all over the world and they
have purchased many firms all over the world. In the year 2021, Google had
purchased Airtel and took over 6 percent of the company by making an investment of
Rs. 27,600 Crores. The financial investment of Google in Airtel had valued the
company at 4,60,000 crores, and made it one of the biggest organizations in the
country. The financial investment in Airtel had assisted the business in the
acquisition of 5G rights that were sold by the government. Airtel is one of the
telecommunication companies with 5G rights, and it is ready to introduce its 5G in
the country with Reliance Jio.
It would enable the business to acquire a much more considerable customer based
and reclaim its title as the leading telecommunication company in the country.
Google invested its money in Airtel using the techniques of commercial and equity. It
is the most considerable investment of any organization in these years. The cost of
share was evaluated at Rs. 734 per share and was acceptable to both Google and
Airtel, and the offer was made. The investment was created in the year 2020 during
the corona dilemma. After this financial investment, Google became one of the
considerable stakeholders in Bharti airtel, with a stake of 6 percent in the company.
Google invested in Bharti airtel to make Bharti airtel the leading telecommunications
firm in the country.
Conclusion: To conclude, it can be said that raising money needs a huge deal of
initiative and knowledge. Airtel has shown its capability all over the years, and also
shown its possibility. There was a time in the year 2016, when it was on the verge of
bankruptcy when Jio launched its service plans and made life miserable for different
telecom firms, such as Airtel and Vodafone Idea. Somehow, airtel handled to stand
in front of Reliance Jio and is still conducting operations in the year 2022.
2nd Answer
Introduction:
Year A B
0 -40000 -50000
1 5000 8500
2 12000 15000
3 10000 12000
4 12500 12300
5 10500 10500

Rate of interest is given as 5%

First, let’s calculate the present value for the cash flow of each year for Project A
PV = 5000/ (1+r) ^ n
PV = 5000 / (1+ 0.05 1
= 5000/1.05
= 4,761

Similarly, to calculate the NPV of cashflow for the second year for Project A
PV
2ND Year: 12000/1.05*1.05 = Rs. 10884.35
3rd Year: 10000/1.05*1.05*1.05 = Rs. 8638.37
4th Year: 12500/1.05*1.05*1.05*1.05 = Rs. 10283.78
5th Year: 10500/1.05*1.05*1.05*1.05*1.05 = Rs. 8227.02

So, the NPV for Project A is:

NPV= 8227.02+ 10283.78+8638.37+10884.35 + 4761.90- 40000
NPV Project A = Rs. 2795

Project B
0- -50000
1-8500/1.05 = Rs. 8095.23
2-15000/1.05*1.05 = Rs. 13605.44
3-12000/1.05*1.05*1.05 = Rs. 10366.05
4-12300/1.05*1.05*1.05*1.05 = Rs. 10119.24
5-10500/1.05*1.05*1.05*1.05*1.05 = Rs. 8227.02
NPV = 8095.23 +13605.44 + 10366.05 + 10119.24 + 8227.02 - 50000
= Rs. 412.08

The payback period formula refers to one of the most renowned popular formula that
has been used by the investors to know how long it would usually take to recover
their investments, and it is calculated as the ratio of the total initial investments made
to the net cash flows.
It is easy to calculate
It is easy to understand as it would provide a quick estimate of the time required for
the company to get back the money it has invested in the project.
The length of the project payback period enables to estimate the risk of the project.
The longer the period, the riskier the project becomes. This is because the long-term
predictions are less reliable.
In case of industries where there is a high obsolescence risk, such as the software
industry or mobile phone industry, short payback periods often become a
determining factor to ensure investments.
Payback period formula:
Years before the recovery + Unrecovered amount during the 1 st period / Cash flow
during the payback period to be calculated.
Project A = 4 + 500/10500
= 4 + 0.476
= 4. 04 years.
Project B = 4 + 2200 / 10500 = 4 + 0.209 years.
Using the method of payback period, the money is recovered first in Project A as
compared to Project B.
IIR method-
For project A
NPV= FV0/(1+R)0 + FV1/(1+R)1 +FV2/(1+R)2 + FV3/(1+R)3 + FV4/(1+R)4 +
FV5/(1+R)5
0= -40000/(1+R)0 + 5000/(1+R)1 + 12000/(1+R)2 + 10000/(1+R)3 + 12500/(1+R)4 +
10500/(1+R)5
IRR=7 %
For project B
NPV= FV0/(1+R)0 + FV1/(1+R)1 +FV2/(1+R)2 + FV3/(1+R)3 + FV4/(1+R)4 +
FV5/(1+R)
0=50000/(1+R)0 + 85000/(1+R)1 + 15000/(1+R)2 + 12000/(1+R)3 + 12300/(1+R)4 +
10500/(1+R)5
IRR= 5%
IRR refers to as the inner rate of return. The higher the price of the project return, the
more possibility for higher return from the given project. Project B would give us a
7% return, and on the other hand, Project B is expected to provide us with 5 percent
return.
Conclusion: So, it can be concluded that spending is the most important part of the
company as it is very easy to generate income, but earning money from it is one of
the most important tasks. It would entail various dangers and must be done by
experts and the people who are experienced in the field. Project A also recovers the
money quickly as compared to project B. The NPV for project A is also higher as
compared to Project B.
3RD Answer
3a.
Introduction:
So, following information is given to us:
In the first scenario,
Money to be invested = Rs. 3,00,000
No. of years = 5
Rate = 8
So, the amount of money after 1 year =
3,00,000 + (8/100) * 3,00,000 = Rs. 3,24,000

Amount of money after 2 years =

3,24,000 + (8/100) * 3,24,000 = Rs. 3,49,920

Amount of money after 3 years =

3,49,920+ (8/100) * 3,49,920= Rs. 3.77.913.60

Amount of money after 4 years =

377913.60+ 8/100 *377913.60 = Rs. 4,08,146

Amount of money after 5 years =

4,40,797,68 + 8/100 * 4,40,797,68 = Rs. 4,40,800

In the first scenario,

Money to be invested = 20,000
Time = 5 years
Rate of Interest = 10%

So, the amount of money after 1 year =

20,000 + (10/100) * 20,000 = 22,000

So, the amount of money after 2 years =

22,000 + 10/100 * 22,000 = Rs. 24,200

So, the amount of money after 3 years =

24,200 + 10/100 * 24,200 = Rs. 26,620

So, the amount of money after 4 years =

26,620 + 10/100 * 26,620 = Rs. 29,282

So, the amount of money after 5 years =

29,282+ 10/100 * 29,282 = Rs. 32,210

Conclusion: So, it can be concluded that if Sunil invests Rs. 3,00,000 for 5 years at
an 8% interest rate, he will earn a better amount of compounded money.

3b.
Introduction: A debenture refers to an asset or a kind of bond additionally. It is a
financial obligation instrument that is unsafe. Debentures are issued on the backing
of the reputation and goodwill of the company. It is one of the current financial
obligations that a company makes use of in order to fund its business operations.

In the first scenario,

Current Market Price = Rs. 98.20
Par Value = Rs. 100
Interest Rate = 6%
Current Yield = Annual Interest Payment / Market price of debentures
= 106 / 98.20
= 1.07
The current market price = Rs. 102
Par Value = Rs. 100
Interest = 6%
Current Yield = Annual Interest Payment / Debt current price
= 106 / 102
= 1.039

The overall number of returns that a debenture gets with time is known as the return.
In the above-examples, the first current market value is Rs. 98.20 and the rate of
interest is 6 percent, and the par value is Rs. 100, which by calculation would give a
current yield of 1.07
The second market value is 102, and the rate of interest is 6 percent, and this offers
around 1.039 percent yields.
The market rate in the first example is less than the marketplace cost in the second.
The market rate in the very first instance is 98.20, and its current return is 1.07, and
the market cost in the 2nd example is 102, and its existing outcome is 1.039, which
reveals us that the greater the marketplace cost, the current yield will be reduced
and the lower is the market rate the existing return will be greater.
Conclusion
We can wrap up from the above instances that when the market cost of a bond or
debenture is higher, the current yield is lower, and if the marketplace cost of a bond
is lower, then the existing return is higher. It is shown in the above instances that a
higher market price returns reduced, and a reduced market price yields higher.