pb4uski
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
You're certainly entitled to your opinion.
Let me ask you this. The day after the person spends their entire stash of $1m to buy a life annuity with a nice $4,500 monthly payment for life, they approach you for a 15 year, $200,000 loan. The only cash flow they have is from the life annuity but they can easily make the loan payments of $1.700 a month from the annuity cash flow. The life annuity is their only asset. How much are you willing to lend them? Why?
I would also dispute your characterization of the DTA. If the increase in the profit forecast was beyond reason, it would probably not be accepted by their auditors and the DTA would not be recognized. Been there, done that. Much, much more than the stroke of a CFO's pen.
Let me ask you this. The day after the person spends their entire stash of $1m to buy a life annuity with a nice $4,500 monthly payment for life, they approach you for a 15 year, $200,000 loan. The only cash flow they have is from the life annuity but they can easily make the loan payments of $1.700 a month from the annuity cash flow. The life annuity is their only asset. How much are you willing to lend them? Why?
I would also dispute your characterization of the DTA. If the increase in the profit forecast was beyond reason, it would probably not be accepted by their auditors and the DTA would not be recognized. Been there, done that. Much, much more than the stroke of a CFO's pen.