$1.$ A Senior executive in the finance function says in a conference call $$Since the new investment which we are planning has a different revenue stream along with the varying cost structure, compared to our legacy business it is advisable to structure it through an SPV$.$ Discuss.

Broad $($Key$)$ points:

SPVs are generally created when the new investment risk characteristics are different from the existing business, so as to have differentiated execution strategies.

E$.$g Specific revenue contracts with customers $($offtake agreements$),$ compared to other projects.

D$/$E different $($higher debt$)$ compared to the normal capital structure of the company.

In the absence of an SPV it might be challenging for the company to consider varying risks for multiple businesses and then design a risk management strategy.