Hahndorf Hotels Pte Ltd has a liability of $40 million due in 4 years. The company makes uses of leases to operate and the bulk of the firms assets are held in cash. The cash balance on the balance sheet as at the end of December 2021 reflects cash of $32 million.

You may assume a flat term structure of interest of 6% per annum.

Critically analyse the firms approach to managing its assets and liabilities and assess the potential risks if any.

600 words