Flag Question 1 (FORTY (40) marks) In classes, we have discussed the need to understand the separation of the two roles of shipowners of being 'owner/investor' and/or 'operator' in shipping finance in order to comprehend the various sources of shipping finance, which allows shipowners to formulate and deploy 'off-balance-sheet financing' on the one hand and 'cash-in' owned ships while maintaining the operational control of the ships on the other. In addition, we have also explained one of the most important sources of shipping finance, namely 'special purpose vehicle', is driven by its two special features - 'off-balance-sheet financing and cash-in' and 'tax-related issues'. Requirements: (a)(i) In your own words and understanding, discuss and explain in details, together with your own clear, specific and generic diagrammatic framework and its main and important elements therein, to demonstrate how the separation of the two roles of 'owner/investor' and 'operator' can help shipowners and managers form 'special purpose vehicle' to effectuate the deployment of 'off-balance-sheet financing' on the one hand and 'cash-in' owned ships while maintaining operational control of the ships on the other. (6 marks) (a)(ii) In your own words and understanding, elaborate and explain in details the main and important elements in the generic diagrammatic framework for 'special purpose vehicle. (4 marks) (a)(iii) In your own words and understanding, discuss and explain in details the most critical pre-requisites to ensure the successful implementation of 'special purpose vehicle' according to the generic diagrammatic framework. (4 marks) (b) On the basis of 'off-balance-sheet financing and cash-in', choose two most relevant and appropriate sources of shipping finance of 'special purpose vehicle' relating to 'off-balance-sheet financing and cash-in' that we have discussed in classes. (b)(i) In your words and understanding, elaborate and explain in details with your own clear and specific diagrams to demonstrate how your two chosen sources of shipping finance of 'special purpose vehicle' that adopt the separation of their two roles of 'owner/investor' and 'operator' in order to formulate and deploy 'off-balance-sheet financing' and 'cash-in' owned ships while maintaining operational control of the ships. (6 marks) (b)(ii) In your own words and understanding, discuss and explain in details the most critical pre-requisites to ensure the successful implementation of your two chosen most relevant and appropriate sources of shipping finance of 'special purpose vehicle' relating to 'off-balance-sheet financing and cash-in'. (4 marks) (c) On the basis of 'tax-related issues', choose two most relevant and appropriate sources of shipping finance of 'special purpose vehicle' relating to 'tax-related issues' that we have discussed in classes (c)(i) In your words and understanding, elaborate and explain in details with your own clear and specific diagrams to demonstrate how your two chosen sources of shipping finance of 'special purpose vehicle' that are associated with and driven by 'taxrelated issues'. (6 marks) (c)(ii) In your own words and understanding, discuss and explain in details the most critical pre-requisites to ensure the successful implementation of your two chosen most relevant and appropriate sources of shipping finance of 'special purpose vehicle' associated with and driven by 'tax-related issues'. (4 marks) (c)(iii) In your own words and understanding, choose one of the two most relevant and appropriate sources of shipping finance of 'special purpose vehicle' relating to 'taxrelated issues' to discuss and demonstrate in details how your chosen most relevant and appropriate source of shipping finance of 'special purpose vehicle' relating to 'tax-related issues' that confers relatively better tax benefits as compared with mortgaged back loan. (6 marks)