Case Study: The Reveton Ransomware Attacks

In August 2012, the Internet Crime Complaint Center (IC3), a partnership between the FBI and the National White Collar Crime Center, was inundated with reports of a new type of cybercrime. Victims across the United States reported that while searching the Internet, their computers locked up, and they received the following message, purportedly from the FBI: “This operating system is locked due to the violation of the federal laws of the United States of America! (Article 1, Section 8, Clause 8; Article 202; Article 210 of the Criminal Code of U.S.A. provides for a deprivation of liberty for four to twelve years.)” The message then accused the victim either of visiting pornography Web sites or of distributing copyrighted content. Victims were told they could unlock their computers and avoid prosecution by paying a fine of $200 within 72 hours of receiving the message. The message came replete with the official FBI logo.

The incident pointed to a steep rise in ransomware attacks. Ransomware is malware that disables a computer or smartphone until the victim pays a fee, or ransom. Unlike other viruses, the Reveton version of ransomware is not activated by opening a file or an attachment. Rather it is an example of “drive-by malware,” viruses that download automatically when a user visits an infected Web site.

The FBI immediately issued an alert, but within a month, cybersecurity experts had identified 16 variants of the ransomware. These viruses had infected 68,000 unique IP addresses. It is estimated that on an average day, about 170 victims paid the $200 fee and received valid unlock codes. The compromised computers could not be fixed through the installation or updating of antivirus software because the computer was locked. Because so many home PC owners fail to back up their systems regularly, many victims faced losing a significant amount of data. The $200 fee itself was low enough to encourage payment. A visit to a professional IT service to repair the damage could potentially cost the same amount and take more time to resolve. A quick payment through a prepaid money card system, such as MoneyPak, could save the victim a lot of trouble.

The United States was not the first country to be hit by these attacks. In early 2012, criminal gangs targeted France, Germany, and the United Kingdom. Ransomware attacks first broke out in Russia in 2009. Since that time, they have spread to almost every country on the globe, hitting the United States and Japan especially hard. Symantec, an IT security company, estimates that gangs are extorting over $5 million per year from online victims. The rise of ransomware attacks is, no doubt, due in part to their success. In France, for example, almost 4 percent of victims coughed up the ransom money during a non-Reveton scam.

The Reveton ransomware is delivered by the popular Russian-language Citadel malware toolkit. The latest version of Citadel can also grab passwords from Web browsers and change Web sites to trick users into handing over their login information.

In December 2012, the United Kingdom arrested three people they believed were involved in the Reveton ransomware attacks. Finding the perpetrators, however, is unusual and is not the most effective way to combat this crime. Law enforcement agencies and IT security companies have urged the public to take

measures to prevent themselves from falling victim to such attacks—by keeping software such as Java, Acrobat Reader, Adobe Flash, Windows, and their browser software updated. An early Reveton ransomware attack made use of a vulnerability in a version of Java that had just been patched a month prior. Computer users can also avoid infections by using security software that identifies suspicious Web sites, and by not clicking online ads from dubious companies. Perhaps, however, the best way to avoid the spread of these attacks is to encourage victims to report the crime and to refuse to comply with the ransom demands.

Questions:

1. Why are ransomware attacks on the rise?
2. What can you do to prevent ransomware attacks on your own computer?
3. How do you think victims should respond to ransomware attacks?
4. Do the victims have an ethical obligation to future victims? If yes, why? If no, why?

For the amusement of the guests, some hotels have elevators on the outside of the building. One such hotel is 300 feet high. You are standing by a window 100 feet above the ground and 150 feet away from the hotel, and the elevator descends at a constant speed of 30 ft/sec, starting at time

t = 0,

where t is time in seconds. Let θ be the angle between the line of your horizon and your line of sight to the elevator.

(a) Find a formula for

h(t),

the elevator's height above the ground as it descends from the top of the hotel.
h(t) =  

  

(b) Using your answer to part (a), express θ as a function of time

t.

θ(t) =  

tan−1(2−t5​)

Find the rate of change of θ with respect to t.

=  

(c) The rate of change of θ is a measure of how fast the elevator appears to you to be moving. At what height is the elevator when it appears to be moving fastest?
h =  

Park Corporation is planning to issue bonds with a face value of $700,000 and a coupon rate of 7.5 percent. The bonds mature in 6 years and pay interest semiannually every June 30 and December 31. All of the bonds were sold on January 1 of this year. Park uses the effective-interest amortization method and also uses a discount account. Assume an annual market rate of interest of 8.5 percent. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided. Round your final answer to whole dollars.) Required: 1. Prepare the journal entry to record the issuance of the bonds. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

2. Prepare the journal entry to record the interest payment on June 30 of this year.

3. What bond payable amount will Park report on its June 30 balance sheet?

A question of interest to game managers is the hunting strategy of predators. Do they just take the first prey that comes along, or are the selective? In a study of winter prey selection in a National Park, radio-tagged wolves were observed to have killed prey according to the table below. Wolves were identified as the predators by their tracks in the snow. At the most recent census in the National Park there were about 3,500 white-tailed deer, 1,000 elk, and 500 moose.

                                                                               Prey Selection by Wolves

Do these data provide sufficient evidence at the a=.05 level that the wolves are not selecting their prey at random? That is, is there evidence that the proportion of deer, elk, and moose killed by wolves are not in the same proportion as in the park population? Justify your response with an appropriate statistical analysis. Using a=.05

Answer:

H₀:

H_a:

a=.05

Rejection region:

Value of the test statistic:

p-value:

State your conclusion:

Milky entered into a contract for the hire of 6 rooms in New Castle Hotel in    Kowloon West. The purpose of the contract was to watch the fireworks gala in the Victoria Harbour on the 1st July (Reunification Day) through the windows of the rooms. Milky planned to invite her close friends and their families to stay in the 6 rooms to enjoy the fireworks. Just two hours before start of the fireworks, the Hong Kong Police Force received a serious threat from some terrorist organizations that they would launch large scale attack to the crowds who gathered to watch the fireworks. The Hong Kong Government immediate ordered the cancellation of the fireworks and gave an order that this kind of gala will not be launched at least for five years. Milky, having already paid a deposit, refused to pay the balance of the room charges. The hotel took legal action to recover the balance.

Required:

Analyse the chance of success by the hotel and explain in detail the legal principles that you base on for analysis.

A common room pricing strategy used by hotels is to price each day for which this room can be reserved, as discussed in the lecture. The price of a stay is then the sum of the day prices spanned by the stay (i.e., checkin and checkout dates). Full-service airlines, as you may already know, typically price itineraries. a. Explain the differences between day pricing of hotel rooms and the pricing of airline itineraries? (i.e. What is the product?, What is the resource?, and What is being priced?) b. Consider the purchase of a customized laptop on Dell’s website. Customization involves choosing laptop components that have different price points. The choice of components determines the ultimate price of the laptop. Explain why the day pricing of hotel rooms is a special case of the problem of pricing laptop components being shown to customers in Dell’s website. c. Why is Dell’s pricing problem more complicated than the pricing problem faced by a hotel?

You have been appointed as the Finance Manager of Shangpuri Hotel Bhd. As a finance manager, you are evaluating Project PJ10B, an investment project, and TWO (2) other additional projects namely Project Bee and Project Cee. You are required to deliver a comprehensive report explaining the application of numerous financial practices for valuing investment projects for the board of directors’ strategic decision. Your finance department has forecasted cash flows to assess the viability of Project PJ10B, Project Bee, and Project Cee incorporating risk into the calculations.

Additional information:

1. Current dividend for Shangpuri Hotel Bhd’s ordinary stock is RM2.50 and dividend growth rate is 6%.

2. Shangpuri Hotel Bhd is planning to issue new ordinary stock at RM50 with a flotation cost of 9%.

3. The company’s bond is paying a 6% coupon payment. Corporate tax stood at 30%.

4. Shangri Hotel Bhd’s capital structure comprising of 40% debt and 60% common stock.

Information related to Project PJ10B

The cost of this investment is RM1,200,000.

The investment is estimated to effectively contribute for 3 years. Ignore the residual value.

Depreciation for the Project PJ10B is subject to a straight-line method.

Further, yearly cash inflow is estimated at $900,000 and cash outflow RM400,000 per year. Cash inflow and outflow in entitle for tax benefit.

Finance department estimates discount factor at 7.0%.

Information related to Project Bee

1. Cost of this investment is RM120,000

2. Finance department estimates discount factor at 8.0%.

3. Ignore tax and depreciation.

Information related to Project Cee

1. Cost of this investment is RM120,000

2. Finance department estimates discount factor at 8.0%.

3. Ignore tax and depreciation.

Required:

QUESTION 1

a. Calculate the cost of new ordinary stock for Shangpuri Hotel Bhd. The current dividend for the ordinary stock is $2.50 and the dividend is expected to grow at 6%.

b. Explain THREE (3) advantages and THREE (3) disadvantages of equity financing.

c. Calculate cost of debt for Shangpuri Hotel Bhd

d. Explain THREE (3) advantage and THREE (3) disadvantages of debt financing.

e. Calculate the weighted average cost of capital for the company

f. Explain FIVE (5) uses of WACC.

QUESTION 2

a. Calculate NPV for Project PJ10B based on discount factor of Shangpuri Hotel Bhd.

b. Calculate NPV for Project PJ10B based on WACC of Shangpuri Hotel Bhd.

c. Calculate IRR for Project PJ10B

d. Explain FIVE (5) conflicts between NPV and IRR

QUESTION 3

a. Calculate expected Annual Cash flow from Project Bee

b. Calculate expected Annual Cash flow from Project Cee

c. Calculate NPV and IRR from Project Bee assuming discount factor stood at 8% & Project Bee’s life span is 6 years.

d. Calculate NPV and IRR from Project Cee assuming discount factor stood at 8% & Project Cee’s life span is 6 years.

QUESTION 4

a. Provide overall recommendation to Shangpuri Hotel Bhd Board of Directors on the viability of

             i. Project PJ10B.

ii. Project Bee.

iii. Project Cee.

(15 marks

b. Prepare an executive summary

Use the code below as the basis for a hotel reservation system (HRS). The customer calls the hotel front desk to book a room. The front desk is running your software on one of its computers. The basic operations available are:

1. book one room,
2. book two adjoining rooms,
3. list all unoccupied rooms,
4. list all occupied rooms,
5. help lists information about available methods,
6. report percent of hotel rooms that are unoccupied,
7. quit the system (shut the system down).

The people at the front desk choose a particular operation, typically in response to a phone call.

Start by modularizing the existing program code below as follows. Create a method from the welcome message (and call this new method from main). Next, create a method from the end message (and also call it from main). Finally, create a method from the help information (and call from main too).

Now we'll implement the methods of the HRS. A new method, bookOneRoom, should randomly book one room when 'b' or 'B' is pressed. Once a room is chosen, it should call bookARoom to indicate that the room is now booked. A new method, bookTwoRooms, should randomly book two rooms when '2' is pressed. It should call bookARoom (twice). Also, write a method that lists (prints out) the room numbers of all of the unoccupied rooms (when the user presses 'l' - lowercase L). Similarly, write a method that lists (prints out) the room nummbers of all of the occupied rooms (when 'L' is entered). Finally, write a method that reports the percentage of the hotel rooms that are unoccupied. This method should use the existing occupiedCount method.

Note: Every method should be preceeded by a comment that explains what the method does.

Summary of what to submit:

A properly commented, indented, and working program.

/*
file:      HRS.java
author:    < your-name-here >
desc.:     Hotel Reservation System (HRS)
*/
import  java.util.Scanner;

class HRS {

    final static int      N = 101;
    final static boolean  Occupied = true;
    //------------------------------------------------------------
    //program initialization
    static void initialize ( boolean[] rooms ) {
        for (int i=0; i<rooms.length; i++)
            rooms[i] = !Occupied;
    }
    //------------------------------------------------------------
    //book a particular room
    static void bookARoom ( int rm, boolean[] rooms ) {
        assert( rooms[rm] == !Occupied );  //cause boom if bad
        rooms[ rm ] = Occupied;
    }
    //------------------------------------------------------------
    //determine how many rooms are occupied in our hotel
    static int occupiedCount ( boolean[] rooms ) {
        int  count = 0;
        for (int i=1; i<rooms.length; i++) {
            if (rooms[i])    ++count;
        }
        return count;
    }
    //------------------------------------------------------------
    //it all starts here
    public static void main ( String[] args ) {
        //say hello
        System.out.println();
        System.out.println( "Welcome to HRS (Hotel Reservation System)." );
        System.out.println();

        boolean[]  hotel = new boolean[ N ];
        initialize( hotel );
        Scanner  kbd = new Scanner( System.in );
        boolean  timeToQuit = false;
        while (!timeToQuit) {
            //prompt for and read a command
            System.out.print( "HRS --> " );
            String  command = kbd.nextLine();

            //process the command
            if (command.equalsIgnoreCase("q")) {
                timeToQuit = true;
            } else if (command.equals("?")) {
                System.out.println();
                System.out.println( "Enter..." );
                System.out.println( "    2     to book two adjoining rooms" );
                System.out.println( "    b/B   to book a single room" );
                System.out.println( "    l     to list all unoccupied rooms" );
                System.out.println( "    L     to list all occupied rooms" );
                System.out.println( "    h/H/? for help" );
                System.out.println( "    p/P   for percent unoccupied" );
                System.out.println( "    q/Q   to quit" );
                System.out.println();
            } else {
                System.out.println( "    Please enter a valid command." );
            }
        }

        //say goodbye
        System.out.println();
        System.out.println( "Thanks for using HRS!" );
        System.out.println();
    }
}

Nakheel is one of the world’s leading property developers, based in Dubai, United Arab Emirates. Nakheel has a portfolio of projects in Dubai across the residential, retail, hospitality and leisure sectors. Master developments include Palm Jumeirah, The World trade Center, Deira Islands, Jumeirah Islands, Jumeirah Village, Jumeirah Park, Jumeirah Heights, The Gardens, Discovery Gardens, Al Furjan, Warsan Village, Dragon City, International City, Jebel Ali Gardens and Nad Al Sheba. In the first quarter of 2017, Nakheel announced its highest annual net profits in the company’s history: AED4.96 billion in 2016 – a 13 per cent increase on the 2015 net profit of AED4.38 billion. Nakheel generated a net profit of AED955 million for the last quarter of 2016 – up 22 per cent on the AED781 million posted for the same period in 2015. All these happened even when real estate market is on lower side.

Explain how mangers take decision under turbulent conditions (risk and uncertainty) which lead to better utilization of resources