Report Requirement
1. Prepare a report for the directors of City Hotel summarising and providing a critical analysis of the results of your evaluation and making recommendations.
2. Making-Distinction-70%+
Provides a concise summary and critical analysis of the results of the project evaluation All Key issues identified with relevant conclusion and recommendations.
3. Making Criteria-Basic Pass- 50%+
Provides a satisfactory summary and analysis of the results of the project evaluation some key issues identified with conclusions and recommendations relevant conclusions and recommendation.
Report Structure
1. Introduction (introduce what is the report is about).
2. Outline of options (This options is attached at the end of report structure because I have been put the options in the Task 4, and this task depends on its).
3. Yamamadori room price recommendation.
4. Summary of results (table) (Also this table is part from what I have done in Task 5A, so its attach at the end of the Report structure).
5. Discussion of results.
6. Discussion of sensitivity tests and risk assessment.
7. Recommendation
(Attachments List)
Outline of Options
1 Basic case
In this stride starting money related circumstance will continue, as before; just there is occupancy expected to decline by 5%.
2 Option 1 (weekend discount)
In option 1 we will do weekend discount to raise occupancy scales.
3 Option 2 (hotel refurbishment)
In this option we will do hotel refurbishment also to improve the level of occupancy by 5%, which estimated value of money $2.5 million.
4 Option 3 (Japanese contract)
This option will rent 100 rooms to Yamamadori for 5 years in way to increase the level of occupancy. The investment cost is $1 million.
5 Option can be combined
In this step we will tray combine some options together to improve the occupancy, so we combine option (2+3)
Summaries of Results (Table)
Items | Capital Cost | ARR | Payback Period | NPV | IRR |
Base Case | Nile | – | – | £5,249.18 | – |
Option 2(Refurbish Hotel) | 2500 | 44.6% | 2.8 Years | £6,587.42 | 27% |
Option 3 (Yamamdori contract) | 1000 | 97.6% | 1 Year | £7,310.13 | 86% |
Sensitivity test Option 3 | 1000 | 76.0% | 1.5 Years | £6,714.50 | 65% |
Option 4
(Refurbishment + Yamamdori) |
3000 | 53.3 | 2.3 Years | £7,619.93 | 37% |
Sensitivity test Option 4 | 3500 | 39.5% | 2.3 Years | £6,524.29 | 23% |
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