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According to the requirements, it has been analyzed that the job of sales and marketing department is more interesting and thus I have chosen to work in the sales and marketing department of the company. This opportunity would help the employee to achieve bigger in future.
In the given case, Rose Garden Hotel case study has been analyzed and it has been investigated that how Rose Garden Hotel is managing its expense through various methods. In this report, various issues of the hotel have been solved through the budget analysis, buy or rent decision analysis and market analysis. According to this case, the issues of the company have been solved on the basis of various methods.
According to the study over Rose Garden Hotel, it has been investigated that this hotel has 2 alternatives which are either buying the machineries or take the machineries on rent from market. According to the evaluation, it has been analyzed that this hotel has a budget of $ 45,000. And the hotel is required to make a buy or rent decision on the basis of that (Weygandt, Kimmel & Kieso, 2009).
According to the study over various articles and books, it has been analyzed that it is always a good option for the companies to buy the product for the operations and the activities of the company (Bromwich and Bhimani, 2005). Because through buying the machineries, the ownership come into the hands of the organization and the organization could use the machineries whenever it want. Further, it has been depicted by Sadler (2003) that buying decision could be a drawback of the company as it doesn’t allow the comapny to make the alternations into the machineries whenever required.
Further through analyzing the various other articles, it has also been analyzed that the renting option could also be in the favour of the company as it allows the company to replace the machinery whenever it is wanted by the company. Consequently, it has also been found that renting decision could be a drawback of the company as it doesn’t allow the comapny to use the machineries in any manner and the company is required to take extra safety of the machineries (Macintosh and Quattrone, 2010).
According to the above evaluation and calculation over the case, it has been evaluated that the renting option is way better as the company is required to pay only $ 12,395 if the machineries would be taken on the basis of the rent whereas if the buying option would be considered by the hotel than it would have to pay $42,355 in total. So, it is good for the company to reduce the expenses and take the machineries and equipments on rent rather than buying it.
BUY OPTION | RENT OPTION | |||||||
| COST | Discounted Residual Value | Servicing | Total Cost over 3 years | Discounted Value | Discounted Value | Discounted Value | Total Cost over 3 years |
Treadmill (3 pieces) | $17,985 | $571 | $600.00 | $18,014 | $1,806 | $1,722 | $1,643 | $5,170 |
Elliptical Trainer (2 pieces) | $8,000 | $254 | $600.00 | $8,346 | $926 | $883 | $842 | $2,651 |
Exercise Bike (4 pieces) | $13,200 | $419 | $600.00 | $13,381 | $829 | $790 | $754 | $2,373 |
Rowing Machine (1 piece) | $2,700 | $86 | $600.00 | $3,214 | $769 | $733 | $699 | $2,200 |
TOTAL COST | $41,885 | $1,330 | $2,400 | $42,955 | $4,329 | $4,128 | $2,295 | $12,395 |
In next case, net present value of the hotel has been evaluated to analyze the new project of the company and total profit from that project. This evaluation has been done to find out the total profit of the company in next 3 years. this case depict that hotel is planning to start a new gym for the guest and the visitors of the hotel and the management has decided about two projects out of which one plan depict that the membership must be basic and second plan depict that the membership must be offered according to a full package (Ansari, 2004). Through the study, it has been evaluated that the total profit, inflow and outflow would be different of both the projects (Weygandt, Kimmel and Kieso, 2009).
Further, through the calculations, it has been analyzed that the total NPV of this project would be $3,97,217 which is way higher and it depicts about the total profit which would be got by the company. This depict that this project would be a good investing opportunity for the hotel. Atrill & McLaney, (2006) depict that it is a good option for the companies to invest into such projects which offers the high NPV.
Thus according to the evaluated result of these projects, it is suggested to the hotel to invest the amount into this project to manage the performance and profitability of the company (Berger, 2011).
Membership (Basic 39/month, Full Package 80/month) | |||||||
Membership Project | Cash Outflow | Cash Inflow | Net Cash Flow | Tax | After Tax CF | PV Factor | NPV |
Year 0 | $38,000 |
| -$38,000 | -$11,400 | -$26,600 | 1 | - 26,600 |
Year 1 | $800 | $2,20,000 | $2,19,200 | $65,760 | $1,53,440 | 0.925925926 | 1,42,074 |
Year 2 | $800 | $2,36,120 | $2,35,320 | $70,596 | $1,64,724 | 0.85733882 | 1,41,224 |
Year 3 | $800 | $2,53,676 | $2,52,876 | $75,863 | $1,77,013 | 0.793832241 | 1,40,519 |
NPV |
|
|
|
|
|
| $3,97,217 |
A business is required to look over various promotional activities and events to promote its business in the market. In this case, hotel is planning to do some promotional events to manage and maintain the marketing level high of the hotel’s product into the market. Further, this also depict that a manager is required to look over various activities and planning as well as various products which would help the company to manage the promotional event in a good manner.
Further, according to the given case, the promotional activities have been evaluated over the company to analyze that how the good promotion could be done by the hotel to manage the business in the market (Ansoff, 2007). According to the given case, a wellness centre has been started by the company and company wants to do some promotional event to promote the business. Hotel could take the help of various promotional sources to promote the new project (Ward, 2012).
In this report, various items which would be required to handle the event in a proper manner. The quantity of each item has been set according to the event and it has been analyzed that in which amount these items must be purchased by the company to manage the budget and the profit of the company.
According to the case, the following budget has been prepared for the promotional activities and the event of the hotel. The price has been decided according to the market situation and it has been analyzed that the total expenses would be lesser than the budget of the company.
Promotional Budget | |||||
Item | Price(excl GST) | GST | Price (incl GST) | Quantity Required | Total Budgeted Value |
The Brisbane times (Quarter page strip) | 1132 | $113.20 | $1,245 | 1 | $1,245 |
Digital foyer advertising (weekly rate) | 250.00 | $25.00 | $275 | 5 | $1,375 |
Bus shelter poster (trail panel) | $550 | $55.00 | $605 | 3 | $1,815 |
Digital Billboard (medium) | 2500.00 | $250.00 | $2,750 | 1 | $2,750 |
Printed Billboard | $600 | $60.00 | $660 | 3 | $1,980 |
Flyers | $295 | $29.50 | $325 | 8 | $2,596 |
Retail advertising | $358 | $35.80 | $394 | 8 | $3,150 |
TOTAL | $5,685 | $569 | $6,254 | 29 | $14,912 |
Thus according to this study, it has been found that various opportunities are always available for a business to manage the profitability and position in the market. In this case, 3 issues of the company have been analyzed in which the company has dilemma to choose one project from two projects which would offer more return to the company.
In first case, buy or rent dilemma has been faced by the company in which the company has two choice either to buy the machineries from the market or renting the machineries.
According to the evaluation, it is good for the company to reduce the expenses and take the machineries and equipments on rent rather than buying it.
In second option, net present value of the hotel has been evaluated to analyze the new project of the company and total profit from that project. This evaluation has been done to find out the total profit of the company in next 3 years. According to the evaluation, it is suggested to the hotel to invest the amount into this project to manage the performance and profitability of the company.
Lastly, the promotional activities have been evaluated over the company to analyze that how the good promotion could be done by the hotel to manage the business in the market.
Ansari S. 2004. Management Accounting: A Strategic Focus. Houghton Mifflin College Devision.
Ansoff, H. 2007. Strategic management. Springer.
Atrill, P. and McLaney, E.J. 2006. Accounting and Finance for Non-specialists. Pearson Education.
Berger A. 2011. Standard Costing, Variance Analysis and Decision Making. GRIN Verlag.
Bromwich, M. and Bhimani, A. 2005. Management accounting: Pathways to progress. Cima publishing.
Sadler P. 2003. Strategic Management. Kogan Page Ltd.
Turner J. and Thayer J. 2001. Introduction to Analysis of Variance: Design, analysis and Interpretation. SAGE.
Ward, K. 2012. Strategic management accounting. Routledge.
Weygandt J., Kimmel P., Kieso D. 2009. Managerial Accounting:Tools for business decision making. John Wiley and sons.
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