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Financial Analysis for Hotels Assignment

   

Added on  2020-04-13

6 Pages1102 Words33 Views
Running head: FINANCIAL ANALYSIS FOR HOTELSFinancial analysis for hotelsName of the studentName of the universityAuthor note

1FINANCIAL ANALYSIS FOR HOTELSTable of ContentsIntroduction................................................................................................................................2Comparison of assessment technique.........................................................................................2Net present value (NPV)............................................................................................................2Internal rate of return (IRR).......................................................................................................3Recommendation........................................................................................................................4Reference....................................................................................................................................5

2FINANCIAL ANALYSIS FOR HOTELSIntroduction The main objective of the report is to assess the investment cost for the major kitchenoverhaul for one of their restaurant of Blue Ribbon Restaurant Group. The general managerwill provide with the details of 5 potential contractors to discuss with them regarding the cost,expenses and cash flows. For analysing various offers from 5 contractors, the trainee will takeinto account various factors like present value of the cash flows, required internal rate ofreturn. Comparison of assessment techniqueThe comparison technique that will be applied to analyse the project from variouscontractor will be the (i) Net present value approach (ii) Internal rate of return ContractorNet present valueInternal rate of returnSupplier A$ 70,669.1027%Supplier B$ 76,221.2036%Supplier C$ 112,052.4644%Supplier D$ 74,030.1333%Supplier E$ 71,813.9132%Net present value (NPV) The net present value is difference among the present value of the cash inflows andpresent value of the cash outflows. For analysing the profitability of any project or anyinvestment, the NPV is used under the capital budgeting. The formula for NPV calculation is–NPV=∑t−1tCt(1+r)t−C0Where, t = number of times in period

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