Project Report: Accounting Analysis of Rose Garden Hotel Finances

This project report analyzes the financial strategies of the Rose Garden Hotel. The report examines key aspects such as buy-or-rent decisions for machinery, budget analysis, and market analysis to improve profitability. Task 1 evaluates whether the hotel should buy or rent machinery, concluding that renting is the more cost-effective option. The report also includes an analysis of promotional activities and the net present value of potential projects. The conclusion emphasizes the importance of financial management for business success. The report references various accounting and strategic management texts to support its findings, providing a comprehensive overview of the hotel's financial challenges and opportunities. The report suggests that the hotel should rent the machinery to reduce expenses and also invest in the project to increase the profitability.

RUNNING HEAD: Accounting 1
Project Report: Accounting

Accounting 2
Contents
Case overview...................................................................................................................3
Task 1................................................................................................................................3
Task 2................................................................................................................................4
Task 3................................................................................................................................5
Conclusion........................................................................................................................6
References.........................................................................................................................8

Accounting 3
Case overview:
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.
Task 1:
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

Accounting 4
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
Discoun
ted
Residua
l Value
Servici
ng
Total
Cost
over
3
years
Discoun
ted
Value
Year 1
Discoun
ted
Value
Year 2
Discoun
ted
Value
Year 3
Total
Cost
over
3
years
Tread
mill (3
pieces
)
$17,9
85 $571 $600.
00
$18,0
14 $1,806 $1,722 $1,643 $5,17
0
Ellip
tical
Traine
r (2
pieces
)
$8,00
0 $254 $600.
00
$8,34
6 $926 $883 $842 $2,65
1
Exer
cise
Bike
(4
pieces
)
$13,2
00 $419 $600.
00
$13,3
81 $829 $790 $754 $2,37
3
Rowi
ng
Machi
ne (1
piece)
$2,70
0 $86 $600.
00
$3,21
4 $769 $733 $699 $2,20
0
TOTA
L
COST
$41,8
85 $1,330 $2,40
0
$42,9
55 $4,329 $4,128 $2,295 $12,3
95
Task 2:
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,

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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)
Membersh
ip Project
Cash
Outflo
w
Cash
Inflow
Net
Cash
Flow
Tax After
Tax CF PV Factor NPV
Year 0 $38,00
0 -$38,000
-
$11,40
0
-$26,600 1 -
26,600
Year 1 $800 $2,20,00
0
$2,19,20
0
$65,76
0
$1,53,44
0
0.9259259
26 1,42,074
Year 2 $800 $2,36,12
0
$2,35,32
0
$70,59
6
$1,64,72
4
0.8573388
2 1,41,224
Year 3 $800 $2,53,67
6
$2,52,87
6
$75,86
3
$1,77,01
3
0.7938322
41 1,40,519
NPV $3,97,21
7
Task 3:
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

Accounting 6
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
Budgete
d 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 $14,91
2

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Conclusion:
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.

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References:
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.