Subject category:
Finance, Accounting and Control
Published by:
Asia Case Research Centre, The University of Hong Kong
Length: 4 pages
Abstract
Phuket Beach Hotel has an opportunity to lease its under-utilised space to a karaoke pub and earn a rental income. Alternatively, the hotel could develop the unused space and create its own pub. The general manager of the hotel must decide which of the two capital projects to recommend to the hotel owners. The case presents sufficient information to build-cash flow forecasts for each project and to rank the mutually exclusive projects using various evaluation criteria.
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Abstract
Phuket Beach Hotel has an opportunity to lease its under-utilised space to a karaoke pub and earn a rental income. Alternatively, the hotel could develop the unused space and create its own pub. The general manager of the hotel must decide which of the two capital projects to recommend to the hotel owners. The case presents sufficient information to build-cash flow forecasts for each project and to rank the mutually exclusive projects using various evaluation criteria.