Phuket Beach Hotel Valuing Mutually Exclusive Capital...

Using Case Studies in Real Estate and Finance Courses By Su Han Chan Department of Real Estate The Preliminaries Setting expectations Focus is on decision making Requires judgment No â€Å"right† answers Setting ground rules The student contract (4Ps) Knowing your participants Selecting cases and readings Using a mix of short (â€Å"breather†) and long cases Assigning a term project Case seminar series_Su H Chan A Short Case Phuket Beach Hotel: Valuing Mutually Exclusive Capital Projects* (4 pages) Synopsis Phuket Beach Hotel has an opportunity to lease its underutilized 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†¦show more content†¦Also lays out other alternatives for Disneys entry into the China market. Case B: HKSAR Perspective Presents detailed information about the proposed theme park and the assumptions used by the Hong Kong SAR in conducting its economic assessment of the project. Also lays out other alternatives for reinvigorating the tourism industry in Hong Kong and the development of Pennys Bay (the proposed site of Hong Kong Disneyland) in nearby Lantau. Case C: The Joint Venture Negotiation Case C is structured as a bilateral negotiation exercise and allows students to participate in a joint venture simulation for the Disneyland project in Hong Kong. Students are assigned to a negotiation team representing one of two groups (either the Hong Kong government or Walt Disney Co.). They are required to study the case assigned to their side of the negotiation. Thereafter, the students task in this negotiation is to represent their groups effectively and to achieve the best outcome for the government or for Walt Disney. Case seminar series_Su H Chan Using the Case(s) Distribute case memo to students Distribute cases for each side Case pre-briefing Students prepare their opening bids and walkawayShow MoreRelatedPhuket Beach Case1683 Words   |  7 PagesPHUKET BEACH HOTEL: VALUING MUTUALLY EXCLUSIVE PROJECTS I. STATEMENT OF THE PROBLEM This is an assessment of the different costs and benefits of two mutually exclusive capital projects involving the use of an underutilized space located on the second floor of the main building of Phuket Beach Hotel (PBH). The first project, Planet Karaoke Pub (PKP) offered to sign a four-year lease agreement with (PBH) while the second project, Beach Karaoke Pub (BKP), is a pub the PBH itself, plans to putRead MorePhuket Beach Hotel1996 Words   |  8 PagesCase 10:Phuket Beach Hotel VALUING MUTUALLY EXCLUSIVE CAPITAL PROJECTS Case Overview Planet Karaoke Pub Project Lives Monthly rental (5% increment for 3rd and 4th year) 4 years 170, 000 (THB) 770, 000 to 1, 000, 000 (THB) 55, 000 (THB) Up front renovation cost (Depreciated over the life of project - straight line method with zero salvage value) Overhead expenses Repair and maintenance cost 10, 000 (THB) / year Case Overview Beach Karaoke Pub Project Lives Up front investment Read MorePhuket Beach Hotel3020 Words   |  13 PagesFinancial Management. EBS ML. 4th course students. Case study. Phuket Beach Hotel. Valuing Mutually Exclusive Capital Projects. Questions 1. Please asses the economic benefits associated with each of the capital project. What is Initial Outlay? What are the incremental cash flows over the life of the project? What is an appropriate discount rate to use for discounting the cash flows of the project? SN 1 and SN 2 - 40% 2. Are the project comparable based on the standard NPV measure, given that they