Marriott once said, ‘‘A man should keep on being constructive and do constructive things.’’ He and his wife are certainly two great examples of this strong work ethic. . The converse is also true. 3. CONCEPT OF TIME VALUE OF MONEY 197 |----------|----------|----------|----------|----------| 0 1 2 3 4 5 Years $600 $600 $600 $600 $600 at 12% interest PV=? It depends on your purpose, the complexity of the calculation, and your degree of comfort when using spreadsheets and / or a business calculator. E T H I C S ✶ Macy, a friend of yours, started a small restaurant five years ago. Address any ratios that appear high or low, and explain why you think this is the case. Analyze the forecasts and explain how Juancas Cafe´ is expected to perform. 3. To solve the problem, Paul Fleming (P.F.) A: Asset management for the hotel industry is maximising our return from the way we run the business. PARTNERSHIPS Before the creation of the limited liability company (LLC), partnerships were a popular form of business entity for new ventures. What is the equity investor’s IRR? Type [pv] to invoke the present value function. ■ This is a tough question to answer, particularly if you have a limited amount of capital to invest in the venture or if you have elected not to invest your own funds in the deal. Again, it is more practical and accurate to perform these calculations using a business calculator or a spreadsheet such as Excel. For a hotel, operating expenses are subdivided into two sections: departmental expenses and unallocated expenses. If you are attempting to finance a start-up business and your management team lacks experience, make sure you surround yourself with seasoned professionals and reward them well. SBA 7(a) loans can be either short term or long term and offer a below-market interest rate. It is expected that the business will fall within the 20% tax bracket. In other words, one dollar received today is worth more than one dollar to be received in the future. Last, but not least, invest your equity wisely. Financial management in the hospitality industry 3. If the restaurateur is willing to sign a long-term lease, she may be able to negotiate several months of free rent from the landlord and a build-out allowance to renovate the facility if the landlord really LEASES. Mr. Silverton is specifically interested in publicly traded land-based and riverboat casino operations. 6. As in the case of contributed land, the amount of equity is based on the market value of the building. Apply financial analysis skills to scheduling, pricing, revenue management, profit flexing, and costvolume-profit decisions. 10. ■ The method used to process credit card transactions: Some banks treat credit card sales as cash sales, with the cash payments being deposited in the business’ bank account each day. Mr. Hilton also believed that tourism would stimulate international economies and provide jobs for many, thus generating kudos for the United States and reducing the amount of foreign aid it had to provide. 4. He studied commercial law but was sent to the federal penitentiary for tax evasion. This hospitality industry financial accounting with answer sheet ahlei 3rd edition ahlei hospitality accounting financial management, as one of the most vigorous sellers here will extremely be among the best options to review. Do shop diligently and wisely before spending your money. [↓] Display shows C04 0.0000 with no equal sign “=” 18550 [ENTER] Display shows C04= 18550.0000 [↓] Display shows F04= 1.0000, since we only have C04 one time, we can simply accept this by entering the down arrow key again. If money is compounded semiannually, we would have to multiply the time by two (5 years ⫻ 2 halves per year ⫽ 10 compounding periods) and divide the rate by two (12% ⫼ 2 ⫽ 6%). These are two critical areas where cutbacks should be closely evaluated. Read, interpret, and analyze financial management reports b. L I M I T E D L I A B I L I T Y C O M PA N Y ( L L C ) : The qualifications to become a limited liability company are similar to those of an S-corporation. Many cities are either redeveloping or rehabilitating their downtown areas to attract new residents and tourists. L I M I T E D P A R T N E R S H I P : When all partners are limited partners, with liability limited to their investment in the partnership. He finds himself short of cash and is about to play the float by sending in his accounts payable checks on their due date. The primary disadvantage of the corporate entity is double taxation. FINANCIAL CHALLENGES a. Hospitality: A multifaceted industry b. It includes the cost of debt and the investor’s required ROI. ■ What are you projecting for payback period, return on investment, net present value, and internal rate of return? RATIO ANALYSIS Ratio analysis is a quick way to assess the financial health of a company. c. How much ownership do I need to offer my equity investor to satisfy his investment goals? Some companies get larger by expanding their operations or by acquiring other companies; others may cease to exist under their original name and get swallowed up by larger entities, while still others choose to revert to private ownership to regain control of their future destinies. Thus, assets that have a useful life of several years are depreciated over the life of the asset rather than when they are acquired. With gas prices at $3.00 per gallon, you would require over $1,000 per month to drive that car. 162 CHAPTER 6 䡲 FINANCING GROWTH Illustration 6-10 shows this process and illustrates how companies benefited from these mortgage-backed securities. While members of the savings and loan industry were somewhat knowledgeable about commercial lending, they knew little about real estate and therefore did not understand the cyclical nature of the real estate industry. With his management team, Juan Carlos has determined cash inflows and outflows for the first ninety days of business: ■ The test location will open in September to coincide with cooler weather and the hope that more people will be inclined to purchase hot coffee. It was an all-equity deal. Can Siu Ling raise the amount of equity she needs for her venture? While a sole proprietorship is the easiest form of entity to establish, it does not provide the flexibility and personal protection needed to manage and grow a business. Bill Kimpton, 2000 When we met, we clicked instantly. Preview of Chapter 10 The Investment Package 1. O The Time Value of Money The time value of money concept (TVM) is the cornerstone of investment analysis. 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