Académique Documents
Professionnel Documents
Culture Documents
40.0%
QST
GST
Weighted Avg Cost of Capital
7.0%
2008
Inflation
2.0%
Old occupancy
59%
New occupancy
65%
# of rooms
280
Delta
17
95
Number of days
365
2008
$0
$0
$0
Pre-tax Income
Capital Cost Allowance
Taxable Income
Tax
Net Income
Add Back Capital Cost Allowance
Subtract Capital Cash Outflow
$0
$0
($8,500,000)
($8,500,000)
Total Investment
8,500,000
($8,007,310)
($8,500,000)
2009
1,315,475
($290,000)
$1,025,475
($410,190)
2010
1,315,475
($544,400)
$771,075
($308,430)
2011
1,315,475
($479,424)
$836,051
($334,420)
2012
1,315,475
($425,687)
$889,787
($355,915)
2013
1,315,475
($381,012)
$934,463
($373,785)
2014
1,315,475
($110,592)
$1,204,883
($481,953)
2015
1,315,475
($88,474)
$1,227,001
($490,800)
2016
1,315,475
($334,203)
$981,272
($392,509)
$615,285
$290,000
$0
$462,645
$544,400
$0
$501,630
$479,424
$0
$533,872
$425,687
$0
$560,678
$381,012
$0
$722,930
$110,592
$0
$736,201
$88,474
$0
$588,763
$334,203
$0
$905,285
$1,007,045
$981,054
$959,560
$941,689
$833,522
$824,674
$922,966
4,774,001
$905,285
($7,594,715)
$1,007,045
($6,587,671)
($2,471,220)
-1.82%
10.23
0.71
$981,054
($5,606,616)
$959,560
($4,647,057)
$941,689
($3,705,367)
$833,522
($2,871,846)
$824,674
($2,047,172)
$922,966
($1,124,206)
2008
2009
2010
2011
2012
2013
2014
2015
2016
CAPITAL OUTFLOWS:
building
(7,000,000) $
$
$
(1,500,000) $
(8,500,000) $
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
5,500,000
589,475
-
$
$
$
5,500,000
589,475
-
$
$
$
5,500,000
589,475
-
$
$
$
5,500,000
589,475
-
$
$
$
5,500,000
589,475
-
$
$
$
5,500,000
589,475
-
$
$
$
5,500,000
589,475
-
$
$
$
5,500,000
589,475
-
6,089,475
6,089,475
6,089,475
6,089,475
6,089,475
6,089,475
6,089,475
6,089,475
50% of Revenue
Fixed cost
additional cost for Auditorium
Variable cost - room
$
$
$
$
$
$
$
$
(2,750,000)
(1,000,000)
(800,000)
(224,001)
$
$
$
$
(2,750,000)
(1,000,000)
(800,000)
(224,001)
$
$
$
$
(2,750,000)
(1,000,000)
(800,000)
(224,001)
$
$
$
$
(2,750,000)
(1,000,000)
(800,000)
(224,001)
$
$
$
$
(2,750,000)
(1,000,000)
(800,000)
(224,001)
$
$
$
$
(2,750,000)
(1,000,000)
(800,000)
(224,001)
$
$
$
$
(2,750,000)
(1,000,000)
(800,000)
(224,001)
$
$
$
$
(2,750,000)
(1,000,000)
(800,000)
(224,001)
Total Expenses
(4,774,001) $
-
(4,774,001) $
-
(4,774,001)
-
CASH INFLOWS:
CASH OUTFLOWS:
(4,774,001) $
-
(4,774,001) $
-
(4,774,001) $
-
(4,774,001) $
-
(4,774,001) $
-
$
$
$
$
$
$
$
(8,500,000)
(8,500,000)
NPV (7%):
(2,471,220)
$
$
$
$
$
$
$
1,315,475
(290,000)
1,025,475
(410,190)
290,000
905,285
$
$
$
$
$
$
$
IRR
1,315,475
(544,400)
771,075
(308,430)
544,400
1,007,045
$
$
$
$
$
$
$
-1.82%
1,315,475
(479,424)
836,051
(334,420)
479,424
981,054
$
$
$
$
$
$
$
Payback
1,315,475
(425,687)
889,787
(355,915)
425,687
959,560
$
$
$
$
$
$
$
1,315,475
(381,012)
934,463
(373,785)
381,012
941,689
$
$
$
$
$
$
$
1,315,475
(110,592)
1,204,883
(481,953)
110,592
833,522
$
$
$
$
$
$
$
1,315,475
(88,474)
1,227,001
(490,800)
88,474
824,674
$
$
$
$
$
$
$
1,315,475
(334,203)
981,272
(392,509)
334,203
922,966
10.23
P&L Statement
Project Name
BUSINESS CASE
2008
Building
Furniture, fixtures and equipment
Capital Expenditures
(7,000,000)
(1,500,000)
(8,500,000)
2009
2010
-
2011
-
2012
-
2013
-
2014
-
2015
2016
(300,000)
2,033,333
(240,000)
2,093,333
(192,000)
2,141,333
(153,600)
(153,600)
(122,880)
(122,880)
(98,304)
(98,304)
(78,643)
(78,643)
(62,915)
(62,915)
(2,750,000)
(1,000,000)
(800,000)
(224,001)
(4,774,001)
(2,750,000)
(1,000,000)
(2,750,000)
(1,000,000)
(2,750,000)
(1,000,000)
(2,750,000)
(1,000,000)
(2,750,000)
(1,000,000)
(2,750,000)
(1,000,000)
(2,750,000)
(1,000,000)
(224,001)
(4,774,001)
(224,001)
(4,774,001)
(224,001)
(4,774,001)
(224,001)
(4,774,001)
(224,001)
(4,774,001)
(224,001)
(4,774,001)
(224,001)
(4,774,001)
COSTS
50% of Revenue
Fixed cost
additional cost for Auditorium
Variable cost - room
Business Costs (Enterprise)
Total Expenses
(4,774,001)
(4,774,001)
(4,774,001)
(4,774,001)
(4,774,001)
(4,774,001)
(4,774,001)
(4,774,001)
5,500,000
589,475
-
5,500,000
589,475
-
5,500,000
589,475
-
5,500,000
589,475
-
5,500,000
589,475
-
5,500,000
589,475
-
5,500,000
589,475
-
5,500,000
589,475
-
3,348,808
(1,339,523)
2,009,285
3,408,808
(1,363,523)
2,045,285
3,456,808
(1,382,723)
2,074,085
1,161,875
(464,750)
697,125
1,192,595
(477,038)
715,557
1,217,171
(486,868)
730,302
1,236,831
(494,733)
742,099
1,252,560
(501,024)
751,536
Benefits:
Revenue conference center
Additional revenue hotel
Total Cost Savings
Earnings before Tax
Income Tax
Earnings after Tax
WORST CASE:
Corporate Tax Rate
40.0%
QST
GST
Weighted Avg Cost of Capital
7.0%
2008
Inflation
2.0%
Old occupancy
59%
New occupancy
70%
# of rooms
280
Delta
31
95
number of days
365
2008
$0
$0
$0
2009
2,366,454
($290,000)
$2,076,454
($830,581)
2010
2,366,454
($544,400)
$1,822,054
($728,821)
2011
2,366,454
($479,424)
$1,887,030
($754,812)
2012
2,366,454
($425,687)
$1,940,766
($776,307)
2013
2,366,454
($381,012)
$1,985,442
($794,177)
2014
2,366,454
($110,592)
$2,255,862
($902,345)
2015
2,366,454
($88,474)
$2,277,980
($911,192)
2016
2,366,454
($334,203)
$2,032,251
($812,900)
Net Income
Add Back Capital Cost Allowance
Subtract Capital Cash Outflow
After Tax Cash Flow
$0
$0
($8,500,000)
($8,500,000)
$1,245,872
$290,000
$0
$1,535,872
$1,093,232
$544,400
$0
$1,637,632
$1,132,218
$479,424
$0
$1,611,642
$1,164,460
$425,687
$0
$1,590,147
$1,191,265
$381,012
$0
$1,572,277
$1,353,517
$110,592
$0
$1,464,109
$1,366,788
$88,474
$0
$1,455,262
$1,219,350
$334,203
$0
$1,553,553
Total Investment
For IRR Calculation
For Payback Period Calculation
8,500,000
($8,007,310)
($8,500,000)
5,708,472
$1,535,872
($6,964,128)
$1,637,632
($5,326,496)
$1,611,642
($3,714,854)
$1,590,147
($2,124,707)
$1,572,277
($552,430)
$1,464,109
$911,678
$1,455,262
$2,366,940
$1,553,553
$3,920,493
$1,294,206
11.08%
6.38
1.15