Phuket Beach Hotel Case Studey
Analysis of Cash Flow - Planet Karaoke Pub figures in baht Yr. 0 Rental income less less less Depreciation Increase in repair and maintenance expenses Decrease in net room revenue Additional Operating Income less Taxes NOPAT add less Depreciation Capital Expenditure Operating Cash Flow Discounted Operating Cash Flow @ 10.75% Yr. 1 Yr. 2
2,040,000 2,040,000 -192,500 -192500 -10,000 -10,000 -1,650,000 -1,683,000 187,500 -56,250 131,250 192,500 -770,000 -770,000 -770,000 323,750 292,325 300,650 245,117 154,500 -46,350 108,150 192,500
Payback Period Discounted Payback Period Average Return on Investment NPV PI IRR Equivalent Annuity
2.46 yrs 3.01 yrs 39% 165,017 baht 1.21 21% 52,906 baht
Working Notes 1. Rental income = baht 170,000*12 for the years 1 and 2 and increase by 5% in the years 3 and 4 2. Straight line depreciation 3. Patronage factor taken as 0.5 i.e. 12.5% reduction in net room revenue 4. Taxes at 30% 5. Base capital cost = baht 770,000 6. WACC = 10.75%
Yr. 3
Yr. 4
2,142,000 2,142,000 -192500 -192500 -10,000 -10,000 -1,767,125 -1,855,500 172,375 -51,713 120,662 192,500 84,000 -25,200 58,800 192,500
313,162 230,536
251,300 167,039
Analysis of Cash Flow - Beach Karaoke Pub figures in baht Yr. 0 Sales less less less less less Food and Beverage Cost Other Operating Expenses Depreciation Increase in repair and maintenance expenses Decrease in net room revenue Additional Operating Income less Taxes NOPAT add less Depreciation Capital Expenditure Operating Cash Flow Discounted Operating Cash Flow @ 10.75% Yr. 1 4,672,000 -1,168,000 -1,027,840 -283,333 -10,000 -1,650,000 532,827 -159,848 372,979 283,333 -283,333 372,979 336,775 Yr. 2 4,905,600 -1,226,400 -1,079,232 -283,333 -10,000 -1,683,000 623,635 -187,090 436,544 283,333 -283,333 436,544 355,911
-1,700,000 -1,700,000 -1,700,000
Payback Period Discounted Payback Period Average Return on Investment NPV PI IRR Equivalent Annuity
3.84 yrs 4.95 yrs 30% 373,043 baht 1.22 17%
2,040,000 2,040,000 -192,500 -192500 -10,000 -10,000 -1,650,000 -1,683,000 187,500 -56,250 131,250 192,500 -770,000 -770,000 -770,000 323,750 292,325 300,650 245,117 154,500 -46,350 108,150 192,500
Payback Period Discounted Payback Period Average Return on Investment NPV PI IRR Equivalent Annuity
2.46 yrs 3.01 yrs 39% 165,017 baht 1.21 21% 52,906 baht
Working Notes 1. Rental income = baht 170,000*12 for the years 1 and 2 and increase by 5% in the years 3 and 4 2. Straight line depreciation 3. Patronage factor taken as 0.5 i.e. 12.5% reduction in net room revenue 4. Taxes at 30% 5. Base capital cost = baht 770,000 6. WACC = 10.75%
Yr. 3
Yr. 4
2,142,000 2,142,000 -192500 -192500 -10,000 -10,000 -1,767,125 -1,855,500 172,375 -51,713 120,662 192,500 84,000 -25,200 58,800 192,500
313,162 230,536
251,300 167,039
Analysis of Cash Flow - Beach Karaoke Pub figures in baht Yr. 0 Sales less less less less less Food and Beverage Cost Other Operating Expenses Depreciation Increase in repair and maintenance expenses Decrease in net room revenue Additional Operating Income less Taxes NOPAT add less Depreciation Capital Expenditure Operating Cash Flow Discounted Operating Cash Flow @ 10.75% Yr. 1 4,672,000 -1,168,000 -1,027,840 -283,333 -10,000 -1,650,000 532,827 -159,848 372,979 283,333 -283,333 372,979 336,775 Yr. 2 4,905,600 -1,226,400 -1,079,232 -283,333 -10,000 -1,683,000 623,635 -187,090 436,544 283,333 -283,333 436,544 355,911
-1,700,000 -1,700,000 -1,700,000
Payback Period Discounted Payback Period Average Return on Investment NPV PI IRR Equivalent Annuity
3.84 yrs 4.95 yrs 30% 373,043 baht 1.22 17%