Wgu Financial Analysis Paper
The purpose of this analysis is to determine whether or not the approval of sports betting would help Central increase gambling revenue. I will conduct this analysis by building a Decision Support (DSS) model that forecasts the proposed sports betting program’s financial situation for the next 10 years. This model will be used to provide proper reasoning for the approval or disapproval of the sports betting proposal; also I will use this model to support and explain my recommendation on the matter of sports betting.
DSS Model: Summary and Analysis
The results illustrated below analyze the Net income, Cash on hand, Debt owed, and Average return on investment for the year 2018 using the four pre-defined scenarios, including Low roller …show more content…
Although the ROI in the High roller (monopoly) scenario is positive it is still not significant. The reason for that can be further explained by examining the Debt Owed.
The financing required for the project will be of $60 million; but we can see in my calculations that the Debt Owed will increase in most scenarios rather than decrease, which is the opposite of what we expect. The debt decreases only in the High roller (monopoly) but the decrease is not significant because over 10 years we would only have regained approximately $34 million out of the $60 million originally financed. In other words we would not turn a profit in the next 10 years on our investment; in fact we will still be in debt.
Summary of Scenarios Scenario 2018 Net Income 2018 Cash on Hand 2018 Debt Owed Average Return on Investment (ROI)
Low roller, Monopoly -$2,052,859.00 $5,000,000.00 $84,645,904.00 -0.0822
High roller, Monopoly $5,339,578.00 $5,000,000.00 $25,847,938.00 0.1138
Low roller, Competition -$16,402,941.00 $5,000,000.00 $193,135,159.00 -0.4438
High roller, Competition -$11,783,196.00 $5,000,000.00 $158,544,652.00
DSS Model: Summary and Analysis
The results illustrated below analyze the Net income, Cash on hand, Debt owed, and Average return on investment for the year 2018 using the four pre-defined scenarios, including Low roller …show more content…
Although the ROI in the High roller (monopoly) scenario is positive it is still not significant. The reason for that can be further explained by examining the Debt Owed.
The financing required for the project will be of $60 million; but we can see in my calculations that the Debt Owed will increase in most scenarios rather than decrease, which is the opposite of what we expect. The debt decreases only in the High roller (monopoly) but the decrease is not significant because over 10 years we would only have regained approximately $34 million out of the $60 million originally financed. In other words we would not turn a profit in the next 10 years on our investment; in fact we will still be in debt.
Summary of Scenarios Scenario 2018 Net Income 2018 Cash on Hand 2018 Debt Owed Average Return on Investment (ROI)
Low roller, Monopoly -$2,052,859.00 $5,000,000.00 $84,645,904.00 -0.0822
High roller, Monopoly $5,339,578.00 $5,000,000.00 $25,847,938.00 0.1138
Low roller, Competition -$16,402,941.00 $5,000,000.00 $193,135,159.00 -0.4438
High roller, Competition -$11,783,196.00 $5,000,000.00 $158,544,652.00