Marriott Corporation The Cost of Capital Author Student Number 董晖 林桐 吴正浩 祝承懿 Shanghai Advanced Institute of Finance‚ Shanghai Jiao Tong University Table of Contents Background The hurdle rate is the required return or opportunity cost of each division and company. Only project with positive NPV discounted by hurdle rate will be invested‚ and the total return of Marriott up to all projects invested. Though there are many subjective aspects in estimation
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1) Executive Summary Marriott needs to calculate hurdle rates which will be used in its investment project selection. The company chooses to use cost of capital as its hurdle rate. Since the company has three business divisions and the cost of capital in each division varies and differs from that of Marriott as a whole‚ each division needs to have its own hurdle rate. The reason behind this practice is the company’s strategy which focuses on growth. Using a single hurdle rate for the whole company
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Marriott cost of capital Objective: 1) Calculate the divisional and the company cost of capital and explain the calculation. 2) Evaluate Marriott’s use of company cost-of-capital rate for the individual divisions. Cost of Capital for Lodging Division can be expressed as CC = We*Ce + Wd*Cd. For the weights of debt and equity (We and Wd)‚ the 1988 target-schedule rates of debt-to-assets and debt-to-equity were used as the only measures available in the case. Cost
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FBE 421 Marriott Corporation ------------------------------------------------- Introduction Founded in 1927‚ Marriott Corporation has become one of the leading food service companies in the United States. As of 1987‚ Marriott recorded a profit of $233 million on sales of $6.5 billion and retained a high sales growth rate of 24%. Marriott runs on three major lines of business lodging‚ contract services‚ and restaurants. Lodging division which includes 361 hotels generated 41% of 1987 sales
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Marriott Corporation: The Cost of Capital (Abridged) 1. How does Marriott use its estimate of cost of capital? Does this make sense? Marriot use cost of capital as the hurdle rate (minimum rate of return required to accept the project) to discount future cash flows for the investment projects of the three lines of business (Lodging‚ Contract Services and Restaurants). They use this rate to calculate NPV and net present value over cost to decide for the profit rate. Since cost of the project
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Ensayo de Aplicación El Asunto del Aborto El tema moral del derecho al aborto es uno que toca las mismas fibras de nuestra sociedad puertorriqueña‚ dado la corriente conservadora y tradicional que ha permeado en los pasados siglos. Sin embargo‚ las influencias modernas y la habilidad de facilitarse un aborto han causado un cambio en la mentalidad de las generaciones presentes. Las posiciones extremadamente radicales a favor y en contra del aborto requieren que cada persona asuma una de las
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Financial Decision Making Final Project Case analysis: Marriott Corporation Introduction and background The Marriott Corporation‚ an American firm‚ was founded in 1927 by J.Willard Marriot.The company began as a small beer stand and soon began to sell food and provided lodging that expanded rapidly. With the help of his wife Alice‚ the family owned business had 45 restaurants in nine states by 1940 and grew into one of the leading service companies. The Company has three major lines
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Marriott’s three divisions and for the firm as a whole. Marriott should find the hurdle rates for its divisions separately because its divisions operate in separate industries and therefore face different business risks. Marriott’s vice president says that increasing the hurdle rate by 1% would decrease the present value of project inflows by 1%. Since finding appropriate hurdle rates is critical to accepting or rejecting projects‚ Marriott should be precise by calculating and using division-specific
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El otono del patriarca Publicada en 1980 y ambientada en un supuesto pais situado a orillas del Caribe‚ El Otono del patriarca relata la vida de un dictador que muere viejisimo‚ llegando a conserver el poder durante mas de cien anos. A treves de sus recuerdos‚ el lector se entera de que es hijo de una mujer del pueblo‚ Bendicion Alvarado‚ unica persona a quien quiso de verdad; que no supo quien fue su padre; que su primera infancia transcurrio en la miseria y que llego a dictador‚ despues de
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“El Tonto Del Barrio” Humbleness and charity towards one another is one of the lessons “El Tonto del Barrio” illustrates to the readers through the protagonist of the story‚ Romero Estrado. The story begins describing with very specific details the life of “El Cotorro” or Romero. Mr. Armas continues the story inviting all of the people from “El Barrio” to come along in the story to show their influence in the life of Romero. What happens in the story‚ Mr. Romero seems to be the happiest person
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