The Terminus Hotel, a 200-room facility located in a medieval city in Southern Spain. As consequence...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
The Terminus Hotel, a 200-room facility located in a medieval city in Southern Spain. As consequence of poor management and old-fashioned interior design. the hotel experienced slumping demand since 2001. In 2004, the hotel was on the brink of bankruptcy. All of a sudden, these dark prospects turned into hopeful ones; the hotel was located in a historic building and the regional authorities approached Mr. Leo D. Marcial, chair of the Chamber of Commerce, to mobilize local entrepreneurs in order to take over hotel ownership. After some discussions, the entrepreneurs agreed on bidding for the hotel to make t an exclusive, high profile and properly-managed facility. The entrepreneurs regarded the acquisition of the Teminus Hotel as an opportunity to enter the hospitality industry under convenient conditions; they could get a first-rate brand at a relatively cheap price. In January 2007, the new ownership completed thorough refurbishing of the facility, which comprised new furniture and state-of-the-art interior design. The hotel resumed operations in February 2007 (see Table 1). TABLE 1 I TERMINUS HOTEL:ASSETS (NEUROS) (DECEMBLR 31.2007) 2007 2004 ASSETS Goodwill Other insangible assets Investmert property Prepeny, plant and equioment Financial assets avalatie fer sale Trade and other receivables Delerred tax assets Non-current assets 35.000 55.000 40.000 25000 10,000 2570,000 9,400 6.250,000 96,000 90,000 12,600 75,000 175.000 90,000 2.985,900 6,547,000 Inventories Financial assets avalabie for sale Trade and other receivables 104 500 22500 1.150.000 56,000 15,000 875.000 Derivative financial instruments 95,000 117,000 Cash and cash equivalents Assets heid for sale 2233,000 1,656,000 1375,000 119,000 Current assete 4,071,000 3.746.00 The new Terminus Hotel offered three main services: accommodation, a restaurant and entertainment. The restaurant served haute cuisine designed and prepared by the team of a world- class chef, whilst entertainment consisted of flamenco singing and dancing. Restaurant and entertainment services were open to non-clents. In their own firms, the entrepreneurs had spare capacity in a number of support services. In a win- win move, alled firms supplied the hotel with full service in areas such as accounting, law, financing, advertising. gardening, receivables and the reservation center. The transfer prices for these transactions were below market prices (see Table 2). TABLE 2 SERIGES PROODED Te THE TERMMIS HOTEL BY ALUED EHMS INLBOS) Service 2007 56.000 Law Firarcing Accounting and Taxation Advertieing Gardening 86,000 55.000 320.000 20.000 Reservation Center 36,000 30,000 600.000 Receivables TOTAL SERVICE PROFITABILITY ANALYSIS Although the business plan of the hotel forecasted losses for 2007, actual results were below expectations. In order to identify sources of problems, the entrepreneurs requested a profitability analysis for the three main services offered by the hotel. Cristina Aranda, the cost analyst of one of the alled firms and the person in charge of budget and control for the Terminus Hotel, teamed up with General Manager Claudia Santander to identify some cost categories (see Table 3). TABLE 3 COMMON COSTS FOR ACCOMMODATION. RESTALRANT AND ENTERTANMENT (EUROS) Service 2007 General Management Administraive Support Housekeeping Laundry Security 56.000 15.000 66,000 325,000 100,000 Maintenance 110.000 TOTAL 700,000 Additionaly. Cristina calculated the operating profit for each of the main services offered by the Terminus Hotel (see Table 4). TABLE 4 OPERATING PRDET FOR ACCOMMOATION, RESTALRANT AND ENTERTANNENT SERVCES Accommodation Restaurant Entertainment Revenues 4,500.000 2.650.000 1350,000 Operating Expenses 4,110.000 2475.000 1.400,000 Operating Proft 390,000 175,000 (50,000) Furthermore, Cristina and Claudia gathered the following data about each of the services (see Table 5). This data excludes the support activities shown above: TABLE 5 DATA ABOUT ACCOMMODATION. RESTALRANT AND ENTERTAINMENT Accommodation Restaurant Entertainment Employees Compensation of employees Square meters Daily occupancy (average) Property, plant and equipment (Net of depreciation) 12 16 12 €500.000 200 m2 €350,000 250,000 5,000 m2 300 m2 75 rooms 40 tables 30 tables €5,200,000 €475.000 €325,000 Drawing on current practices in her firm, a pottery, Cristina allocated 100% of common costs to services using a number of employees as single cost allocation base. In order to generate alternative calculations, Cristina also prepared an allocation of all common costs using total revenues as single cost allocation basis. Claudia objected to both calculations. In her opinion, single cost allocations resulted in simplistic calculations that were unrealistic for decision-making purposes. As Claudia argued that the complexity of hotel services could only be captured by using multiple cost allocations, she prepared the following proposal (Table 6): TABLE 6 ALLOGATING COMMON COSTS BY USING MuA TIPLE COST ALLOCATON BASES Commen cost Cost allocation basis Value of property, plant and equipment Number of employees Financing, Maintenance Accounting and Taxation, Reservation Center, Advertising, Law, General Management, Admin Gardening. Housekoeping. Security Receivables, Laundry Number of square meters Revenues REQUIRED ASSIGNMENTS: 1. Using Cristina's single cost allocations, report services profitability. Explain the rationale behind each of the proposals. 2. Using Claudia's multiple cost allocation bases, report services profitability. Comment on the rationale of the proposal. 3. In view of the available information, which decisions would you make? ... =>Basically, you are required to calculate the net profitability of the 3 business areas (ie ACCOMODATION, RESTAURANT, and ENTERTAINMENT) where net profitability of every business area = operating income of the business area (given) minus allocated portion of corporate overhead (i.e. €1,300,000), using two alternative cost allocation bases (i.e. division revenues and division employees) for the corporate overhead. Therefore, to produce two tables: one table with net profitability of the 3 business areas using division revenues as cost allocation base of the corporate overhead and a second table with net profitability of the 3 business areas using division employees as cost allocation base of the corporate overhead. The Terminus Hotel, a 200-room facility located in a medieval city in Southern Spain. As consequence of poor management and old-fashioned interior design. the hotel experienced slumping demand since 2001. In 2004, the hotel was on the brink of bankruptcy. All of a sudden, these dark prospects turned into hopeful ones; the hotel was located in a historic building and the regional authorities approached Mr. Leo D. Marcial, chair of the Chamber of Commerce, to mobilize local entrepreneurs in order to take over hotel ownership. After some discussions, the entrepreneurs agreed on bidding for the hotel to make t an exclusive, high profile and properly-managed facility. The entrepreneurs regarded the acquisition of the Teminus Hotel as an opportunity to enter the hospitality industry under convenient conditions; they could get a first-rate brand at a relatively cheap price. In January 2007, the new ownership completed thorough refurbishing of the facility, which comprised new furniture and state-of-the-art interior design. The hotel resumed operations in February 2007 (see Table 1). TABLE 1 I TERMINUS HOTEL:ASSETS (NEUROS) (DECEMBLR 31.2007) 2007 2004 ASSETS Goodwill Other insangible assets Investmert property Prepeny, plant and equioment Financial assets avalatie fer sale Trade and other receivables Delerred tax assets Non-current assets 35.000 55.000 40.000 25000 10,000 2570,000 9,400 6.250,000 96,000 90,000 12,600 75,000 175.000 90,000 2.985,900 6,547,000 Inventories Financial assets avalabie for sale Trade and other receivables 104 500 22500 1.150.000 56,000 15,000 875.000 Derivative financial instruments 95,000 117,000 Cash and cash equivalents Assets heid for sale 2233,000 1,656,000 1375,000 119,000 Current assete 4,071,000 3.746.00 The new Terminus Hotel offered three main services: accommodation, a restaurant and entertainment. The restaurant served haute cuisine designed and prepared by the team of a world- class chef, whilst entertainment consisted of flamenco singing and dancing. Restaurant and entertainment services were open to non-clents. In their own firms, the entrepreneurs had spare capacity in a number of support services. In a win- win move, alled firms supplied the hotel with full service in areas such as accounting, law, financing, advertising. gardening, receivables and the reservation center. The transfer prices for these transactions were below market prices (see Table 2). TABLE 2 SERIGES PROODED Te THE TERMMIS HOTEL BY ALUED EHMS INLBOS) Service 2007 56.000 Law Firarcing Accounting and Taxation Advertieing Gardening 86,000 55.000 320.000 20.000 Reservation Center 36,000 30,000 600.000 Receivables TOTAL SERVICE PROFITABILITY ANALYSIS Although the business plan of the hotel forecasted losses for 2007, actual results were below expectations. In order to identify sources of problems, the entrepreneurs requested a profitability analysis for the three main services offered by the hotel. Cristina Aranda, the cost analyst of one of the alled firms and the person in charge of budget and control for the Terminus Hotel, teamed up with General Manager Claudia Santander to identify some cost categories (see Table 3). TABLE 3 COMMON COSTS FOR ACCOMMODATION. RESTALRANT AND ENTERTANMENT (EUROS) Service 2007 General Management Administraive Support Housekeeping Laundry Security 56.000 15.000 66,000 325,000 100,000 Maintenance 110.000 TOTAL 700,000 Additionaly. Cristina calculated the operating profit for each of the main services offered by the Terminus Hotel (see Table 4). TABLE 4 OPERATING PRDET FOR ACCOMMOATION, RESTALRANT AND ENTERTANNENT SERVCES Accommodation Restaurant Entertainment Revenues 4,500.000 2.650.000 1350,000 Operating Expenses 4,110.000 2475.000 1.400,000 Operating Proft 390,000 175,000 (50,000) Furthermore, Cristina and Claudia gathered the following data about each of the services (see Table 5). This data excludes the support activities shown above: TABLE 5 DATA ABOUT ACCOMMODATION. RESTALRANT AND ENTERTAINMENT Accommodation Restaurant Entertainment Employees Compensation of employees Square meters Daily occupancy (average) Property, plant and equipment (Net of depreciation) 12 16 12 €500.000 200 m2 €350,000 250,000 5,000 m2 300 m2 75 rooms 40 tables 30 tables €5,200,000 €475.000 €325,000 Drawing on current practices in her firm, a pottery, Cristina allocated 100% of common costs to services using a number of employees as single cost allocation base. In order to generate alternative calculations, Cristina also prepared an allocation of all common costs using total revenues as single cost allocation basis. Claudia objected to both calculations. In her opinion, single cost allocations resulted in simplistic calculations that were unrealistic for decision-making purposes. As Claudia argued that the complexity of hotel services could only be captured by using multiple cost allocations, she prepared the following proposal (Table 6): TABLE 6 ALLOGATING COMMON COSTS BY USING MuA TIPLE COST ALLOCATON BASES Commen cost Cost allocation basis Value of property, plant and equipment Number of employees Financing, Maintenance Accounting and Taxation, Reservation Center, Advertising, Law, General Management, Admin Gardening. Housekoeping. Security Receivables, Laundry Number of square meters Revenues REQUIRED ASSIGNMENTS: 1. Using Cristina's single cost allocations, report services profitability. Explain the rationale behind each of the proposals. 2. Using Claudia's multiple cost allocation bases, report services profitability. Comment on the rationale of the proposal. 3. In view of the available information, which decisions would you make? ... =>Basically, you are required to calculate the net profitability of the 3 business areas (ie ACCOMODATION, RESTAURANT, and ENTERTAINMENT) where net profitability of every business area = operating income of the business area (given) minus allocated portion of corporate overhead (i.e. €1,300,000), using two alternative cost allocation bases (i.e. division revenues and division employees) for the corporate overhead. Therefore, to produce two tables: one table with net profitability of the 3 business areas using division revenues as cost allocation base of the corporate overhead and a second table with net profitability of the 3 business areas using division employees as cost allocation base of the corporate overhead. The Terminus Hotel, a 200-room facility located in a medieval city in Southern Spain. As consequence of poor management and old-fashioned interior design. the hotel experienced slumping demand since 2001. In 2004, the hotel was on the brink of bankruptcy. All of a sudden, these dark prospects turned into hopeful ones; the hotel was located in a historic building and the regional authorities approached Mr. Leo D. Marcial, chair of the Chamber of Commerce, to mobilize local entrepreneurs in order to take over hotel ownership. After some discussions, the entrepreneurs agreed on bidding for the hotel to make t an exclusive, high profile and properly-managed facility. The entrepreneurs regarded the acquisition of the Teminus Hotel as an opportunity to enter the hospitality industry under convenient conditions; they could get a first-rate brand at a relatively cheap price. In January 2007, the new ownership completed thorough refurbishing of the facility, which comprised new furniture and state-of-the-art interior design. The hotel resumed operations in February 2007 (see Table 1). TABLE 1 I TERMINUS HOTEL:ASSETS (NEUROS) (DECEMBLR 31.2007) 2007 2004 ASSETS Goodwill Other insangible assets Investmert property Prepeny, plant and equioment Financial assets avalatie fer sale Trade and other receivables Delerred tax assets Non-current assets 35.000 55.000 40.000 25000 10,000 2570,000 9,400 6.250,000 96,000 90,000 12,600 75,000 175.000 90,000 2.985,900 6,547,000 Inventories Financial assets avalabie for sale Trade and other receivables 104 500 22500 1.150.000 56,000 15,000 875.000 Derivative financial instruments 95,000 117,000 Cash and cash equivalents Assets heid for sale 2233,000 1,656,000 1375,000 119,000 Current assete 4,071,000 3.746.00 The new Terminus Hotel offered three main services: accommodation, a restaurant and entertainment. The restaurant served haute cuisine designed and prepared by the team of a world- class chef, whilst entertainment consisted of flamenco singing and dancing. Restaurant and entertainment services were open to non-clents. In their own firms, the entrepreneurs had spare capacity in a number of support services. In a win- win move, alled firms supplied the hotel with full service in areas such as accounting, law, financing, advertising. gardening, receivables and the reservation center. The transfer prices for these transactions were below market prices (see Table 2). TABLE 2 SERIGES PROODED Te THE TERMMIS HOTEL BY ALUED EHMS INLBOS) Service 2007 56.000 Law Firarcing Accounting and Taxation Advertieing Gardening 86,000 55.000 320.000 20.000 Reservation Center 36,000 30,000 600.000 Receivables TOTAL SERVICE PROFITABILITY ANALYSIS Although the business plan of the hotel forecasted losses for 2007, actual results were below expectations. In order to identify sources of problems, the entrepreneurs requested a profitability analysis for the three main services offered by the hotel. Cristina Aranda, the cost analyst of one of the alled firms and the person in charge of budget and control for the Terminus Hotel, teamed up with General Manager Claudia Santander to identify some cost categories (see Table 3). TABLE 3 COMMON COSTS FOR ACCOMMODATION. RESTALRANT AND ENTERTANMENT (EUROS) Service 2007 General Management Administraive Support Housekeeping Laundry Security 56.000 15.000 66,000 325,000 100,000 Maintenance 110.000 TOTAL 700,000 Additionaly. Cristina calculated the operating profit for each of the main services offered by the Terminus Hotel (see Table 4). TABLE 4 OPERATING PRDET FOR ACCOMMOATION, RESTALRANT AND ENTERTANNENT SERVCES Accommodation Restaurant Entertainment Revenues 4,500.000 2.650.000 1350,000 Operating Expenses 4,110.000 2475.000 1.400,000 Operating Proft 390,000 175,000 (50,000) Furthermore, Cristina and Claudia gathered the following data about each of the services (see Table 5). This data excludes the support activities shown above: TABLE 5 DATA ABOUT ACCOMMODATION. RESTALRANT AND ENTERTAINMENT Accommodation Restaurant Entertainment Employees Compensation of employees Square meters Daily occupancy (average) Property, plant and equipment (Net of depreciation) 12 16 12 €500.000 200 m2 €350,000 250,000 5,000 m2 300 m2 75 rooms 40 tables 30 tables €5,200,000 €475.000 €325,000 Drawing on current practices in her firm, a pottery, Cristina allocated 100% of common costs to services using a number of employees as single cost allocation base. In order to generate alternative calculations, Cristina also prepared an allocation of all common costs using total revenues as single cost allocation basis. Claudia objected to both calculations. In her opinion, single cost allocations resulted in simplistic calculations that were unrealistic for decision-making purposes. As Claudia argued that the complexity of hotel services could only be captured by using multiple cost allocations, she prepared the following proposal (Table 6): TABLE 6 ALLOGATING COMMON COSTS BY USING MuA TIPLE COST ALLOCATON BASES Commen cost Cost allocation basis Value of property, plant and equipment Number of employees Financing, Maintenance Accounting and Taxation, Reservation Center, Advertising, Law, General Management, Admin Gardening. Housekoeping. Security Receivables, Laundry Number of square meters Revenues REQUIRED ASSIGNMENTS: 1. Using Cristina's single cost allocations, report services profitability. Explain the rationale behind each of the proposals. 2. Using Claudia's multiple cost allocation bases, report services profitability. Comment on the rationale of the proposal. 3. In view of the available information, which decisions would you make? ... =>Basically, you are required to calculate the net profitability of the 3 business areas (ie ACCOMODATION, RESTAURANT, and ENTERTAINMENT) where net profitability of every business area = operating income of the business area (given) minus allocated portion of corporate overhead (i.e. €1,300,000), using two alternative cost allocation bases (i.e. division revenues and division employees) for the corporate overhead. Therefore, to produce two tables: one table with net profitability of the 3 business areas using division revenues as cost allocation base of the corporate overhead and a second table with net profitability of the 3 business areas using division employees as cost allocation base of the corporate overhead. The Terminus Hotel, a 200-room facility located in a medieval city in Southern Spain. As consequence of poor management and old-fashioned interior design. the hotel experienced slumping demand since 2001. In 2004, the hotel was on the brink of bankruptcy. All of a sudden, these dark prospects turned into hopeful ones; the hotel was located in a historic building and the regional authorities approached Mr. Leo D. Marcial, chair of the Chamber of Commerce, to mobilize local entrepreneurs in order to take over hotel ownership. After some discussions, the entrepreneurs agreed on bidding for the hotel to make t an exclusive, high profile and properly-managed facility. The entrepreneurs regarded the acquisition of the Teminus Hotel as an opportunity to enter the hospitality industry under convenient conditions; they could get a first-rate brand at a relatively cheap price. In January 2007, the new ownership completed thorough refurbishing of the facility, which comprised new furniture and state-of-the-art interior design. The hotel resumed operations in February 2007 (see Table 1). TABLE 1 I TERMINUS HOTEL:ASSETS (NEUROS) (DECEMBLR 31.2007) 2007 2004 ASSETS Goodwill Other insangible assets Investmert property Prepeny, plant and equioment Financial assets avalatie fer sale Trade and other receivables Delerred tax assets Non-current assets 35.000 55.000 40.000 25000 10,000 2570,000 9,400 6.250,000 96,000 90,000 12,600 75,000 175.000 90,000 2.985,900 6,547,000 Inventories Financial assets avalabie for sale Trade and other receivables 104 500 22500 1.150.000 56,000 15,000 875.000 Derivative financial instruments 95,000 117,000 Cash and cash equivalents Assets heid for sale 2233,000 1,656,000 1375,000 119,000 Current assete 4,071,000 3.746.00 The new Terminus Hotel offered three main services: accommodation, a restaurant and entertainment. The restaurant served haute cuisine designed and prepared by the team of a world- class chef, whilst entertainment consisted of flamenco singing and dancing. Restaurant and entertainment services were open to non-clents. In their own firms, the entrepreneurs had spare capacity in a number of support services. In a win- win move, alled firms supplied the hotel with full service in areas such as accounting, law, financing, advertising. gardening, receivables and the reservation center. The transfer prices for these transactions were below market prices (see Table 2). TABLE 2 SERIGES PROODED Te THE TERMMIS HOTEL BY ALUED EHMS INLBOS) Service 2007 56.000 Law Firarcing Accounting and Taxation Advertieing Gardening 86,000 55.000 320.000 20.000 Reservation Center 36,000 30,000 600.000 Receivables TOTAL SERVICE PROFITABILITY ANALYSIS Although the business plan of the hotel forecasted losses for 2007, actual results were below expectations. In order to identify sources of problems, the entrepreneurs requested a profitability analysis for the three main services offered by the hotel. Cristina Aranda, the cost analyst of one of the alled firms and the person in charge of budget and control for the Terminus Hotel, teamed up with General Manager Claudia Santander to identify some cost categories (see Table 3). TABLE 3 COMMON COSTS FOR ACCOMMODATION. RESTALRANT AND ENTERTANMENT (EUROS) Service 2007 General Management Administraive Support Housekeeping Laundry Security 56.000 15.000 66,000 325,000 100,000 Maintenance 110.000 TOTAL 700,000 Additionaly. Cristina calculated the operating profit for each of the main services offered by the Terminus Hotel (see Table 4). TABLE 4 OPERATING PRDET FOR ACCOMMOATION, RESTALRANT AND ENTERTANNENT SERVCES Accommodation Restaurant Entertainment Revenues 4,500.000 2.650.000 1350,000 Operating Expenses 4,110.000 2475.000 1.400,000 Operating Proft 390,000 175,000 (50,000) Furthermore, Cristina and Claudia gathered the following data about each of the services (see Table 5). This data excludes the support activities shown above: TABLE 5 DATA ABOUT ACCOMMODATION. RESTALRANT AND ENTERTAINMENT Accommodation Restaurant Entertainment Employees Compensation of employees Square meters Daily occupancy (average) Property, plant and equipment (Net of depreciation) 12 16 12 €500.000 200 m2 €350,000 250,000 5,000 m2 300 m2 75 rooms 40 tables 30 tables €5,200,000 €475.000 €325,000 Drawing on current practices in her firm, a pottery, Cristina allocated 100% of common costs to services using a number of employees as single cost allocation base. In order to generate alternative calculations, Cristina also prepared an allocation of all common costs using total revenues as single cost allocation basis. Claudia objected to both calculations. In her opinion, single cost allocations resulted in simplistic calculations that were unrealistic for decision-making purposes. As Claudia argued that the complexity of hotel services could only be captured by using multiple cost allocations, she prepared the following proposal (Table 6): TABLE 6 ALLOGATING COMMON COSTS BY USING MuA TIPLE COST ALLOCATON BASES Commen cost Cost allocation basis Value of property, plant and equipment Number of employees Financing, Maintenance Accounting and Taxation, Reservation Center, Advertising, Law, General Management, Admin Gardening. Housekoeping. Security Receivables, Laundry Number of square meters Revenues REQUIRED ASSIGNMENTS: 1. Using Cristina's single cost allocations, report services profitability. Explain the rationale behind each of the proposals. 2. Using Claudia's multiple cost allocation bases, report services profitability. Comment on the rationale of the proposal. 3. In view of the available information, which decisions would you make? ... =>Basically, you are required to calculate the net profitability of the 3 business areas (ie ACCOMODATION, RESTAURANT, and ENTERTAINMENT) where net profitability of every business area = operating income of the business area (given) minus allocated portion of corporate overhead (i.e. €1,300,000), using two alternative cost allocation bases (i.e. division revenues and division employees) for the corporate overhead. Therefore, to produce two tables: one table with net profitability of the 3 business areas using division revenues as cost allocation base of the corporate overhead and a second table with net profitability of the 3 business areas using division employees as cost allocation base of the corporate overhead. The Terminus Hotel, a 200-room facility located in a medieval city in Southern Spain. As consequence of poor management and old-fashioned interior design. the hotel experienced slumping demand since 2001. In 2004, the hotel was on the brink of bankruptcy. All of a sudden, these dark prospects turned into hopeful ones; the hotel was located in a historic building and the regional authorities approached Mr. Leo D. Marcial, chair of the Chamber of Commerce, to mobilize local entrepreneurs in order to take over hotel ownership. After some discussions, the entrepreneurs agreed on bidding for the hotel to make t an exclusive, high profile and properly-managed facility. The entrepreneurs regarded the acquisition of the Teminus Hotel as an opportunity to enter the hospitality industry under convenient conditions; they could get a first-rate brand at a relatively cheap price. In January 2007, the new ownership completed thorough refurbishing of the facility, which comprised new furniture and state-of-the-art interior design. The hotel resumed operations in February 2007 (see Table 1). TABLE 1 I TERMINUS HOTEL:ASSETS (NEUROS) (DECEMBLR 31.2007) 2007 2004 ASSETS Goodwill Other insangible assets Investmert property Prepeny, plant and equioment Financial assets avalatie fer sale Trade and other receivables Delerred tax assets Non-current assets 35.000 55.000 40.000 25000 10,000 2570,000 9,400 6.250,000 96,000 90,000 12,600 75,000 175.000 90,000 2.985,900 6,547,000 Inventories Financial assets avalabie for sale Trade and other receivables 104 500 22500 1.150.000 56,000 15,000 875.000 Derivative financial instruments 95,000 117,000 Cash and cash equivalents Assets heid for sale 2233,000 1,656,000 1375,000 119,000 Current assete 4,071,000 3.746.00 The new Terminus Hotel offered three main services: accommodation, a restaurant and entertainment. The restaurant served haute cuisine designed and prepared by the team of a world- class chef, whilst entertainment consisted of flamenco singing and dancing. Restaurant and entertainment services were open to non-clents. In their own firms, the entrepreneurs had spare capacity in a number of support services. In a win- win move, alled firms supplied the hotel with full service in areas such as accounting, law, financing, advertising. gardening, receivables and the reservation center. The transfer prices for these transactions were below market prices (see Table 2). TABLE 2 SERIGES PROODED Te THE TERMMIS HOTEL BY ALUED EHMS INLBOS) Service 2007 56.000 Law Firarcing Accounting and Taxation Advertieing Gardening 86,000 55.000 320.000 20.000 Reservation Center 36,000 30,000 600.000 Receivables TOTAL SERVICE PROFITABILITY ANALYSIS Although the business plan of the hotel forecasted losses for 2007, actual results were below expectations. In order to identify sources of problems, the entrepreneurs requested a profitability analysis for the three main services offered by the hotel. Cristina Aranda, the cost analyst of one of the alled firms and the person in charge of budget and control for the Terminus Hotel, teamed up with General Manager Claudia Santander to identify some cost categories (see Table 3). TABLE 3 COMMON COSTS FOR ACCOMMODATION. RESTALRANT AND ENTERTANMENT (EUROS) Service 2007 General Management Administraive Support Housekeeping Laundry Security 56.000 15.000 66,000 325,000 100,000 Maintenance 110.000 TOTAL 700,000 Additionaly. Cristina calculated the operating profit for each of the main services offered by the Terminus Hotel (see Table 4). TABLE 4 OPERATING PRDET FOR ACCOMMOATION, RESTALRANT AND ENTERTANNENT SERVCES Accommodation Restaurant Entertainment Revenues 4,500.000 2.650.000 1350,000 Operating Expenses 4,110.000 2475.000 1.400,000 Operating Proft 390,000 175,000 (50,000) Furthermore, Cristina and Claudia gathered the following data about each of the services (see Table 5). This data excludes the support activities shown above: TABLE 5 DATA ABOUT ACCOMMODATION. RESTALRANT AND ENTERTAINMENT Accommodation Restaurant Entertainment Employees Compensation of employees Square meters Daily occupancy (average) Property, plant and equipment (Net of depreciation) 12 16 12 €500.000 200 m2 €350,000 250,000 5,000 m2 300 m2 75 rooms 40 tables 30 tables €5,200,000 €475.000 €325,000 Drawing on current practices in her firm, a pottery, Cristina allocated 100% of common costs to services using a number of employees as single cost allocation base. In order to generate alternative calculations, Cristina also prepared an allocation of all common costs using total revenues as single cost allocation basis. Claudia objected to both calculations. In her opinion, single cost allocations resulted in simplistic calculations that were unrealistic for decision-making purposes. As Claudia argued that the complexity of hotel services could only be captured by using multiple cost allocations, she prepared the following proposal (Table 6): TABLE 6 ALLOGATING COMMON COSTS BY USING MuA TIPLE COST ALLOCATON BASES Commen cost Cost allocation basis Value of property, plant and equipment Number of employees Financing, Maintenance Accounting and Taxation, Reservation Center, Advertising, Law, General Management, Admin Gardening. Housekoeping. Security Receivables, Laundry Number of square meters Revenues REQUIRED ASSIGNMENTS: 1. Using Cristina's single cost allocations, report services profitability. Explain the rationale behind each of the proposals. 2. Using Claudia's multiple cost allocation bases, report services profitability. Comment on the rationale of the proposal. 3. In view of the available information, which decisions would you make? ... =>Basically, you are required to calculate the net profitability of the 3 business areas (ie ACCOMODATION, RESTAURANT, and ENTERTAINMENT) where net profitability of every business area = operating income of the business area (given) minus allocated portion of corporate overhead (i.e. €1,300,000), using two alternative cost allocation bases (i.e. division revenues and division employees) for the corporate overhead. Therefore, to produce two tables: one table with net profitability of the 3 business areas using division revenues as cost allocation base of the corporate overhead and a second table with net profitability of the 3 business areas using division employees as cost allocation base of the corporate overhead. The Terminus Hotel, a 200-room facility located in a medieval city in Southern Spain. As consequence of poor management and old-fashioned interior design. the hotel experienced slumping demand since 2001. In 2004, the hotel was on the brink of bankruptcy. All of a sudden, these dark prospects turned into hopeful ones; the hotel was located in a historic building and the regional authorities approached Mr. Leo D. Marcial, chair of the Chamber of Commerce, to mobilize local entrepreneurs in order to take over hotel ownership. After some discussions, the entrepreneurs agreed on bidding for the hotel to make t an exclusive, high profile and properly-managed facility. The entrepreneurs regarded the acquisition of the Teminus Hotel as an opportunity to enter the hospitality industry under convenient conditions; they could get a first-rate brand at a relatively cheap price. In January 2007, the new ownership completed thorough refurbishing of the facility, which comprised new furniture and state-of-the-art interior design. The hotel resumed operations in February 2007 (see Table 1). TABLE 1 I TERMINUS HOTEL:ASSETS (NEUROS) (DECEMBLR 31.2007) 2007 2004 ASSETS Goodwill Other insangible assets Investmert property Prepeny, plant and equioment Financial assets avalatie fer sale Trade and other receivables Delerred tax assets Non-current assets 35.000 55.000 40.000 25000 10,000 2570,000 9,400 6.250,000 96,000 90,000 12,600 75,000 175.000 90,000 2.985,900 6,547,000 Inventories Financial assets avalabie for sale Trade and other receivables 104 500 22500 1.150.000 56,000 15,000 875.000 Derivative financial instruments 95,000 117,000 Cash and cash equivalents Assets heid for sale 2233,000 1,656,000 1375,000 119,000 Current assete 4,071,000 3.746.00 The new Terminus Hotel offered three main services: accommodation, a restaurant and entertainment. The restaurant served haute cuisine designed and prepared by the team of a world- class chef, whilst entertainment consisted of flamenco singing and dancing. Restaurant and entertainment services were open to non-clents. In their own firms, the entrepreneurs had spare capacity in a number of support services. In a win- win move, alled firms supplied the hotel with full service in areas such as accounting, law, financing, advertising. gardening, receivables and the reservation center. The transfer prices for these transactions were below market prices (see Table 2). TABLE 2 SERIGES PROODED Te THE TERMMIS HOTEL BY ALUED EHMS INLBOS) Service 2007 56.000 Law Firarcing Accounting and Taxation Advertieing Gardening 86,000 55.000 320.000 20.000 Reservation Center 36,000 30,000 600.000 Receivables TOTAL SERVICE PROFITABILITY ANALYSIS Although the business plan of the hotel forecasted losses for 2007, actual results were below expectations. In order to identify sources of problems, the entrepreneurs requested a profitability analysis for the three main services offered by the hotel. Cristina Aranda, the cost analyst of one of the alled firms and the person in charge of budget and control for the Terminus Hotel, teamed up with General Manager Claudia Santander to identify some cost categories (see Table 3). TABLE 3 COMMON COSTS FOR ACCOMMODATION. RESTALRANT AND ENTERTANMENT (EUROS) Service 2007 General Management Administraive Support Housekeeping Laundry Security 56.000 15.000 66,000 325,000 100,000 Maintenance 110.000 TOTAL 700,000 Additionaly. Cristina calculated the operating profit for each of the main services offered by the Terminus Hotel (see Table 4). TABLE 4 OPERATING PRDET FOR ACCOMMOATION, RESTALRANT AND ENTERTANNENT SERVCES Accommodation Restaurant Entertainment Revenues 4,500.000 2.650.000 1350,000 Operating Expenses 4,110.000 2475.000 1.400,000 Operating Proft 390,000 175,000 (50,000) Furthermore, Cristina and Claudia gathered the following data about each of the services (see Table 5). This data excludes the support activities shown above: TABLE 5 DATA ABOUT ACCOMMODATION. RESTALRANT AND ENTERTAINMENT Accommodation Restaurant Entertainment Employees Compensation of employees Square meters Daily occupancy (average) Property, plant and equipment (Net of depreciation) 12 16 12 €500.000 200 m2 €350,000 250,000 5,000 m2 300 m2 75 rooms 40 tables 30 tables €5,200,000 €475.000 €325,000 Drawing on current practices in her firm, a pottery, Cristina allocated 100% of common costs to services using a number of employees as single cost allocation base. In order to generate alternative calculations, Cristina also prepared an allocation of all common costs using total revenues as single cost allocation basis. Claudia objected to both calculations. In her opinion, single cost allocations resulted in simplistic calculations that were unrealistic for decision-making purposes. As Claudia argued that the complexity of hotel services could only be captured by using multiple cost allocations, she prepared the following proposal (Table 6): TABLE 6 ALLOGATING COMMON COSTS BY USING MuA TIPLE COST ALLOCATON BASES Commen cost Cost allocation basis Value of property, plant and equipment Number of employees Financing, Maintenance Accounting and Taxation, Reservation Center, Advertising, Law, General Management, Admin Gardening. Housekoeping. Security Receivables, Laundry Number of square meters Revenues REQUIRED ASSIGNMENTS: 1. Using Cristina's single cost allocations, report services profitability. Explain the rationale behind each of the proposals. 2. Using Claudia's multiple cost allocation bases, report services profitability. Comment on the rationale of the proposal. 3. In view of the available information, which decisions would you make? ... =>Basically, you are required to calculate the net profitability of the 3 business areas (ie ACCOMODATION, RESTAURANT, and ENTERTAINMENT) where net profitability of every business area = operating income of the business area (given) minus allocated portion of corporate overhead (i.e. €1,300,000), using two alternative cost allocation bases (i.e. division revenues and division employees) for the corporate overhead. Therefore, to produce two tables: one table with net profitability of the 3 business areas using division revenues as cost allocation base of the corporate overhead and a second table with net profitability of the 3 business areas using division employees as cost allocation base of the corporate overhead. The Terminus Hotel, a 200-room facility located in a medieval city in Southern Spain. As consequence of poor management and old-fashioned interior design. the hotel experienced slumping demand since 2001. In 2004, the hotel was on the brink of bankruptcy. All of a sudden, these dark prospects turned into hopeful ones; the hotel was located in a historic building and the regional authorities approached Mr. Leo D. Marcial, chair of the Chamber of Commerce, to mobilize local entrepreneurs in order to take over hotel ownership. After some discussions, the entrepreneurs agreed on bidding for the hotel to make t an exclusive, high profile and properly-managed facility. The entrepreneurs regarded the acquisition of the Teminus Hotel as an opportunity to enter the hospitality industry under convenient conditions; they could get a first-rate brand at a relatively cheap price. In January 2007, the new ownership completed thorough refurbishing of the facility, which comprised new furniture and state-of-the-art interior design. The hotel resumed operations in February 2007 (see Table 1). TABLE 1 I TERMINUS HOTEL:ASSETS (NEUROS) (DECEMBLR 31.2007) 2007 2004 ASSETS Goodwill Other insangible assets Investmert property Prepeny, plant and equioment Financial assets avalatie fer sale Trade and other receivables Delerred tax assets Non-current assets 35.000 55.000 40.000 25000 10,000 2570,000 9,400 6.250,000 96,000 90,000 12,600 75,000 175.000 90,000 2.985,900 6,547,000 Inventories Financial assets avalabie for sale Trade and other receivables 104 500 22500 1.150.000 56,000 15,000 875.000 Derivative financial instruments 95,000 117,000 Cash and cash equivalents Assets heid for sale 2233,000 1,656,000 1375,000 119,000 Current assete 4,071,000 3.746.00 The new Terminus Hotel offered three main services: accommodation, a restaurant and entertainment. The restaurant served haute cuisine designed and prepared by the team of a world- class chef, whilst entertainment consisted of flamenco singing and dancing. Restaurant and entertainment services were open to non-clents. In their own firms, the entrepreneurs had spare capacity in a number of support services. In a win- win move, alled firms supplied the hotel with full service in areas such as accounting, law, financing, advertising. gardening, receivables and the reservation center. The transfer prices for these transactions were below market prices (see Table 2). TABLE 2 SERIGES PROODED Te THE TERMMIS HOTEL BY ALUED EHMS INLBOS) Service 2007 56.000 Law Firarcing Accounting and Taxation Advertieing Gardening 86,000 55.000 320.000 20.000 Reservation Center 36,000 30,000 600.000 Receivables TOTAL SERVICE PROFITABILITY ANALYSIS Although the business plan of the hotel forecasted losses for 2007, actual results were below expectations. In order to identify sources of problems, the entrepreneurs requested a profitability analysis for the three main services offered by the hotel. Cristina Aranda, the cost analyst of one of the alled firms and the person in charge of budget and control for the Terminus Hotel, teamed up with General Manager Claudia Santander to identify some cost categories (see Table 3). TABLE 3 COMMON COSTS FOR ACCOMMODATION. RESTALRANT AND ENTERTANMENT (EUROS) Service 2007 General Management Administraive Support Housekeeping Laundry Security 56.000 15.000 66,000 325,000 100,000 Maintenance 110.000 TOTAL 700,000 Additionaly. Cristina calculated the operating profit for each of the main services offered by the Terminus Hotel (see Table 4). TABLE 4 OPERATING PRDET FOR ACCOMMOATION, RESTALRANT AND ENTERTANNENT SERVCES Accommodation Restaurant Entertainment Revenues 4,500.000 2.650.000 1350,000 Operating Expenses 4,110.000 2475.000 1.400,000 Operating Proft 390,000 175,000 (50,000) Furthermore, Cristina and Claudia gathered the following data about each of the services (see Table 5). This data excludes the support activities shown above: TABLE 5 DATA ABOUT ACCOMMODATION. RESTALRANT AND ENTERTAINMENT Accommodation Restaurant Entertainment Employees Compensation of employees Square meters Daily occupancy (average) Property, plant and equipment (Net of depreciation) 12 16 12 €500.000 200 m2 €350,000 250,000 5,000 m2 300 m2 75 rooms 40 tables 30 tables €5,200,000 €475.000 €325,000 Drawing on current practices in her firm, a pottery, Cristina allocated 100% of common costs to services using a number of employees as single cost allocation base. In order to generate alternative calculations, Cristina also prepared an allocation of all common costs using total revenues as single cost allocation basis. Claudia objected to both calculations. In her opinion, single cost allocations resulted in simplistic calculations that were unrealistic for decision-making purposes. As Claudia argued that the complexity of hotel services could only be captured by using multiple cost allocations, she prepared the following proposal (Table 6): TABLE 6 ALLOGATING COMMON COSTS BY USING MuA TIPLE COST ALLOCATON BASES Commen cost Cost allocation basis Value of property, plant and equipment Number of employees Financing, Maintenance Accounting and Taxation, Reservation Center, Advertising, Law, General Management, Admin Gardening. Housekoeping. Security Receivables, Laundry Number of square meters Revenues REQUIRED ASSIGNMENTS: 1. Using Cristina's single cost allocations, report services profitability. Explain the rationale behind each of the proposals. 2. Using Claudia's multiple cost allocation bases, report services profitability. Comment on the rationale of the proposal. 3. In view of the available information, which decisions would you make? ... =>Basically, you are required to calculate the net profitability of the 3 business areas (ie ACCOMODATION, RESTAURANT, and ENTERTAINMENT) where net profitability of every business area = operating income of the business area (given) minus allocated portion of corporate overhead (i.e. €1,300,000), using two alternative cost allocation bases (i.e. division revenues and division employees) for the corporate overhead. Therefore, to produce two tables: one table with net profitability of the 3 business areas using division revenues as cost allocation base of the corporate overhead and a second table with net profitability of the 3 business areas using division employees as cost allocation base of the corporate overhead. The Terminus Hotel, a 200-room facility located in a medieval city in Southern Spain. As consequence of poor management and old-fashioned interior design. the hotel experienced slumping demand since 2001. In 2004, the hotel was on the brink of bankruptcy. All of a sudden, these dark prospects turned into hopeful ones; the hotel was located in a historic building and the regional authorities approached Mr. Leo D. Marcial, chair of the Chamber of Commerce, to mobilize local entrepreneurs in order to take over hotel ownership. After some discussions, the entrepreneurs agreed on bidding for the hotel to make t an exclusive, high profile and properly-managed facility. The entrepreneurs regarded the acquisition of the Teminus Hotel as an opportunity to enter the hospitality industry under convenient conditions; they could get a first-rate brand at a relatively cheap price. In January 2007, the new ownership completed thorough refurbishing of the facility, which comprised new furniture and state-of-the-art interior design. The hotel resumed operations in February 2007 (see Table 1). TABLE 1 I TERMINUS HOTEL:ASSETS (NEUROS) (DECEMBLR 31.2007) 2007 2004 ASSETS Goodwill Other insangible assets Investmert property Prepeny, plant and equioment Financial assets avalatie fer sale Trade and other receivables Delerred tax assets Non-current assets 35.000 55.000 40.000 25000 10,000 2570,000 9,400 6.250,000 96,000 90,000 12,600 75,000 175.000 90,000 2.985,900 6,547,000 Inventories Financial assets avalabie for sale Trade and other receivables 104 500 22500 1.150.000 56,000 15,000 875.000 Derivative financial instruments 95,000 117,000 Cash and cash equivalents Assets heid for sale 2233,000 1,656,000 1375,000 119,000 Current assete 4,071,000 3.746.00 The new Terminus Hotel offered three main services: accommodation, a restaurant and entertainment. The restaurant served haute cuisine designed and prepared by the team of a world- class chef, whilst entertainment consisted of flamenco singing and dancing. Restaurant and entertainment services were open to non-clents. In their own firms, the entrepreneurs had spare capacity in a number of support services. In a win- win move, alled firms supplied the hotel with full service in areas such as accounting, law, financing, advertising. gardening, receivables and the reservation center. The transfer prices for these transactions were below market prices (see Table 2). TABLE 2 SERIGES PROODED Te THE TERMMIS HOTEL BY ALUED EHMS INLBOS) Service 2007 56.000 Law Firarcing Accounting and Taxation Advertieing Gardening 86,000 55.000 320.000 20.000 Reservation Center 36,000 30,000 600.000 Receivables TOTAL SERVICE PROFITABILITY ANALYSIS Although the business plan of the hotel forecasted losses for 2007, actual results were below expectations. In order to identify sources of problems, the entrepreneurs requested a profitability analysis for the three main services offered by the hotel. Cristina Aranda, the cost analyst of one of the alled firms and the person in charge of budget and control for the Terminus Hotel, teamed up with General Manager Claudia Santander to identify some cost categories (see Table 3). TABLE 3 COMMON COSTS FOR ACCOMMODATION. RESTALRANT AND ENTERTANMENT (EUROS) Service 2007 General Management Administraive Support Housekeeping Laundry Security 56.000 15.000 66,000 325,000 100,000 Maintenance 110.000 TOTAL 700,000 Additionaly. Cristina calculated the operating profit for each of the main services offered by the Terminus Hotel (see Table 4). TABLE 4 OPERATING PRDET FOR ACCOMMOATION, RESTALRANT AND ENTERTANNENT SERVCES Accommodation Restaurant Entertainment Revenues 4,500.000 2.650.000 1350,000 Operating Expenses 4,110.000 2475.000 1.400,000 Operating Proft 390,000 175,000 (50,000) Furthermore, Cristina and Claudia gathered the following data about each of the services (see Table 5). This data excludes the support activities shown above: TABLE 5 DATA ABOUT ACCOMMODATION. RESTALRANT AND ENTERTAINMENT Accommodation Restaurant Entertainment Employees Compensation of employees Square meters Daily occupancy (average) Property, plant and equipment (Net of depreciation) 12 16 12 €500.000 200 m2 €350,000 250,000 5,000 m2 300 m2 75 rooms 40 tables 30 tables €5,200,000 €475.000 €325,000 Drawing on current practices in her firm, a pottery, Cristina allocated 100% of common costs to services using a number of employees as single cost allocation base. In order to generate alternative calculations, Cristina also prepared an allocation of all common costs using total revenues as single cost allocation basis. Claudia objected to both calculations. In her opinion, single cost allocations resulted in simplistic calculations that were unrealistic for decision-making purposes. As Claudia argued that the complexity of hotel services could only be captured by using multiple cost allocations, she prepared the following proposal (Table 6): TABLE 6 ALLOGATING COMMON COSTS BY USING MuA TIPLE COST ALLOCATON BASES Commen cost Cost allocation basis Value of property, plant and equipment Number of employees Financing, Maintenance Accounting and Taxation, Reservation Center, Advertising, Law, General Management, Admin Gardening. Housekoeping. Security Receivables, Laundry Number of square meters Revenues REQUIRED ASSIGNMENTS: 1. Using Cristina's single cost allocations, report services profitability. Explain the rationale behind each of the proposals. 2. Using Claudia's multiple cost allocation bases, report services profitability. Comment on the rationale of the proposal. 3. In view of the available information, which decisions would you make? ... =>Basically, you are required to calculate the net profitability of the 3 business areas (ie ACCOMODATION, RESTAURANT, and ENTERTAINMENT) where net profitability of every business area = operating income of the business area (given) minus allocated portion of corporate overhead (i.e. €1,300,000), using two alternative cost allocation bases (i.e. division revenues and division employees) for the corporate overhead. Therefore, to produce two tables: one table with net profitability of the 3 business areas using division revenues as cost allocation base of the corporate overhead and a second table with net profitability of the 3 business areas using division employees as cost allocation base of the corporate overhead.
Expert Answer:
Answer rating: 100% (QA)
PAGE NO DATE Calculation Tatal Commen Cost 55000 rencrial Mamagemant AdministrativeSupport House... View the full answer
Related Book For
Business Law Text and Cases
ISBN: 978-0324655223
11th Edition
Authors: Kenneth W. Clarkson, Roger LeRoy Miller, Gaylord A. Jentz, F
Posted Date:
Students also viewed these economics questions
-
Poor inventory management at the local warehouse for Furniture City has led to overstocking of many items and frequent shortages of some others. To begin to rectify this situation, the 20 most...
-
Some people consider entry-level positions in the hotel hospitality industry to be dead-end jobs. What is the difference between a dead-end job and an entry-level position in well-managed hotel? How...
-
Under what conditions could you see yourself entering into a job-sharing arrangement with a co-worker? Please describe.
-
Do the following problems mentally using the distributive property. a. 5 99 b. 4 88 c. 8 52
-
A demand curve is drawn holding other things constant. What does the other things constant provision mean, and why is it important to a correct interpretation of the law of demand?
-
Debt to Equity = total debt / total equity Year 2 = 316,632/146,043 Year 1 = 282,304/138,245 = 2.17 = 2.04 1. What does this ratio tell you? 2. In general, would you like this ratio to be higher or...
-
How can management control against unauthorized or duplicate cash payments?
-
To help familiarize you with the financial reporting of a real company in order to further your understanding of the chapter material you are learning. This case focuses on the financial statement...
-
On August 1, 2023, Estrada Inc buys 20 motorcycles at a CHP auction for $10,000 each. Estrada capitalizes the the motorcycles in the "Vehicle" account on their balance sheet. They expect to use the...
-
Two investment projects which are mutually exclusive both require a $10,000,000 investment. Projected cash flows are provided in a table below. Given discount rate of 12 percent, calculate the net...
-
Organizing not-for-profit project benefits and cost data. (Belli et al., 2001, Mauritius) You may organize project benefit and cost data in various ways depending on the distribution of benefits and...
-
List four new applications of the temptation stable analysis pattern.
-
List some of the domains in which the temptation analysis pattern can be applied.
-
Identify the existing anomalies (if any) and find the reason for their being anomalous?
-
Is the temptation pattern incomplete without the use of other patterns? Explain briefly.
-
Document the CRC card for the temptation EBT.
-
Calculate the number of degrees of unsaturation for each molecular formula, and propose two possible structures: (a) C8H12; (b) C10H10 More Practice: Try Problems 10.34a,b; 10.35
-
Teasdale Inc. manufactures and sells commercial and residential security equipment. The comparative unclassified balance sheets for December 31, 2015 and 2014 are provided below. Selected missing...
-
Assume that the court does find that the contract falls within the Statute of Frauds and that the state in which the court sits recognizes every exception to the Statute of Frauds discussed in the...
-
What If the Facts Were Different? Suppose that the Sanderses had done nothing involving the disputed land except to claim title. Would the result have been different? Explain.
-
Thomas Stafford owned four promissory notes. Payments on the notes were deposited into a bank account in the names of Stafford and his daughter, June Zink, jointly with a note on the account...
-
What do you really enjoy doing? What is your passion? Can your passion be a platform for a viable opportunity?
-
What do your friends and family envision you doing? What strengths and weaknesses do they observe? How do their insights help lead you to an opportunity that is right for you?
-
Put several of your ideas through the opportunity checklist in Figure 3.10. Which ideas seem to have the highest potential? Customer Identifiable Demographics Psychographics Trends Macromarket Target...
Study smarter with the SolutionInn App